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December 26 – January 1, 2011

FORECAST FOR 2012

The situation has not changed
FORECAST FOR 2012

The economic agreements signed by President Lukashenko in Moscow and the first major sale of the assets of the Belarusian Beltransgaz will strengthen the political authority of President Lukashenko and his administration for a while.

It is also likely, that the proceeds received just in time, will allow the authorities to restore the lost popularity among the population, and in particular, the electoral rating of the President. At the same time, the security forces and the Government will continue fighting for the preservation of the conquered positions, which will only decrease the level control over the whole public administration system of Belarus.

The stabilization period in question, will last no longer than six months to a year. After that period, the acute issue of how to keep up citizen’s standard of living and the popularity of the authorities will return back on the agenda, most likely leading to a new management crisis.

In 2012 the main trends of the previous years will continue: the external debt will grow, there will be a shortage of the gold reserves, there will be some non-transparent privatization deals, competitive ability will deteriorate, incomes will fall, unemployment will rise and hidden labour migration to Russia will increase, there will be investment crisis and the gradual decay of production facilities.

The government has once again demonstrated that it would implement economic reforms under strong external pressure by creditors only. 2012 will inevitably result in recession and deindustrialization, increasing misbalances in the key sectors of economy and flows of financial resources, as well as general voluntarism and unpredictability in the economic policy.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.
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