OREANDA-NEWS. November 28, 2008. The foreign economic threats related to the global financial crisis will be minimal for Belarus, Vice-Premier of Belarus Andrei Kobyakov said when speaking in the House of Representatives of the National Assembly, reported the Official website www.government.by. 

He noted that Belarus “has not burdened itself with a heavy foreign debt.” the country has been enjoying quite a stable high economic growth. At the same time Belarus will not be able to avoid the influence of the global financial crisis,” Andrei Kobyakov said.

“We are all concerned over the global financial crisis, how bad it can affect our economy, how reliable and liquid are assets and reserves are,” the Vice-Premier said.

The exporting companies of the Industry Ministry of Belarus, the Belneftekhim and Belbiopharm concerns have come under the pressure of the global financial crisis, Andrei Kobyakov said. According to him, business activity has started falling; the demand for the produces in the Russia and other foreign markets has been reducing.

At the same time, Andrei Kobyakov said that there are all prerequisites to meet the industrial growth target in 2008. For the entire year the industrial production has been growing and is presently at the level of 12%.

The foreign threats for Belarus can be connected with the foreign economic trends. However, Belarus has not allowed speculative capital in its economy. Neither has it violated the criteria of economic security. These factors will help the country minimize the influence of the crisis, the Vice-Premier believes.

He also informed that additional legal support could be provided in order to continue implementing the programme of the development of small towns.

During the global financial crisis the administrative protection of the domestic producers of consumer goods is weakening, Andrei Kobyakov said.

He noted that the producers of consumer goods are especially vulnerable today, as the demand for the products in the foreign markets has started falling. In this case, the administrative protection of domestic commodity producers gets weakened. Therefore, the support will be provided by means of improving the legal-treaty base, Andrei Kobyakov said. Yet, the commodity production target will be fully met in 2008, he said.

In 2008 the inflation in Belarus will reach 14-14.5%, Vice-Premier of Belarus Andrei Kobyakov said. Over the ten months the inflation in Belarus made up 10.5% or 1% per month.

According to Andrei Kobyakov, the inflation is mainly fueled by outside factors such as growing prices for energy, raw materials, food.

“So far the inflation in Belarus has been lower than in the neighbouring countries. We believe that by the end of the year the Consumer Price Index will increase by 14-14.5%,” the Vice-Premier said.

He reminded the MPs that the ten-month inflation in Russia reached 11.6%, in Ukraine 18%.

In January-September 2008, direct foreign investments in Belarus amounted to US1.9 billion, or 35.8% of the total nine-month foreign investments (US 5.2 billion), Andrei Kobyakov noted.

According to him, by the end of the year Belarus will preserve high investment activity: capital investments will increase by no less than 20% (the projections stood at 115-117%).

He reminded that Belarus has recently held the Investment Forum in London. “We got an opportunity to present Belarus’ economy, socio-economic policy and new investment possibilities for potential investors. Considering the response of the western businesses showed that we have made a serious step forward on the way of increasing the investment attractiveness of the country and that we will have an additional inflow of foreign investments in the near future,” Andrei Kobyakov noted.

The Government of Belarus has tightened the requirements with regard to meeting the target on increasing the export of services, Vice-Premier of Belarus said.

“We pin special hopes on the transit potential of the country and its efficient utilization,” Andrei Kobyakov said. Special programmes have been developed for this purpose. They stipulate the construction of 53 logistics centres.

In general, the foreign trade has been growing but there is some slowdown in respect to some indices. In January-September 2008, the export of goods and services was up by 53.9%, import by 54%.

The deficit reached US 2544 million, up US 888 million from January -September 2007.

“The final balance of foreign trade is a many-component parameter which is influenced by the global trends, innovation potential of the economy, competitiveness of products and institutional environment. Foreign trade is the area most sensitive to the threats of the global financial crisis,” Andrei Kobyakov said. He also explained that the higher the economic growth is, the more feed stock, energy, equipment is needed to be imported.

“The prices for the Belarusian goods have already plummeted, especially for the products of chemical, petrochemical and machinery construction industries. The turnover of assts in foreign trade operations has slowed down which has increased the demand for loans,” he said. The ministries and concerns of Belarus have been taking necessary measures to minimize the influence of the global financial crisis.

“We do not rule out that the rate of growth of exports will slow down by the end of the year. Thus the Government is taking the measures to avoid the deficit in the foreign trade by means of optimizing imports,” Andrei Kobyakov said.

Belarus will not impose a ban on consumer goods import, Vice-Premier of Belarus Andrei Kobyakov told reporters.

He dismissed the information about the alleged list of goods that are to come under the import ban.

“In the conditions of the global financial crisis Belarus certainly welcomes the active sales of domestically manufactured goods on the national market and abroad. But the country will not introduce an import ban. At least, there are no and will not be any laws prohibiting the import of goods. The goods our consumers are used to will remain on the shelves of supermarkets,” Andrei Kobyakov said.

Belarus Deputy Prime Minister believes, the chances of Belarus’ getting a loan from the International Monetary Fund are high.

“I think there is a possibility of getting the loan and it is quite high,” Andrei Kobyakov told the press.

Belarus will get the second US 1 billion tranche of the Russian loan in February 2009, Belarus Deputy Prime Minister told media.

“We have recently received the first US 1 billion part of the Russian loan and there are prospects of getting USD 1 billion more in February,” said Andrei Kobyakov. He said, the resources may be granted in Russian rubles. “It doesn’t matter what currency the resources will be. We will discuss it thoroughly by the deadline for getting the loan,” added Andrei Kobyakov.

The present fall in oil prices should be taken into account during the talks on Russian gas prices for Belarus, Deputy Prime Minister told reporters.

He noted that the sides have been discussing the gas price for all year round. “We see how the situation is developing now, how the gas prices have been growing following the growth in oil prices, oil prices have plummeted and we believe that this is the issue to be discussed ,” the official said. We have not reached a 100% agreement on this issue with Russia so far. Belarus hopes that the sides will reach an understanding.

In the nearest future Belarus and Russia will negotiate the mechanism for switching to using Russian rubles in payments, Andrei Kobyakov told media.

The parties will discuss specific actions and documents, which need to be signed in order to implement the Russian proposal to use the Russian ruble as the regional currency and use the Russian ruble in payments and trade between Belarus and Russia as much as possible.

According to Andrei Kobyakov, Belarus supports these proposals of Russia. “But certain amounts of Russian rubles are required for the payments to be made. It is subject to negotiations. We plan to hold the negotiations soon,” said the Vice Premier.