Leanid Zaika: The Epidemic Draws the Line

Stop riding the dead horse!

According to the report of Belneftekhim for January-March 2020, the volume of oil processing decreased by 40.6% at the Belarusian refineries. Exports of Belarusian oil products have dropped by 63% - to $527 million. Meanwhile, the authorities say that GDP has allegedly decreased by only 1.3%.

Is it possible and what happens to the Belarusian economy? Charter97.org discussed it with the head of the Strategy analytical center, economist Leanid Zaika.

- Could GDP fall by only 1.3% if the export of oil products fell by 63%?

- It depends on how one calculates (laughs). They can do such "calculations" by various "methods"... They may have simply made an addition of the output. However, this calculation does not reflect the real state of the economy.

Moreover, prices have changed dramatically and the Belarusian ruble exchange rate has collapsed by 25%. Therefore, it is quite easy to "hide" the real losses of the economy by making calculations in Belarusian rubles - a relatively small figure could eventually appear due to the exchange rate drop. These are tricks I would not rely on.

As of May 20, I would ignore macroeconomic indicators for Belarus. The reason is simple - the era of oil and gas economy is coming to an end. There is the heaviest argument - oil prices fell to minus six dollars.

Even a man like Anatoly Chubais said that "that's enough. It's time to shoot this oil horse down and get out of the narcotic hydrocarbon economy".

In general, I am surprised by this idiocy, when a tanker with so-called "American oil" for Belarus arrives and Colonel Vladimir Vladimirovich says he "was pleased" to learn about its arrival.

Do you guys live in the circus? Why do you take this Arab or Russian oil from America? Think about the near future, about your refineries. You were so inspired by Russian oil premiums. Why are you silent now? How do you plan to restore your refineries?

You've been told a hundred times that the oil era is over. Think over the production of electric transport, 3D technology, robots and so on. Guys, where are your robots? Why do such small countries as Singapore and South Korea take the floor in this area? 800 people out of 10,000 inhabitants are involved in it there.

The problems of the Belarusian GDP related to the export of oil products look as ridiculous as the problems of the production of straw shoes and oat flour in Belarus. Does the crisis in the production of straw shoes or oat flour have a greater impact on the economic decline?

Given such exchange rate fluctuations, all the figures related to GDP are useless now.

- What is the real state of the Belarusian economy during the coronavirus epidemic?

- Here I will speak as bravely as Marshal Budyonny cut heads off at full tilt. The Belarusian economy is already in such a condition when everything in it is decaying and dying out and it is a positive sign.

It means that some industries have no prospects at all. The sooner the country gives up on them, the sooner it will enter a new, restructured economy.

We see businessmen asking: "Give me a subsidy and I'll open my Chip Chip 1 Cafe." Or, "Give me the money and I'll restore my Grunwald restaurant". I want to tell that they are betting on the wrong horse. You should realize what's going on.

Everything that is decaying now in Belarus has good reasons for it. As strange it may sound, there is a positive thing about it: it will take little time to give up the old unnecessary structures. If the horse is dead, there is no need to ride it. Stop riding a dead horse! It's a well-known cowboy rule.

Two people in the post-Soviet space always make me laugh. When I listen to them and read them, it excites me.

The second person is a dentist from Turkmenistan, Gurbanguly Berdimuhamedov. He is a dentist and when he came to power, he abolished taxes on dentistry. Lukashenka is a good example of "super integrated" collective farmer. If Turkmenistan takes care of dentists, Belarus "takes care" of agrarians. In an epidemic, Lukashenka does what the Turkmen dentist of the Belarusian subspecies should do - "restores" agriculture. It is great that he was not a gynaecologist before...

This is my "diagnosis" of what is happening now in the Belarusian economy.

- If there is a "diagnosis", then how will the "clinical picture" develop?

- You know, looking at the faces of members of our government, I feel that those who talked about an anthropological disaster to come to Belarus were right. We are lucky that they have not yet managed to make too many mistakes and to break what is being created without the involvement of the authorities.

The problem of Belarus is to create an obstacle for these man-made crises and those who create them.

The economy of any country is "unbeatable" in some way: even if it is shot down. It will remain and operate, although not all its elements will make it through.

For example, the Belarusian export has dropped by 15% since early this year. It indicates our non-competitiveness. As for the economy itself, the problem is different: one should admit that the main task now is restructuring.

The world is changing rapidly. In the pandemic, we have found that the Belarusian system is completely uncompetitive. For example, we do not have a distance learning system at all. Our schools and universities have completely failed. The authorities have also failed with many things during the epidemic - not only with the economy.

The authorities think that no introduction of quarantine "saved the economy"... As for me, they have not saved me. Businessmen are failing now and no one saves them either. They're told to stay away from the shore.

How can our authorities "save the economy?" They can just turn on a printing press. I mean, they can only "save" with counterfeiting. Well, it's a crime.

The second thing they do during an epidemic is to drop into hospitals and watch doctors poorly equipped with masks and gloves. However, they do nothing to somehow fix it. Belarus turned out to be unprepared for the coronavirus epidemic!

This phrase - "to save the economy" - seems interesting to me from the psychology of people in power. They stand inshore, and when entrepreneurs drown, they say: "Guys, we're going to bring you 25 lifebuoys for the whole country".

In general, the epidemic has drawn a line: this power has proved to be extremely ineffective. I observe a complete misunderstanding of what is happening in the country. For example, I would cancel all taxes for entrepreneurs until September 1 and also free them all from rent.

Instead, Lukashenka announces "presidential elections"... Guys, what "elections"? You have proved yourself a complete failure in this epidemic. Both Lukashenka and his "parliament" have brought the country and people to the disaster. Do you still want to continue? Can't you understand what you've done?

This "enlightenment" will be very hard for you to bear later. You can't deceive people.

You know, I once had a comrade in the army. He was quite a funny man, an athlete. One day he found a job on the Blak Sea as a lifeguard. Do you know how he saved people? "I see someone swim beyond the buoys - I hit him on the head with an oar, and then I pull him out". Our authorities do the same.

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