Leanid Zaika: It’s the Collapse of the System

We'll fix it.

Lukashenka has appointed new heads to the board of the National Bank. Staff reshuffles occur amidst the scandal with Belgaprombank and the massive outflow of deposits from Belarusian banks. Analysts note that the National Bank is becoming more obedient in the implementation of orders from above.

Famous economist, head of the Strategy analytical center Leanid Zaika commented for Charter97.org on the situation in the financial sector of Belarus.

- Leanid Fedaravich, what was the need for reshuffling the board of the National Bank?

- It's hot now; we need either to swim in a river or take some measures. In Soviet times, there was such a thing as "take organizational measures".

- It is noteworthy that six major banks have appointed government representatives. What is the point of such measures?

- It's a measure for Lukashenka. He has appointed those responsible for the enterprises, now he appoints supervisors in banks, and then in schools and kindergartens. It indicates the collapse of the system.

Lukashenka's actions remind me of the fire in Moscow the century before last. Do you know what people used to save in pre-revolutionary times? People behaved inadequately as Lukashenka behaves now. They usually save boiling tanks, not gold. One of my school friends ran into the burning house and took out a party membership card, and the gold melted down.

Lukashenka saves a boiling tank. He needs to be wise now, to cancel taxes, increase the share of budget positions in universities, hold some national holidays, but he will not succeed.

- Why does Lukashenka impose a huge number of unusual functions on the National Bank?

- He is not a professional. The only task of the National Bank is to ensure the stability of the monetary unit, maintaining the supply of money. Everything else is beyond its remit.

At our university, when the dissertation was completely useless, we used to say "these actions have no scientific value". Therefore, Lukashenka's actions have no scientific value. It's just a small event.

Professionals won't even argue. The head of the KGB was engaged in the production of ski racers. All KGB members will ride these ski racers heading right to Mi-6 in London to surrender. It incites only regret. Lukashenka should relax.

- Why do Belarusians withdraw their deposits?

- The inflow, the outflow of deposits... I read these articles, the so-called financial analysts will come up with anything. If you look at the market of money and goods, people have been cut off from the system of consumption, all trips abroad have been eliminated. That is why the picture related to the behaviour of households and expenditures of the population has changed dramatically. Now the world is opening up a little bit and expectations for the future are growing. People may plan to go abroad and it will require currency.

As for the volatility of the monetary system, some of my colleagues were very illiterate on this topic. Any professional economist will never create a situation of chaotic or frightening nature when it comes to the national monetary unit. People not engaged in economics should do this.

I would like to stress one thing. Dear Belarusians, as well as girls-presidential candidates, team members and others, remember one thing for the future: China and Russia will get rid of the dollar. Now dollar experiences huge pressure. Russia will no longer use the dollar during internal and external settlements.

The only way out for Belarus is to preserve the country as an area where the dollar has a proper value. If I were Lukashenka, I would encourage its greater use for Russian investors to bring dollars to Belarus, too.

If Putin decides to get rid of the dollar - let it be his problem. We'll be a dollar country and give higher rates on international obligations. We buy dollars at 6-7% abroad, while we buy 1.5-2% here. It makes no sense. Pavel Uladzimiravich was wrong here. Therefore, the population will withdraw deposits when the picture is vague. If the National Bank and Kallaur, as well as Lukashenka, continue to pursue this policy line, we will have to dismiss them.

- Has the scandal with Belagzprombank undermined the already low credibility of Belarusian banks?

- It has never been high in our country. Banks used to operate at a negative interest rate. They took money from you and offered you miserable interest. They were subsidiary institutions.

The credibility of banks must be diversified. If you're a normal person, then why should you bring $170 thousand to Belgazprombank in Minsk if you're a citizen of Ukraine? And placed it in a safe deposit box. Only a fool can do that. The money should work. A normal specialist has no cash at all.

There is no pathetic. Money should work everywhere. The Japanese created a very strong system because people shouldn't have cash. There were always two or three offices of a bank or an investment company on every street and people could give their money for it to work.

I had a banker who went to work and built an expensive apartment. I offered her to rent out her apartment. A month later she tells me that she rented it out for $1,700. She immediately started building a second apartment, which she also rented out.

- Is there a risk that the "pet National Bank" will turn on the printing press by order from above?

- Yes. I've known Pavel Callaur for a long time. With all due respect, he's not a strong fighter. He'll eat a blow and bow his head; he has no partners.

If the authorities say that the government runs the bank and the bank should worry about the welfare of Belarusians, they're talking nonsense. They should either continue their studies or there should be a strong leader in the National Bank, who can say: "No, this is wrong”.

Guys, stop doing this mess to the banking system. You can line up banks' directors and let them ride bikes near the residence once a week, and Lukashenka will count how many of them have arrived. You can do stupid things, but the monetary system should be the most conservative and stable. Some missile base may explode, 50 tanks may fall into the river, but the monetary system should not fall into the river and listen to fools. However, they had a girl in the administration who was a specialist in the water supply system, KGB general was just a methodologist in the department, the Prime Minister knows how to trade weapons. Where are the professionals? These skills are not enough.

It turns out that we have to fix everything that Lukashenka is doing today. We'll fix it!

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