New Belarusian government faces new tasks, challenges to develop economy

MINSK, Jan. 28 (Xinhua) -- The House of Representatives of the Belarusian Parliament held an extraordinary session on Thursday and agreed to appoint Mikhail Myasnikovich as prime minister of the country.

Myasnikovich was named as country's new prime minister by Belarusian President Alexander Lukashenko on Dec. 28 last year in a government reshuffle that came less than two weeks after the presidential election.

Myasnikovich, 61, an academician and a close ally of the Belarusian president, replaces Sergei Sidorsky who had been the country's prime minister since 2003.

The new prime minister was tasked with restructuring the country's economy, eliminating imbalance in the financial sector and increasing foreign direct investment by President Lukashenko.

To improve the country's trade deficit, the government intends to double its export in 2011 over the past year, but whether the target could be met remains questionable.

Experts predict that export growth will be linked to the dynamics of the country's major trading partners -- Russia, Germany, China, Venezuela and Ukraine.

However, as pointed out by Independent economist Sergei Chaly, "the model of export growth is in serious jeopardy... Demand fell."

The new government also decides to spend more than 30 billion U.S. dollars over the next five years to foster innovative development program, which the experts believe would not only bolster new technology-based production, but also improve the competitiveness of the Belarusian products.

The new government will also have to learn to live without external borrowing, which has been playing a very important role for the Belarusian economy.

Belarus' gross external debt amounted to 25,593.3 billion dollars as of Oct.1, 2010, and President Lukashenko has said that it is time to "live within our means."

What's more, due to sanction threats made by the European Union (EU) and the United States over the country's disputed presidential election, analysts said that in the near future the Belarusian economy will hinge on relations with Russia, the main energy supplier of Belarus.

The EU said on Jan. 29 it would reinstate a travel ban on Lukashenko if he fails to release his opponents jailed after the presidential election on Dec. 19, 2010. Washington is also exploring a range of possible sanctions.

Though Lukashenko has brushed off U.S. and EU criticism and warned he could take countermeasures against the states that impose sanctions, a spat with the West would force the Belarusian authorities to seek foreign loans from Asia.

In recent years there had been tension in relations between Russia and Belarus, but amelioration appeared before the presidential elections in Belarus in December 2010, when Russia chose to distance itself from what it said was Belarus' "internal affair" and more importantly, dropped duties on oil exports to Belarus, which had been a stumbling block in relations between the two countries for at least two years.

Russian Prime Minister Vladimir Putin hosted Myasnikovich on Jan. 20, one day before Lukashenko's inauguration, for talks aimed at pursuing joint economic projects with Minsk and strengthening ties.

Belarus is an important transit route for Russian energy, with a fifth of Russia's gas supplied to Europe crossing its borders, as well as a significant portion of oil.

Addressing the energy dispute, Putin said that Belarus would continue to receive subsidized oil supplies from Russia.

Meanwhile, Belarus experts also downplayed the effects of European countries's sanction threats.

Political scientist Olga Abramova said that Europe had few levers of economic pressure, saying, "the only threat would be a strong rejection of energy supplies from Belarus, but it is very unprofitable for Europe itself."

Belarus exports about 2.4 million tons of diesel per year, mainly to northern Europe.

Despite the difficulties in the international arena, analysts said that the authorities had maintained stability on the domestic scene that would allow the country to develop dynamically in the future.

Presenting the new prime minister, President Lukashenko said that gross domestic product per capita and living standards of the Belarusian people should be closer to the European average by 2016.

The president also called on the new government to work on improving legislation in line with modern demands of economic liberalization.


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