Aleksandr Lukashenko meets with heads of largest Belarusian media outlets

President of the Republic of Belarus Aleksandr Lukashenko met with heads of the largest Belarusian mass media outlets. Partaking in the meeting were directors of the Belarusian TV and Radio Company, the Second National TV Channel, STV channel, the Interstate TV and Radio Company Mir, editors-in-chief of the newspapers Sovetskaya Belorussiya, Arguments and Facts in Belarus, Zvyazda, Pressball, heads of the news agencies BelTA and BelaPAN, the owner of the popular Internet portal TUT.BY.

Addressing the participants of the meeting Aleksandr Lukashenko said:

“I am ready for a conversation. We are not going to determine its format. Let us have a dialogue today.”

Each representative of a public or private mass media outlet had a chance to communicate their point of view on the most important issues.

At the beginning of the event the President explained why heads of certain mass media outlets were invited for the meeting. In his words, the main criterion was the impact and the credibility of a media outlet in the society:

“When we were preparing for the meeting I said that we need to look at how people react to a media outlet. We used many criteria and we saw that these were the leading mass media of Belarus, may someone like it or not, but this is true.”

The meeting which took place in the Palace of Independence lasted for five hours. The event focused on a wide range of issues. Apart from strategic issues, namely economic development prospects, cooperation with other states, youth policy, the participants of the meeting discussed such matters as housing and utility rates, the state tax for letting vehicles use public roads, the growth of wages and pension benefits.

The President gave answers to 30 questions. The questions pertained to all aspects of life of the Belarusian society.

Estimates and Prospects

Chairman of the Belarusian TV and Radio Company Gennady Davydko asked the President about the results of the year 2013 and the prospects for 2014. The President said:

Back at the end of the previous five-year term I made a decision to switch to international statistics standards. We do not have any manipulations with statistics. Moreover, the National Statistics Committee is no longer subordinate to the Government. We did this to make sure the committee would not come under excessive pressure. This was done to meet the international statistical standards. I would like to respond to those people who claim that statistics is fixed in Belarus. Nothing is sugar-coated here. We work in close contact with the International Monetary Fund. We are not asking the IMF for any loans today. But their opinion influences the rating of the state. You cannot cooperate with the IMF without having all your cards on the table. These are the professionals of the highest level. Belarus does not refuse to cooperate with the IMF. This year the country is set to pay out about $1 billion on its debt. They provided us with a very good loan a few years ago. We work with them. You cannot cheat in this cooperation. The World Bank knows Belarus inside out. Therefore, the claims that there are some manipulations with statistics in Belarus are total nonsense. First, we do not do this. And second, if you do it today it will come back to bite you tomorrow.

It was hard for someone, and easier for others. This is true. About 10 million people live and work in our country, including foreign citizens. Someone got $1,000, someone $300.

Pensioners were paid even a little less. It was different for everyone. But there are average indicators; they are standard throughout the world. Last year our gross domestic product increased by only 1%. And this time I agree with our opposition mass media which asked me why we worked worse and got bigger salaries. Labor productivity should be much higher. In fact, it was even lower than we had planned. Nevertheless, the average salary in the country increased. They are right here. But you know, the wage growth is good, but the prices increased too. I would not say that we have put people in an impossible position. Absolutely not. Nevertheless, the wage growth was not commensurate with the productivity growth. These data are objective. In 2013 the well-being of people improved on average. Money incomes rose by more than 17%, three times topping the projections of 6.5%. The real growth in incomes totaled 140% as compared to the year 2010. Some people have their wages below the average $580. I admit this. The wages in the public sector are $120 lower. This too is unacceptable. But I cannot raise the wages of public employees to the level of 90% of the wages in the real production sector at once, as was usually the case in our fat years. We will increase them gradually. And we are doing it already today. But everything will depend on the economy. I was often criticized after the big crisis we had went through. Back then the wages dropped to about $300-350. I said that we had promised that the salaries would make up $500. Why $500? Because $500 is the average income on which you can live in Belarus. You will get this money if you work well. And if you try to make some extra money, then you can make twice as the average wage. Therefore, it is wrong to say that Belarusians saw a drastic decrease in the living standards, and incomes. I am very glad that our people became richer. Every other family has a car, and more than one. This is the statistics. Here we have overperformed the rich Russia. By the way, Belarus is in the first place as far as the purchasing power parity is concerned. What is the purchasing power parity? It means that you can buy more goods for $100 in Belarus than in Russia. Standards of living, prices are important here. This is official statistics. Therefore, they can criticize us as probably someone’s needs are not satisfied. Everyone is entitled to his opinion. But we need to see the real picture. The global crisis hit Europe. It is Belarus’ top trade partner. The trade with the European Union is even bigger than that with Russia. Russia is in the second place.

Belarus is Russia’s main trade partner in the CIS and the fifth largest trade partner in the world.

What happened on the markets? The markets collapsed. The Russian market stagnated, so did the European market. Everyone acknowledged that our main trade partners were in crisis.

