Naša Niva: To Study, Study and Again Study Capitalism

A translation of an article by one of this blog’s authors about economic reforms, published by the newspaper Naša Niva. The government of Belarus demonstrates readiness to perform market reforms in the country and supports words by deeds. Sometimes these actions look unsure, sometimes even comical, but at the end of the day the investment climate seems to be slowly getting better in Belarus. There is still much to do, but one thing that is difficult to predict now is whether the national economy will survive the transformation without a breakdown in midst of it. Whether it is not too late for the government’s ambitious reforms plans.


To Study, Study and Again Study Capitalism

For several weeks, before and after the Belarusian Investment and Economic Forum, the media was being bombarded by news on developments around the privatization of Belarusian state property and plans for further liberal reforms in the economy of the country. Belarusian authorities finally outlined plans to make order in the Augean stables of the national tax system – the world’s worst according to international rankings. Movement in the right direction is good, but its shortcomings must be corrected.

How to attract adventurers

The Belarusian economy is perceived as a high risk investment target. To improve the image of Belarus, more than just one year is needed. Old scandals (unsuccessful investors to Belarus in the 1990s, like “Baltika” or “Ford”) are much better remembered than new success stories. No protection of investments, biased courts and the overall exotic totalitarian image of Belarus – the government has a huge scope of work to do. Positive changes must happen and be recognized by the international community.

Only adventurer-type investors would be ready to invest in Belarus now. For ignoring the risky image of Belarus they want high returns on their investments. Prospects of such returns are vague: Belarus doesn’t have natural resources that attract investors to Russia or Kazakhstan It is hardly possible to transform Belarus from the “Assembly Shop of the USSR”, as it was called in Soviet times due to Belarusian heavy industry supplying the rest of the USSR, to “a Small Assembly Shop Near the EU” because Belarus is not even a member of the WTO. Today, when Finnish wood processors sometimes find it easier to handle Russian wood in China, Belarus is not physically able to compete with Asian countries as an eventual location for foreign production facilities.

“To be proud of one’s export potential is past century,” a senior foreign delegates of the Belarusian Investment Forum said in a private conversation. Investors are more interested in domestic market and the effective domestic demand, on which Belarus is not very attractive, he added.

The government could sell state-owned companies, which it can’t manage anyway, for a lower price, but today the Western investors have enough cheap objects at home. This makes them less interested in Belarusian enterprises. There are many assets for sale in Belarus, but many of them lack a realistic valuation, the forum participant complained.

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Comments

I will use my opportunity to

I will use my opportunity to withdraw from a further conversation with a person so hopelessly lacking good manners and probably burdened with some problems unknown to me that might have led to this degree of inadequacy and negative attitude. Good luck, young lady and come back in a good mood :)

Darling, 1) It's no good to

Darling,

1) It's no good to freeze comments;

2) I'm older than you are;

3) What about that patronizing tone, are you still gender-biased?

4) When I talked about Bhopal, I meant more than 8,000 being dead and over 150,000 suffering from chronic diseases. You can read http://en.wikipedia.org/wiki/Bhopal_disaster#Equipment_and_safety_regula... to learn how good private investors managed the factory. I was not talking about Global Warming. You didn't get it.

5) Regarding the rest of your comment, I do not know what you are talking about. In your party do they teach you mind-reading? If yes, then they do it very badly. Or may be you are a bad student.

6) I'm seriously concern that people like you loaded with ideology but lacking some kind of scientific degree or adequate experience trouble oneself to give an expertise. But I guess it's a problem of producing texts: the one who writes more gets more space in Bielarusian on-line publications.

I wish you good luck.

And thank you.

The author is damn serious

The author is damn serious :)

The young lady just must have not read the entire article or seem to have a naive idea that somebody may think that adventurer-type speculative investors are better than strategic long term investors. It's an inevitable unpleasant thing: before long-term investors would come to the country, somebody has to be the pioneer, and this are most likely to be adventurers. This world is not perfect, even though it looks like that there is no Global Warming caused by human activity ;)

Market capitalism is per definition more effective than anything else. This has been proved on the example of anticapitalist USSR we've had enough of during most of the 20th century. Even Lukashenka has realized it at the end of the day, once Russian support went down drastically. It's a pity that too many people keep living in a dreamworld and believe that bureaucratic socialism may be given a second chance.

The framework witch led to the current crisis was created by the governments who allowed banks to have the opportunities but to be save from eventual risks. How can you blame the free market if the monetary system is controlled by a state central bank? What has "too big to fail" to do with free market economy?

"Today marks the twenty-fifth

"Today marks the twenty-fifth anniversary of one of the worst industrial disasters of the twentieth century. Shortly after midnight on December 3rd, 1984 in the city of Bhopal, India, tons of lethal gases leaked from a pesticide factory run by the US company Union Carbide. Between 8,000 to 10,000 people lost their lives within days. Thousands more died in the following years. Over 150,000 are still suffering chronic and debilitating illnesses".[http://www.democracynow.org/2009/12/3/25_years_after_bhopal_disaster_survivors]
This is just a reminder of what investor can do to a foreign country.

adventurer-type investors? Is the author serious? If Belarus needs investors, then they MUST be SOCIALLY and ENVIRONMENTALLY RESPONSIBLE.

Also, it appears strange, that in times when capitalism turned out to be ineffective for most of the people, but extremely profitable for a tiny group of the privileged, there are ignorant self-appointed "specialists", who still try to prove the opposite. Wake up, sir!

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