Russian export duties on oil shocked the Belarusian economy, which has to be significantly reformed. It was said by the Permanent Representative of the International Monetary Fund in Belarus Natalia Kolyadina. According to her, this shock was estimated at two billion dollars this year, while the deficit of current account last year was 13% of GDP.
«Rising oil prices resulted in a substantial profitability decrease for oil refiners. In this regard, the export of petroleum products has fallen significantly. The authorities, however, have taken measures, including in fiscal area, in order to reduce the effect of the shock on the economy of Belarus», Natalia Kolyadina says, RIA Novosti informs.
Russia imposed a duty on the part of the imported oil that Belarus had been processing and selling in Europe. The subsidy on the supply of 6.3 million tons for domestic Belarusian use still remains, the IMF says. As a result, Belarus decreased oil imports from Russia in the first half year by 49,8% in annual terms, the export of petroleum products declined by 40%, and the output oil-refining industry of Belarus has fallen by 30%, the expert says.
In addition, Natalia Kolyadina believes that diversification of the Belarusian economy is necessary, but Russia and the EU remain major trading partners of Belarus. «While petroleum products were mainly exported in Europe. With regard to subsidies, the rejection of them is inevitable. The Belarusian economy should become less dependent, and Russia will decide to completely eliminate the subsidies», IMF Permanent Representative in Belarus considers.
«Adaptation of the Belarusian economy to work without Russian subsidies is just the question of time. Minsk, probably will be forced to take unpopular measures, such as reducing subsidies to utilities that have already been promised to the IMF», Natalia Kolyadina says.
Belarusian economic model becomes noncompetitive even in the post-Soviet countries, IMF
In addition, Natalia Kolyadina noted that the current Belarusian economic model, governed by annual and five-year plans of the authorities, becomes noncompetitive even in the post-Soviet countries. Belarusian enterprises, regardless of ownership, receive the targets on output, employment, wages, GDP growth, economy financing and a lot of other indicators, the expert says.
«While the enterprises in the market economy should maximize profits, the Belarusian enterprises have to ensure fulfillment of obligatory quantitative indicators. This task is often incompatible with the goal of maximizing profits», Natalia Kolyadina says.
Also, according to IMF Representative, Belarusian economy receives less investments than the developing economies of countries in the region. «This is obviously due to several factors, including, significant state intervention in the economy and not predictable business climate», IMF Permanent Representative in Belarus considers.
According to the IMF, in the beginning of this decade, productivity growth was large enough, outpacing the growth of wages. However, the situation changed in the second half and wages grew faster than productivity, undermining the competitiveness of the enterprises in foreign markets, Natalia Kolyadina says.
«The recent wage growth outpaced productivity. 2007 must have been the turning point, when the Belarusian economy had to adjust to the increase in export tariffs for energy and oil, but state intervention remained very high. Now the pace of growth are implemented through the targets establishment. The question arises, how effective such economy is», the IMF expert emphasized.
