Approval of the Social and Economic Development Programme

Alexander Lukashenko signed the 2011-2015 Social and Economic Development Programme, which was part of his election campaign.

The Programme envisages that in the following five years, the GDP will grow by 62-68%, industrial output by 80-90%, and capital investment by 90-97%. By 2015 the country will reach a surplus in foreign trade by 0,5-0,6% of the GDP (currently a deficit of 15%). The active income will be increased by 70-76%.

Comment

It is planned that the financing of investment and the production rate growth will be achieved due to credits and external resources. Obviously, the burden will fall on the banking sector, as well as on the state budget of Belarus, which will be forced to partially compensate the interest rates to provide these resources. There is a big question mark so far regarding the attraction of foreign investments.

Adoption of an a priori impracticable Programme could be explained by bureaucracy or by lack of resources for development of a new one, as well as by inability/unwillingness to acknowledge openly the failure of the previous development paradigm and the need for painful and unpopular structural reforms, which will result in lower revenues and increased unemployment. Moreover, it is also likely that the authorities hope to receive stabilization loans or to sell part of the state property and to “skip through” (with minimal reforms implemented) the troubles against the background of the increasing world prices and changes of the world’s geopolitical situation. In any case, the implementation of the Programme is not feasible, even with the parameters of macroeconomic policies Belarus has offered to Russia.