Report of the government, National Bank, oblast executive committees, and the Minsk City Hall

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The economic bloc of the country should have a clear vision of growth points in the national economy, Belarus President Aleksandr Lukashenko said as he heard out a report of the government, National Bank, oblast executive committees, and the Minsk City Hall on their evaluations of this year’s results, the draft social and economic development forecast for 2019.

On the capacity of the economy to respond to global challenges

“The equator of this five-year period is behind, the economy is on the rise in virtually all branches. There is relative price stability, people’s incomes are increasing, pensioners are supported as much as possible, we can see a foreign trade surplus. All that seemed impossible ten years ago,” Aleksandr Lukashenko said.

However, there should be no illusions of success, the head of state stressed. Many countries in the region demonstrate good indicators. “It means that we are just using the perks of the next wave of cyclic growth at the moment. But it is not endless,” the president said. “Frankly speaking, we are concerned about the fact that major trends in our economy show the signs of decline, and Belarus’ development pace is slower than the world’s average. It is inadmissible to lag behind.”

Aleksandr Lukashenko said that it is impossible to address economic and social tasks without a steady and aggressive (in a good way) growth. “We need to have an even broader look at forecast documents. Our wellbeing also depends on the capacity of the economy to respond to global challenges, and there are enough challenges today,” the head of state said. In his words, sanctions, geopolitical instability, trade wars are the new “normal”.

On growth points and restraining factors

Evaluating the aggregate debt of all states, which is more than a half of the global GDP, the International Monetary Fund predicts the possibility of a new financial crisis. “Therefore, today I would like the prime minister to inform me about the government’s vision of growth points in 2019, about the basis for building sustainable and competitive economy with at least $100 billion of GDP - this is an ambitious task for the future,” the president said. “International experts and scientists believe that we have a potential, first of all, human potential, and this is the main thing. We have people, specialists who can fulfill these tasks. Therefore, we can cope with everything. However, restraining factors still exist, and I do not see any measures for eliminating them in the forecast documents.”

First of all, this pertains to an unbalanced current account of balanced payments and strong dependence of export on one market, the president said.

“Probably, the government is trying to downplay the problem of inefficient enterprises. Ministers, governors are used to covering the gaps with budget money. Besides, almost nothing is done to create more favorable conditions for investors. These efforts are drowning in general discussions and bureaucracy. Serious practical moves are not proposed,” Aleksandr Lukashenko said.

The head of state cited the Hi-Tech Park as an example where the needs of the IT sector were analyzed and proposals to include them in the legal framework were made.

On preparedness for organic transformations

Aleksandr Lukashenko said that trade wars and the WTO crisis against the backdrop of political instability discourage investors to take risks and can provoke the outflow of capitals to the so-called save havens. Because of such instability it is especially important for the government to have clear-cut plans and understand when period of peak payments on state debts will be behind, the president said.

“Today we need to determine systematic issues, focus on discipline and understand what has to be done and in what way. The preparedness for organic transformations and the ability to change are the guarantee of success and competitiveness,” Aleksandr Lukashenko said.

On state budget and revised Tax Code

Addressing Finance Minister Maksim Yermolovich, the head of state said that he had been in charge of budget planning even before he became the minister. “Therefore, you will be responsible for it,” the president warned. “What are you planning to do with a decent trade surplus next year?”

Aleksandr Lukashenko also asked about the fulfillment of the instructions to reduce the amount of support provided to enterprises if directors of these enterprises cannot or do not want to work properly. “Have you reduced it? Or did you decide to release debts and do not include them in the fiscal revenues?” the head of state wondered. “How did you increase financing of the human capital: healthcare, education, sport, culture, etc.?”

The president remarked the revised Tax Code is questionable. “I was informed that you failed to make it comprehensible, without inner contradictions, comfortable for people and business. If it is so, do not stir up the society with raw and unprepared documents. Work on these documents, polish them in accordance with the instructions,” Aleksandr Lukashenko said.

On stimulating economic growth in 2019

Aleksandr Lukashenko asked the National Bank what measures will be taken to stimulate economic growth in 2019. “Please do not use general terms from bank documents. What are you going to do to neutralize external risks and maintain low inflation?” he asked. “Also tell me what you are going to do to change the structure of forex reserves and raise the share of non-debt funds.”

The president expressed concerns about the fulfillment of his instructions by the government. “Less than a year has passed since the appointment of the new government and I receive a letter from the prime minister where he asks to relax grip everywhere and reports on the fulfillment of instructions although they still remain unfulfilled,” Aleksandr Lukashenko said.

In his words, the Belarus President Administration, the State Control Committee and the State Secretariat of the Security Council made critical remarks. “I recommend [Prime Minister] Sergei Nikolayevich [Rumas] to gain insight of the documents he is signing because I am always keeping an eye on the fulfillment of my own instructions,” the president said.