Even if they call on IMF assistance, Mr Lukashenka and his close advisors will remain suspicious of Western-style economic policy and firm in their belief that only direct and pervasive state control will ensure continued economic growth. Despite emergency measures needed to avoid hyperinflation, such as reining in credit, this prevailing doctrine of the Lukashenka regime will continue. Considerable restrictions on currency exchange will remain. As long as the government believes that they will help to avoid hyperinflation, price controls and rationing of consumer goods will intensify. Mr Lukashenka will also continue easy credit as long as he can, aided by the National Bank of Belarus (NBB, the central bank). The NBB's new governor, Piotr Prakapovich, has shown no hesitation in further expanding the money supply, already issuing over 20trn roubles in his first months in office in an effort to keep the economy growing at an impressive rate. With this reckless monetary and credit policy destined to continue at least during the first few months of 1999, the Belarusian monetary and banking system will become increasingly strained.
-- while the black market will thrive
Price controls, consumer goods rationing and artificial currency-exchange rates will provide fertile ground for the country's already thriving black market. Many estimates suggest that less than 20% of foreign currency circulating in Belarus is traded at the official rates. The influence of the black market can only increase, with enterprises and individuals continuing to purchase foreign currency at black-market rates -- the illegality of such transactions notwithstanding. The US dollar will remain the principal means of payment for foreign goods on the black market, while demand for foreign currency will grow further, owing to the withdrawal of the Belarusian rouble from all foreign transactions. The magnitude of the black market will make the enforcement of government restrictions necessarily selective. With almost all economic en- tities in Belarus liable to charges of illegal economic activities, because of the regime's steady criminalisation of even purely market transactions, enterprises are unlikely to resist any demands by government officials for fear of criminal charges. Thus, paradoxically, the omnipresence of the black market will provide the authorities with greater leverage in selectively enforcing their economic policy. At the same time, a situation wherein enterprises are unlikely to resort to legal protection will accelerate the corruption of government officials.