{"id":122610,"date":"2025-01-21T11:54:07","date_gmt":"2025-01-21T08:54:07","guid":{"rendered":"https:\/\/pozirk.online\/en\/longreads\/122610\/"},"modified":"2025-01-21T11:54:10","modified_gmt":"2025-01-21T08:54:10","slug":"belarus-faces-economic-dilemma-amid-price-control-push","status":"publish","type":"longreads","link":"https:\/\/pozirk.online\/en\/longreads\/122610\/","title":{"rendered":"Belarus faces economic dilemma amid price control push"},"content":{"rendered":"\n

As the January 21-26 presidential election approaches, Belarusian authorities are seeking measures that might resonate with voters. One such move, potentially tied to the election, is Alaksandar \u0141uka\u0161enka’s call for the government to review its price control policy.<\/strong><\/p>\n\n\n\n

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\n (Daryna Mitrakova \/ nesvizh-news.by)<\/span>\n <\/div>\n <\/figcaption>\n<\/figure>\n\n\n\n

Belarus’ economic struggles<\/h3>\n\n\n\n

Government-controlled industries are grappling to stay afloat as higher prices in neighboring countries encourage businesses to relocate their production facilities abroad, where profits are more favorable. This situation threatens to lead to shortages of goods and empty shelves in Belarusian stores.<\/p>\n\n\n\n

Recent statements by Belarusian officials advocating for a \u201cfair and self-adjusting\u201d price system have yet to materialize.<\/p>\n\n\n\n

On Orthodox Christmas, January 7, \u0141uka\u0161enka announced that he would abandon price controls in favor of a market economy. A week later, he instructed Artur Karpovi\u010d, the new trade minister, to study the Soviet experience in ensuring a rich variety of goods on store shelves.<\/p>\n\n\n\n

In a televised interview, Karpovi\u010d praised the Soviet trade system for its abundance of domestically produced goods, stable prices across regions and friendly sales personnel. However, most people who remember the Soviet era associate it with goods shortages, ration cards, queues, clientelism, and rudeness. The prospect of returning to that past is unlikely to excite voters.<\/p>\n\n\n\n

\u201cFair\u201d pricing system threatens business growth<\/h3>\n\n\n\n

Although his interpretation of fairness is selective, \u0141uka\u0161enka promotes the idea of a \u201cfair\u201d pricing system. The government controls prices, hoping that the system will eventually become independent and self-regulating.<\/p>\n\n\n\n

Officials claim they want to guide businesses, including the private sector, without dictating prices. However, many businesses view such an approach to price fairness as unfair.<\/p>\n\n\n\n

New price control ideas<\/h3>\n\n\n\n

Officials argue that price controls should make the cost structure and mark-ups as transparent as possible at every stage, from production to retail. For imports, transparency should be ensured from the moment goods cross the border until they reach store shelves.<\/p>\n\n\n\n

According to officials, the pricing system should be based on projected inflation and guarantee a \u201creasonable\u201d level of profitability for manufacturers and distributors. However, the \u201creasonable\u201d rate of return will be determined by the government.<\/p>\n\n\n\n

Officials aim to revive Soviet-era economic controls<\/h3>\n\n\n\n

The fair-pricing rhetoric reflects Belarusian officials\u2019 desire to recreate the spirit of the Soviet centrally-planned economy. They hope that the system will operate seamlessly, with sufficient automation to calculate the correct prices and balance the market.<\/p>\n\n\n\n

Officials appear confident that they can make this dream a reality\u2014at least in principle\u2014in the age of information technology.<\/p>\n\n\n\n

This system aims to establish a scale of \u201creasonable profitability\u201d for each stage of production and trade, potentially becoming a unique Belarusian contribution to the market economy. However, the government\u2019s invisible hand could become quite visible, effectively taking on the familiar features of state price controls.<\/p>\n\n\n\n

Fairness is an issue<\/h3>\n\n\n\n

The main problem with this approach is that everyone, including officials, must adhere to the rules. Creating a truly fair and lawful system in a country where laws are sometimes obstacles is nearly impossible. The Belarusian bureaucracy is not accustomed to working under fair and equal rules, even when those rules are self-imposed.<\/p>\n\n\n\n

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