‘The Potatoes Are Gone in The End’
- 17.03.2025, 12:41
How Belarus became a country of manual price regulation.
Economist, head of the “Kosht Urada” project Uladzimir Kavalkin spoke about how the Ministry of Antimonopoly Regulation created a monopoly.
“In Belarus, accumulated imbalances in supply and demand are obvious,” Uladzimir Kavalkin emphasized on “Ordinary Morning”. “Simply put, somewhere there is a shortage of cheaper goods, and somewhere, on the contrary, there is an excess of low-quality and expensive ones.
These issues are very easily resolved by the free market — the price falls or rises, thus balancing supply and demand. But Belarus is a country of manual price regulation.
Officials believe that they set fair prices with their own hands, as Lukashenka wanted. This is where the imbalances came from, and we began to observe strange things.
For example, in Belarus, known worldwide as a country of potato lovers, potatoes just disappeared. Or exports disappeared.
Why? If the price of a product is strictly regulated within the country, it is logical that this product will start to be actively sold for export and will disappear within the country. Because why sell to the domestic market at a low price if you can sell to the foreign market at a good price?
As a result, Belarusian goods disappear from the shelves and imported ones appear, and it turns out that some manual measures need to be used again to return Belarusian products to the shelves.
This is a natural result of manual regulation of market mechanisms.
Note that MART, which stands for the Ministry of Antimonopoly Regulation, should avoid a situation where a monopoly is created. When you have three or four suppliers of one product, they compete with each other and knock down the price. But if you have one supplier or a regulated price, it is obvious that an imbalance will appear.
The expert believes that the problem of falling demand for domestic goods cannot be solved using administrative resources. Moreover, he is sure that if the state violates market mechanisms for a long time, this will lead to global consequences for the entire country.
— It is clear that the Ministry of Antimonopoly Regulation and Trade should do its direct responsibilities, namely, not regulate prices, but create competitive markets that will regulate prices themselves.
We also need to liberalize the market, for example, stop appointing our own directors to commercial enterprises, protect property rights, make the courts independent — in general, we need to create all those institutions that have been destroyed for 30 years.
Lukashenka and his team have a very mistaken opinion that the market is unfair, and they are fair because they can solve everything themselves.
We all see the result: our neighbors — in Poland and Lithuania — have salaries three times higher than in Belarus. That is, when market methods of setting prices and developing the economy are used, the economy grows three times faster.
Here you have fair prices and a fair economy. Unfortunately, fairness ends in poverty. Namely, all these administrative measures lead to poverty of the people and wealth of certain people close to the authorities.
And now everything is moving towards the fact that the authorities are trying to hang the social sphere and urban development not only on state but also on private enterprises.
This means that there is no money in the budget, that the economy is not capable of generating enough income for the budget — so we will start “dispossessing the bourgeoisie and fat cats”.
We are quite close to a situation where real private business, which is built from scratch, will cease to exist in Belarus at all. The only ones left will be those that are branches of state or bureaucratic ones.
Let's say there is a state enterprise, and around it there are private offices that monetize relations with the director, officials and security forces who control everything. That is, formally it is a private business, but in fact it is a corrupt patron-client relationship.
And this state of affairs kills the prospects, talented people understand that everything they have earned, everything they have created, will be taken away from the country. And if they do not take it away, then they will be forced to give, in addition to taxes, all the earned profits for the social needs of an ineffective state.
Therefore, ambitious people with an entrepreneurial streak, ready to earn, will leave Belarus. And they are as important for the state as, for example, experienced doctors.
If a very young specialist who has gone abroad can still be replaced by another young specialist, then a highly qualified doctor leaves with all his knowledge.
The same thing happens with an entrepreneur who has built his own business without using relations with the state and the privileges of the regime. With the departure of such people, society and the country as a whole lose a lot,” Kavalkin is sure.