IMF’s conditions dangerous for Lukashenka’s authoritarian regime
- 31.08.2009, 10:15
Independent experts say the Belarusian authorities won’t fulfil recommendations of the International Monetary Fund regarding the economy liberalization.
The International Monetary Fund demands that state intervention in the economy should be significantly reduced. Radio Svaboda reminds that this condition was made in a concluding statement of the IMF mission giving consultations in Minsk in late February.
The fund also think wages need to be liberalized and mandatory quantitative targets at the macroeconomic and enterprise levels need to be abolished.
Economist Leanid Zlotnikau says the Belarusian authorities are not ready to fulfil the IMF’s requirements.
“The Belarusian economy is in the situation when the IMF recommendations will only help it,” Leanid Zlotnikau tells. “I have said many times that main things now are free pricing and that market, not the government, should say how much goods and on what prices should be produced.”
According to the expert, the authorities won’t liberalize economy.
“In my view, the authorities won’t liberalize economy, won’t cancel the orders what and how much goods should be produced. This threatens the authoritarian political system and command-style economy that we have today,” the economist says. “Free pricing is the main thing that distinguishes market economy from command one.
The authorities pretended to be carrying out liberalization. But it touched only small things, there wasn’t real liberalization. I think we won’t see real liberalization because it is dangerous for the authorities.
The IMF demands that Belarus should start liberalization at the beginning next year. Notice that the agreement on a loan expires at the beginning of the year, too. That’s why I think the authorities continue to pretend that are going to fulfil the IMF recommendations, will adopt a law on privatization, will prepare some enterprises for privatization. But in real fact we won’t see liberalization an privatization.”
We remind that the IMF emphasized: “Price controls need to be reduced to the minimum so that the price signal can direct the flow of resources and help adjust excesses and shortages in the economy, and most retail trade margins should be abolished in line with the government’s agreement with the World Bank.”
Secondly, the IMF says: “Wages need to be liberalized to reward high productivity, and the labour market developed so that workers can move to jobs where they are most productive.”
Thirdly, the IMF Mission thinks the banking system should abolish the directed lending system. “The banking system shall be allowed to make lending decisions based on the profitability and risks of the projects rather than government directions or recommendations,” the IMF statement says.