Of course, it affected Belarus too.

The economic growth in Belarus was 9.8-11% in previous years, the same as in the People’s Republic of China. We were as good as China. It was our biggest growth ever.

I was even slightly afraid of an economic overheat, but the growth was good. We ramped up our production, upgraded a number of big companies. We did a lot then. We built a lot and at reasonable prices. The wage was above $500. It was a dramatic growth of our economy. Today we have outpaced the Soviet period more than two times.

It is natural that bonanza growth periods are followed by recessions. It is true about any country. We needed to switch to the quality growth of our economy then.

It is a great pity that this period coincided with the second wave of the crisis of our main partners. Apart from that, Russia limited oil supplies to our plants. We received some two to three millions of tonnes of oil less. As for potash fertilizers, the country lost $1.5-1.7 billion. This is the sum we lost and which created some sort of devaluation fears in the society.

I think that even if there were no global crisis, the Belarusian economy would have faced recession anyway.

We reached a so-called ceiling in the development of our productive power and output. We will continue growing, perhaps up to 5%. It is unlikely we will add more than that since our industry is mainly processing. If we grow big, we will have to increase imports. I do not believe it is worth doing. We have finally found some sort of a balance. I told you why we failed last year. The reason was in bad planning. I asked Myasnikovich (Prime Minister Mikhail Myasnikovich – Editor’s note): “What will generate an 8% increase?” He answered that together with Nikolai Snopkov they had calculated everything. But their calculations did not work. Moreover, there were some negative factors. You are aware of the situation in the construction industry and agriculture…

There is a lot of criticism over Belarus’ debts. Everything is relative. Our entire gross debt makes up about 50% of GDP. For example, in the United States the figure stands at 101% or $17 trillion. The gold and foreign exchange reserve in Russia makes up less than $500 billion. They spent a lot of money to support the Russian ruble. Italy, Greece, Ireland, Portugal owe more than they produce in a year, or over 100% of GDP. As for our public debt, it is 12% of the gross domestic product.

Of course, it is better to have no debt at all, especially, for an economy like ours. We do not have much oil, abundant natural resources, gas, the prices for which are still high. We need to buy this all. Therefore, there is no escaping it. But Belarus fulfills its debt obligations. We will pay whatever we are due. I would like to thank the Russian government for providing support to Belarus in the hard times. They were not the only one to support us in that moment. We received support from the People's Republic of China  and international organizations, including the Eurasian Bank. We have received very attractive offers regarding financial resources for our economy. We are considering the proposals where the interest rate is under 5%. There are proposals where it makes 3%.

About Money

Director General of ZAO Stolichnoye Televideniye (STV channel) Yuri Koziyatko asked the President about the situation on the foreign currency market. Aleksandr Lukashenko said:

Everyone has been predicting the devaluation of the national currency, except for the President. Both people and enterprises have been predicting it. I said that we will not do the artificial devaluation of the national currency to give a breath of air to BelAZ, MAZ, and other major companies. The devaluation of the national currency always results in price growth. We have been there. Therefore, we will not do it.

If we have an opportunity, we will maintain the stability of the national currency, but not excessively. Nobody will reproach us for this. All countries do this. If there is a frenzied demand for U.S. dollars and people queue in exchange offices, we will not maintain the exchange rate of the national currency at any costs. We need to set the exchange rate floating. That was what was done in Belarus. Last year the national currency devalued by more than 10% against the U.S. dollars, and by over 9% against the basket of currencies – U.S. dollar, euro and Russian ruble. With the economy we had last year, with the foreign trade deficit, we chose not to maintain the exchange rate of the national currency at any cost. We let it devalue, but devalue gradually. With the parliamentary and presidential elections in sight (you know the reason), those who wanted to speculate on it were backed up by major financiers to start a campaign in the so-called opposition media. I said the devaluation would not happen! I wanted to show that these are useless financiers and economists who pushed this devaluation topic. They encouraged people's interest in the topic. I addressed independent specialists with a request to calculate the consequences of a one-time devaluation of the national currency by 5-15%. They were unanimous in the futility of the step. It fortified my understanding of the situation. I have done everything possible to avoid devaluation of the national currency.

Yes, I sought and asked for loans. I borrowed this money, named the lenders. I do not think I did anything wrong. The new year came. You know what is happening on the foreign currency market now. People started to sell foreign currency. I did not violate any objective economic laws. As the head of state I did everything to maintain the stability of the national currency, at least at this stage. I will act like this in the future, keeping the exchange rate issue on my radar. I showed that all the arguments provided by our financial experts who sit idle are good for nothing. Life is more complex that our economy which, of course, is based on objective laws. Today people have realized that we have enough gold and forex reserves. Soon we will get around $1.5 billion in loans from the Russian Federation to beef up our gold and foreign currency reserves. In case of urgency, we will support the economy provided we have excess reserves. There should be no fears.

