Publication: Monitor Volume: 4 Issue: 56

In typical fashion, Lukashenka’s government treated the zaichik’s collapse as a political problem rather than an economic one. Lukashenka sought to pin the blame on his enemies in Moscow by arguing on March 17 that: "The collapse of the Belarusan ruble occurred not in Belarus, as some high-placed Russian bureaucrats have said, but on the Moscow market." First Deputy Prime Minister Pyotr Prokopovich added that the zaichik’s depreciation resulted from "speculation" by Russian banking and other commercial organizations operating on MICEX. (Itar-Tass, March 17, 18) Lukashenka directed his chief of staff, the Security Council, State Control Committee, the Belarusan National Bank (BNB), and the KGB to investigate the causes of the zaichik’s collapse and find measures to stabilize the zaichik’s value within Belarus. According to Russian press reports, the BNB ordered commercial banks to revise their exchange rates, to bring the Belarusan ruble back into line with its pre-March 13 value for the Russian ruble and the dollar. The government also ordered companies to return prices to their March 1 levels. Trade Minister Pyotr Kozlov told the press that, if the order is ignored, "directors of state-owned companies will be relieved from duty while private business will lose their licenses to trade". (Itar-Tass, March 19)

However, while these measures may have had the desired effect within Belarus — the zaichik had by March 18 risen to $1 = 45,000 for trading in Minsk — they seemed to have dramatically complicated relations with Russia. Gazprom announced on March 19 that it would cut exports to Belarus by 30 percent, due to Minsk’s inability to settle its import bills in a timely fashion. And the MICEX management responded to Lukashenka’s criticism on March 19 by temporarily suspending trading in Belarusan rubles. (Itar-Tass, March 19) Minsk’s attempts to find political scapegoats for its economic problems thus seem to have backfired. The upshot is that the energy imports needed to fuel the Belarusan economy have been dramatically reduced, and importers have (at least temporarily) lost access to MICEX, their main source of foreign exchange. These developments do not bide well for Belarus’s economic prospects.

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