… RECENTRALIZING FOREIGN TRADE, AND LEGALIZING THE DOLLAR ECONOMY.

Belarus’s external pressures, combined with continued controls over prices and the overvalued exchange rate, are also pushing the government towards recentralizing foreign trade. A decree that would recreate the Soviet-era government monopoly on the import and export of selected products is awaiting government approval. (Interfax, April 19)

Belarus’s external pressures have combined with price controls on consumer goods and the maintenance of an artificially strong exchange rate to keep prices for many products in Belarus much lower than in neighboring countries. This has resulted in the predictable but apparently unanticipated (by the government) export of goods with controlled prices–officially described as the “massive, uncontrolled exports of socially sensitive products.” Government “experts” are therefore claiming that “Belarus is experiencing a pronounced food shortage.” (Interfax, April 19)

Tightening government controls on foreign trade, especially imports, is thus viewed as necessary to combat these shortage pressures. This is particularly so for foodstuffs, tobacco and alcohol. Ironically, however, the government intends to combine these recentralizing measures with the liberalization of household foreign-exchange holdings. According to a draft presidential decree awaiting Lukashenka’s signature, foreign-currency accounts held in Belarusan banks would be guaranteed by the government and subjected to banking secrecy. Their holders would not have to document the source of their funds. The decree would also cancel the requirement that purchasers of big-ticket purchases like apartments and automobiles document the source of funds used to finance them.

According to National Bank Chairman Prakapovich, these measures are intended to attract an estimated $2 billion in household foreign exchange holdings into the official banking system. (Interfax-Zapad, April 16) Such initiatives, however, could well be undercut by the government’s antipathy towards private enterprise–which is apparent in its ever-widening regulation of prices and foreign trade.

FORMER DEPORTEE ELECTED CHAIRMAN OF MOLDOVA’S PARLIAMENT.