Publication: Monitor Volume: 3 Issue: 150

In an interview published by a leading Ukrainian weekly, Henadz Karpenka, chairman of Belarus’s National Economic Council, described official rhetoric about rapid economic growth in Belarus "a regular lie". (Zerkalo nedeli, July 12) Karpenka’s assessment contrasts with claims of Belarus’s "economic miracle" made last week by First Deputy Prime Minister Pyatr Prakapovich. He told a press conference in Minsk that Belarus’s real GDP at mid-year was 11 percent above mid-1996 levels, giving Belarus the highest growth rate in Europe. (Russian agencies, July 22)

Karpenka argues in the interview that the manipulation of price indices allows the government to report inflated output figures that mask declines in real production levels. According to Karpenka, when electricity production between mid-1996 and mid-1997 is measured in physical units (kilowatt hours) as opposed to official output figures, production is actually shown to decline by 5 percent. Likewise, real oil processing output during January-March 1997 was 21 percent below its levels a year earlier, while diesel fuel production had fallen by 16 percent and gasoline production was down by 4 percent.

Such figures are difficult to square with the 14 percent growth officially reported in industrial production for mid-1997. Similar inconsistencies are apparent in the agricultural output data: milk production, for example, officially increased by 3 percent in the reporting period, even though the herd of cows decreased by 4 percent. According to Karpenka, the number of loss-making enterprises had reached 2,970 in January 1997, up from the 1,642 reported in January 1994; such an increase is also difficult to reconcile with growing production. All this, Karpenka argues, adds up to declining living standards: the average monthly Belarus wage decreased during the first three months of 1997 from $80 to $63 (based on the official exchange rate); while the average monthly pension fell from $31 to $28.

The IMF and World Bank have been reluctant to challenge publicly the Lukashenka regime’s economic propaganda, fearing perhaps that such official criticism would deepen the regime’s international isolation and push Minsk closer to Moscow. Karpenka’s revelations therefore constitute one of the most serious public challenges by economic specialists to Lukashenka’s "propaganda of success."

Division of Black Sea Fleet Delayed.