Milestones of highway

Written by Valerii Tsepkalo, Director of Hi-Tech Park in Minsk (Belarus), published in newspaper “Belarus Segodnya” 17.07.2009 (www.sb.by )     

 

    Things that caused the financial crisis have been already told and written much about. These are inflating credit obligations, irresponsibility of bankers and a lack of the control of financial sector from the states and set of other reasons. That’s it.

   But to understand scope and a sharpness of this crisis, it is necessary to take into consideration that the world economy in 2001 —2007 was characterized by prompt growth. It was the fastest lifting for all history of existence of a market economy. For six years, previous crisis, universal gross national product has grown on the whole third.

   To produce more goods, to build more houses, to erect more office buildings, to create more new manufactures — such was the general mood of the governments, of the companies and of banks of almost all countries of the world.

   Eternally it could not proceed. Finally people were not able to consume that the economy produced.

And crisis has burst. It has not passed over Belarus as well.

   Financial crisis first of all has struck on payment balance of the country. Belarus began to buy more than to sell.

   There was a negative trading balance not of that we began to import more Chilean and Argentina wines, Chinese pencils and lighters, Korean or Finnish mobile phones, French perfumes or Japanese cars.

   The reason consisted that Belarus enterprises by inertia, using pre-crisis strategy of prompt escalating of volumes manufacture, continued to buy foreign accessories and to produce production. They did it, despite lacking sale, sending production on a warehouse in hope that crisis will quickly finish, the goods will be sold or it will be bought by the state.

   Actually on the saved currency reserves during prompt growth were bought hydraulic pumps in Czech Republic, a steel — in Russia and Ukraine, accumulators — in Germany, an electric equipment — in Japan and Korea, monitors — in France etc. The spark of import accessories in a total cost of a final product on many Belarusian industrial enterprises reaches 60 and even 80 percent.

   For foreign manufacturers such tactics meant the direct financial help from the Belarus enterprises.

For Belarus was washing away of currency reserves and formation of negative payment balance.

As a result for first four months of this year the trading balance has developed for our country negative and has made 2,1 billion US dollars.

   To cover it, the International Monetary Fund has agreed to grant to Belarus a credit at a rate of 3,5 billion dollars.

   Logically this money should be given to banks and to the enterprises on extinguish as long-term promissory obligations which are for today about 4 billion dollars, also and short-term credits.

   By the way, similar problems have arisen in Russia where the majority of large enterprises have huge debts. Unlike Belarus where the external debts have arisen thanks to acquisition of the import goods, the Russian companies basically used foreign loans for acquisition of actives abroad. As a result the external corporate debts of the Russian companies began to exceed essentially the international reserves of the state.

    But if Russia has a serious reserve — minerals, oil, gas and other natural resources by which it is possible to fill up the budget regularly, Belarus needs external loans.

 

Translated from Russian by Anastasia Senkovets