Country Report Belarus December 1998 Main report

Economic policy: Lukashenka curbs priv exp'ts of fdstuffs to Russ --

Mr Lukashenka has assured Russians that Belarus will provide all possible help to its neighbour, and yet has clamped down on all exports to Russia not controlled by his government through a recent presidential decree that criminalises private exports of consumer goods. The decree has quickly become redundant, however, as the relative depreciation of the Russian rouble and rising consumer prices in Belarus have eliminated the profitability of small-scale trade. However, the decree is indicative of Mr Lukashenka's economic policy, including his distrust of the market; ignorance of its mechanisms; and a belief in the efficacy of direct state interference.

-- and intensifies price controls and rationing

Mr Lukashenka has sought to control the country's rising inflation rate by prohibiting retail mark-ups of more than 15% and mounting a campaign against "unjustified" price increases. The government's pricing administration, an agency whose basic function of price control has not changed since the Soviet era, ensures that both private and state- controlled entities observe these regulations. Following the presidential decree on "urgent measures to protect the consumer market" issued on September 4th, rationing of basic food products and other consumer goods has proliferated. Buying and selling in excess of the centrally established quotas has been declared a criminal offence, while authorities in Minsk have threatened to revoke the licences of private retailers who exceed their selling quotas. Although local authorities in Belarus have often resorted to rationing food and other consumer items, this rationing has only recently become officially sanctioned and increasingly pervasive. Promoting these measures as perfectly normal, Mr Lukashenka has declared food rationing as something to which authorities and citizens should all be accustomed.

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