Rising prices are worse than the White Maidan - Lukashenko’s batons are powerless
Lukashenko’s struggle with rising prices is a long history. And not particularly successful, as evidenced by the fact that during his reign the Belarusian ruble experienced 3 devaluations and depreciated 10 million times.
As soon as another crisis begins to smell in the economy, the Belarusian leadership tries to curb inflation through administrative measures. The results, as a rule, were not so great. It happened that goods disappeared from stores, and Lukashenko had to promise the electorate “normal human eggs” for the New Year’s table.
It happened that currency disappeared from banks and it was possible to exchange Belarusian rubles, which were becoming cheaper every hour, either from illegal currency dealers or on a semi-legal website named after the head of the National Bank.
In the second half of the tenths, it began to seem that the situation had stabilized; adequate financiers set the tone in the government and the National Bank, and inflation was gradually decreasing. But stability and adequacy in modern Belarus can only be a temporary phenomenon.
In 2020, first the search for alternative oil struck, and then Covid - and the exchange rate of the Belarusian ruble seriously deteriorated. Prices also went up, and businessmen, taught by the bitter experience of previous devaluations, included a “growth rate” in the price of imported goods.
The authorities responded to this with a formidable government Resolution No. 184, which simply prohibited manufacturers and trade from raising prices by more than 0,5% per month. The prime minister at that time was the relatively liberal banker Sergei Rumas, and with his own mind he certainly would not have thought of such a thing. This certainly could not have happened without “instructions from above.” Fortunately, the exchange rate was then stabilized, and no one really tried to implement the odious decree. Having existed for two and a half weeks, the document adopted on March 30 was canceled on April 17.
Now in Belarus times are much more severe than a year ago, problems in the economy are growing. In addition, instead of financiers, it is now ruled by security forces, and the attitude towards private business has deteriorated greatly after the elections. While the directors of state-owned enterprises obediently “took the show,” private owners were not always loyal, for which they are now paying the price.
Yesterday, Lukashenko, receiving a report from the recently appointed chairman of the State Control Committee, Vasily Gerasimov, attacked private pharmacies, which, in his opinion, unreasonably raised prices for medicines.
“Well, we have 50% state pharmacies, approximately 50% private. If we don’t bring private owners to their senses, well, then state pharmacies will operate. But we cannot allow people to profit from their health. Therefore, medications are under special control,” the Belarusian president threatened. If the threat is carried out, an entire sector of the economy could go under the knife.
The peculiarity of the situation with pharmacies is that Lukashenko kept silent about the fact that it is not the pharmacies that profit from people’s health, but the state. To plug widening budget holes and support half-dead state-owned enterprises, some taxes have been increased since February of this year, including VAT on medicines and medicines. Previously, they were not subject to this tax at all, but now the rate has been set at 10%. Of course, most pharmacy chains immediately recalculated the price tags by approximately the same percentage. It turns out that Lukashenko threatens them with destruction for the results of his own policies.
The attack on pharmacies is not the only example of how in modern Belarus they are trying to solve economic problems using team methods. On February 24, the government prohibited suppliers of 62 types of socially important goods and 50 types of medicines from raising prices until the end of February, and starting in March they are allowed to increase prices by no more than 0,2% per month. Even pro-government trade unions have joined the fight against rising prices and will have to monitor them. The same State Control Committee will not be left without work.
It is easy to guess that the result of such a price freeze could be a commodity shortage. The list contains enough import-dependent categories of goods, and Belarusian officials will not listen to prices on world markets. Manufacturers and trade will also not be able to operate at a loss for long; in Belarus there are already frequent reports of major problems with retail chains.
If you find an error, please select a piece of text and press Ctrl + Enter.
Thank you!
Now the editors are aware.