BALLOONING TRADE DEFICIT CAUSES BELARUS’S TO CONSIDER IMPORT DEPOSITS.

Belarus’s trade deficit ballooned to $919.2 million, or 16.1 percent of GDP, during the first half of 1997, according to data released by the Ministry for Foreign Economic Relations. (Russian agencies, August 11) In response, the government and the Belarusan National Bank are preparing to introduce a system of mandatory "import deposits" designed to "protect national producers". If implemented, this deposit scheme could make consumer goods less available in Belarus than is currently the case.

Under this scheme, importers must deposit into a Belarusan bank a sum equal to 10 percent of the value of imported products. Deposits must be made even when the imports occur through a barter deal. The deposits, which must be made in Belarusan rubles at the official exchange rate, will remain frozen for a period of six months. Their value will be indexed to the rate of inflation, and interest will apparently not be paid. Deposits must be made for the import of such foodstuffs as potatoes, cabbage, carrots, beet, cucumbers, apples, sausages, and other meat products, as well as for sugar, chocolates, chewing gum, cheeses, vodka, beer, and salt. Imports of flowers, carpets, clothes, shoes, tiles, cut glass products, TV sets, musical instruments, and furniture are also covered by the scheme.

These developments suggest both that the Belarusan economy is overheating, and that Belarusan firms producing consumer goods are facing stiff competition from higher-quality imports. They also suggest that, despite reports of shortages of consumer goods and meat rationing in Minsk, the Lukashenka regime seems more sympathetic to the demands of enterprise lobbies than it is to the needs of consumers.

Belarusan Air Defense Units Exercising in Russia.