People often confuse the terms devaluation and denomination. We will think about denomination together with experts when the time is ripe. We need to be very careful here. We are ready to carry outdenomination at any moment. However, there should be certain conditions for this measure, which is clearly technical in nature. The interest rate should be lower, the market should be calm. The economy should be free from the symptoms of crisis. We will choose the appropriate time and announce the denomination not later than six months before it is carried out. The old and new banknotes will be in circulation simultaneously in the course of at least one year. Therefore, there is no need to be afraid of this process. Nevertheless, we are still not ready for it. I do not mean the agencies which will carry out this denomination. I mean the people and the economy. I think that we will overcome this difficult recession stage. And even if the economy recovers this year already we will tell the people about this denomination six months before it is carried out.

However, the denomination should be well-timed. We do not want people to reproach us for carrying out denomination and some making a fortune of it. I have one strict requirement: if we have to round prices off, they should be rounded down. People should not lose anything on this. I assure you, denomination will be announced in advance. There will be no devaluation of the national currency.

Modernization Strategy

The question of Chairman of the Board of ZAO Second National TV Channel Grigory Kisel pertained to modernization. The President answered:

Modernization should penetrate various walks of life, not only a separate segment. However, the economy is the foundation of our life. The economy is the major area of modernization. When we upgrade the economy to a brand-new level, we can modernize everything. I will give you an example. After selling one tractor we earn $350. The rest is spent on parts and other things. I am displeased with the situation. Yes, we used to earn $50. Now we have more. But it is not normal. And as President I should not leave the issue without attention. This is a modernization area as well.

I have recently discussed the establishment of car production in Belarus with Chinese partners. It has been my presidential dream.

Today we are engaged in very difficult negotiations with Russia and others to get access to the markets. Nobody wants to open up their markets. It is difficult to penetrate this saturated market. We will gradually work towards our target of making 120,000 cars per year. The fact that the Chinese inject $600 million into the project proves that they have something in mind. But for me it is important that we produce a new car in our country. A prudent person who knows how to save money will buy this car. The development of the car manufacture in Belarus will give an impetus to other companies which will make spare parts.

We will modernize these plants using loans granted by the People’s Republic of China. We will offer good cars. At least, our people will have a choice: to buy a cheap Belarusian car or to buy cars produced in Russia or in other countries.

As for modernization in general, diversification is among the objectives pursued by modernization in Belarus.

Belarus will actively promote the industries that rely on local resources and raw materials. These are agriculture, wood processing and a number of other economic sectors.

We have plenty of woods. And we are capable of ramping up wood processing by several millions of cubic meters per year.

Therefore, we should carry out modernization with a view to boosting the volumes of wood processing and sales.

We will expand the use of the available resources, even through they are scarce. For example, a new pulp and paper factory is being built in Svetlogorsk by Chinese specialists. The project has raised $800 million in investment. We build this facility because we do not make white pulp here. Therefore, we have to sell timber for a song and import white pulp. As soon as we build a new plant we will promote our wood processing industry to a brand-new level. We make ambitious statements that we, Belarusians, want to be a sovereign and independent nation, but we will never be so if we avoid modernization of our life and production. It is impossible to survive without modernization today. Modernization in Belarus is targeted. Every head of an enterprise should have an upgrade plan. Of course, we will support promising projects which will pay off in three to four months.

That is what modernization is about. Had we not done it, there would have been nothing to talk about today.

About Legal System

Editor-in-Chief of the newspaper Sovetskaya Belorussiya asked about the reformation of the law enforcement system, amnesty and political prisoners. Aleksandr Lukashenko said:

The decisions to reform the judicial system and to set up the Investigation Committee were made following a thorough and scrupulous examination

Of course, I was worried and afraid that this might pose a threat to the stability and security we are proud of. However, as soon as I realized that the country is strong and we are ready for that, I immediately made up my mind to go for it.

As for the second question, I welcome amnesties in general and usually personally initiate them.

Currently Belarus’ prison population is about 30,000 while in the 1990s it was about 70,000. The crime rate declines by about 6-10% every year. An amnesty does not lead to an increase in the crime rate. So we can carry out it.

As for the so-called ‘political prisoners’ in Belarus, the Belarusian Criminal Code has no articles about political crimes. Those who call themselves political prisoners could be pardoned if they wrote a petition for pardon, as is required by the Belarusian legislation. There was only one condition and it was legitimate. You write a petition (do not say that you are guilty if you think you are not guilty), and forward it to the one who can pardon you and I will make a decision, I will pardon.

Some decided to stay in prison until the next electoral cycle (I am quoting them). They do not want to apply for pardon. I tell them: you can stay in prison if you want. They keep pushing me, but I have already voiced my terms: the terms are the same for all – if they file a petition, I will consider it (and release them), because they are not worth ruining Belarus’ relations with Europe and America.

They live in sync with electoral cycles. They want to be released as heroes. I will make sure they will leave prison like heroes.

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