S.Bahdankevіch: Russian credits virtualize our gold reserves
Russia has increased the price for gas for Belarusians again. Belarus immediately reminded about a $2 billion credit that had been promised before. What was the 1.5 billion received before used for and why do we need more? The dean of the economic faculty of BSU Mihail Kavalyou says that credits should be accepted if they are offered. And it does not really matter what they will be used for.
Let me remind you that Belarus received its biggest credit last December. Now we are asking for more – 2 billion dollars. It is a big sum for Belarus. Our country’s foreign debt is about 2.5 billion dollars now. The new credit would double the debt. Doesn’t it lead to additional dependence on Russia for us?
A former head of the National Bank Stanislau Bahdankevich compares the Russian credit to free cheese in a mouse-trap:
“There is a political issue about it all… there is the problem of takeover of Belarus by Russia, so we should be more careful about this free cheese Russia put in a mouse-trap”.
If we do not take politics into account, such a long-term credit is advantageous for Belarus.
Stanіslau Bahdankevіch: “...such credits are advantageous for the Belarusian economy. So I would not mind the Belarusian government to carry out systematic market reforms, to use the money for technical and technological reequipment and introduction of nanotechnologies… If there were such a national programme”.
However, there is nothing of the kind, adds the former head of the main bank of the country.
The dean of the economic faculty of BSU Mihail Kavalyou is sure that Belarus will be able to pay the credit back to Russia. Thanks God, there is a cushion: the maximum limit of the foreign debt in 2008 mentioned in the budget is 4 billion dollars:
“It is not dangerous at all - the Belarusian foreign debt is one of the smallest in the world if we take the gross product into account… I think we should not decide whether we need money or not if it is offered to us. We should use it if it is available”.
The former head of the National Bank thinks differently about it. Stanisalu Bahdankevich says we can become insolvent if we keep getting credits at such a rate. The quota of all credits has already gone over 50% as regards the gross product. It is a very bad indicator:
“...We may become insolvent in some time and they will not be eager to give us credits anymore”.
Interestingly, the Belarusian gold reserves continue growing in spite of all the debts. The gold and exchange currency reserves of Belarus have increased by almost 500 million dollars and totaled $5.5 billion in the first quarter of the year. The reserves increased thanks to the credit. Stanislau Bahdankevich says that the accumulation is artificial and the gold reserves are virtual:
“It is an artificial accumulation with the help of credits that are received. Credits will have to be called in so, if we called in all the debts we have now, our gold reserves would be nullified. Well, there would be a small sum left. In fact, all the reserves are virtual because they have not been accumulated thanks to the prevalence of export over import, and not because property was sold, but thanks to the credits we received.
If we get a credit in dollars and do not spend it immediately, it may be considered as our reserve for some time. However, the same amount of roubles is spent for the economy”.
That is why it will be necessary to exchange roubles for dollars or euro again to call in the debt. But there may be no roubles.
What would an average Belarusian get thanks to the 2 billion Russian credit? If our authorities decided to share the money among all citizens, everyone would get 200 dollars. Accordingly, everyone would get 400 dollars if the credit was shared among all the people capable of working. This is more than the average earnings in Belarus. So people would be able to give up working for a month. However, we are more likely to have to work harder after the credit is received.
Let me remind you that Belarus received its biggest credit last December. Now we are asking for more – 2 billion dollars. It is a big sum for Belarus. Our country’s foreign debt is about 2.5 billion dollars now. The new credit would double the debt. Doesn’t it lead to additional dependence on Russia for us?
A former head of the National Bank Stanislau Bahdankevich compares the Russian credit to free cheese in a mouse-trap:
“There is a political issue about it all… there is the problem of takeover of Belarus by Russia, so we should be more careful about this free cheese Russia put in a mouse-trap”.
If we do not take politics into account, such a long-term credit is advantageous for Belarus.
Stanіslau Bahdankevіch: “...such credits are advantageous for the Belarusian economy. So I would not mind the Belarusian government to carry out systematic market reforms, to use the money for technical and technological reequipment and introduction of nanotechnologies… If there were such a national programme”.
However, there is nothing of the kind, adds the former head of the main bank of the country.
The dean of the economic faculty of BSU Mihail Kavalyou is sure that Belarus will be able to pay the credit back to Russia. Thanks God, there is a cushion: the maximum limit of the foreign debt in 2008 mentioned in the budget is 4 billion dollars:
“It is not dangerous at all - the Belarusian foreign debt is one of the smallest in the world if we take the gross product into account… I think we should not decide whether we need money or not if it is offered to us. We should use it if it is available”.
The former head of the National Bank thinks differently about it. Stanisalu Bahdankevich says we can become insolvent if we keep getting credits at such a rate. The quota of all credits has already gone over 50% as regards the gross product. It is a very bad indicator:
“...We may become insolvent in some time and they will not be eager to give us credits anymore”.
Interestingly, the Belarusian gold reserves continue growing in spite of all the debts. The gold and exchange currency reserves of Belarus have increased by almost 500 million dollars and totaled $5.5 billion in the first quarter of the year. The reserves increased thanks to the credit. Stanislau Bahdankevich says that the accumulation is artificial and the gold reserves are virtual:
“It is an artificial accumulation with the help of credits that are received. Credits will have to be called in so, if we called in all the debts we have now, our gold reserves would be nullified. Well, there would be a small sum left. In fact, all the reserves are virtual because they have not been accumulated thanks to the prevalence of export over import, and not because property was sold, but thanks to the credits we received.
If we get a credit in dollars and do not spend it immediately, it may be considered as our reserve for some time. However, the same amount of roubles is spent for the economy”.
That is why it will be necessary to exchange roubles for dollars or euro again to call in the debt. But there may be no roubles.
What would an average Belarusian get thanks to the 2 billion Russian credit? If our authorities decided to share the money among all citizens, everyone would get 200 dollars. Accordingly, everyone would get 400 dollars if the credit was shared among all the people capable of working. This is more than the average earnings in Belarus. So people would be able to give up working for a month. However, we are more likely to have to work harder after the credit is received.
