Belarus follows in Mavrodi’s footsteps

• 21.09.2010, 13:34

The Belarusian authorities are building a financial pyramid for people of Belarus.

Pyotr Prakapovich, the chairman of the board of the National Bank of Belarus, reported Lukashenka on September 20 on success in monetary policy for 8 months. As it turned out, the monetyary policy has never been so good in the country – the ruble is adamant, foreign currency earning of Belarusian enterprises has increased by 20%, gold and foreign exchange reserves have mushroomed up to $6 billion, the refinancing rate has been reduced six times in 2010.

Reporting about such achievements is pleasant in the run-up to the elections, but the rest things need to be hushed up. The export proceeds growth, which is compared with the catastrophic fall of 2009, still fails to cover imports rapid rise in, which resulted in critical skewness of balance of trade. Belarus’s trade with foreign countries was so “successful” in 2010 that the republic has accumulated a debt of $4 billion for only 9 months. It’s like you go to work, did your job, produce something, but ran into debt. How long can a normal person work in these conditions?

Let’s follow the example. Having failed to earn money, one needs to earn it from someone to be able to live for these 9 months. One can borrow or sell something. Pyotr Prakapovich invented nothing news in this situation – he just borrowed money. The country was eating the rests of IMF credits in the beginning of the year, and Eurobonds of 1 billion allowed eating and drinking for two summer months. Now its turn for ruble-denominated bonds of Belarus of 15 billion Russian rubles that will be issued by Russian Sberbank. Belarus’s gross pubic debt has increased by $1.1 billion reaching $23,171 million, which is 45.5% of the gross domestic products (the latest loans are not taken into account).

But what is the most terrifying is that the authorities are building a financial pyramid for the people of Belarus. Inspired by phenomenal deposit interest rates, naïve Belarusians gave banks 21.8 trillion Belarusian rubles, which exceeds gold and foreign currency reserves by $1.2. It is a deposit bubble, not IMF credits that allow maintaining the fragile stability. How long will this go on?