Interview with Pavel Latushka on financial pressure on the regime
1 March 2021 | ZUBR
On European investment funds and the economy of Belarus
A few words about the economic situation in our country. Belarus is in a state of collapse – be it legal collapse or foreign or domestic policy. Economic default is coming. Belarus’s debt obligations exceed eighteen billion USD and are growing. The regime is creating a situation where it takes on new debt to cover its previous debt. The country’s business climate is deteriorating due first and foremost to the authorities’ policies. Public announcements of company closures by personal order of the illegitimate leader lead to a deterioration of the country’s business image, with the authorities destroying our country’s economy’s potential growth points with their own hands.
Investment attractiveness is declining, international investments are falling, and, unfortunately, forecasts do not show investors coming to Belarus. The government is unable to offer a clear reform algorithm allowing for a way out of this situation.
We must also admit (and propaganda often speaks of this) that the economic sanctions by the European Union, the United States, and other countries that didn’t accept the election results have yet to take effect. The primary cause of the looming economic disaster is the authorities’ inability to build a mechanism for economic development.
There are no other sources of investment that we could rely on. The Russian Federation is not ready to constantly invest unlimited amounts of money into our country’s economy as it did before.
I’m not bluffing, we see the tactic the Russian leadership is pursuing in relation to Lukashenko. One of the instruments that the authorities used to cover foreign debt was European bonds or it issued bonds, which were then distributed among investment funds in countries across the world. Last year this happened right at the peak of arrests of the regime’s political rivals. A number of European banks issued bonds at that point. Europeans have a term, socially responsible investment, which means that it is impossible to earn money when crimes are committed and human rights are violated in another country. Therefore, we have serious grounds to believe that the funds that the regime received by issuing bonds in the amount of one billion US dollars were spent on creating a suppression system.
I would like to respond to the Minister of Finance who said “why would anyone say no to Eurobonds paying a very high 7% annual interest rate” – this is an explanation that would work only for those with not even a very basic understanding of the concept. Money is usually borrowed to fill holes in the budget and to create conditions for development. The situation of recent years is evidence of a continuously falling GDP. Consequently, the funds the Ministry of Finance borrows on the foreign markets are used to cover these debts and so there is no opportunity for growth. These obligations pay a 7% annual interest rate, which is much higher than in the United States but how can this interest be paid if the economy is shrinking?
How the sale or return of Eurobonds will affect the regime
It will certainly hit it hard because the end of 2020 estimates show gold and foreign currency reserves at $7 billion USD, while they totaled $ 5 billion in 2011. We also remember 2011, when there was a threefold devaluation. We can predict that the situation will continue to develop this way if the owners of Eurobonds start selling them and presenting them for payment to the government of Belarus, which in turn could lead to serious pressure on the Belarusian foreign exchange market. All of this will lead to inflation and the weakening of the national currency. What happens in any country in this situation – and Belarus is no exception – is that people start getting rid of the national currency and acquiring foreign currency in order to preserve their savings.
The government is currently making the same mistake by fixing the prices of goods, which can lead to a deficit and to issues with the supply of these goods to the domestic market.
Is there any importer that would supply goods at a loss when the national currency is weakening? Consequently, if the government does not give up this strategy, it will lead to empty shelves in the long term. There is only one way out. The longer Lukashenko stays in power, the more dire our country’s economic issues will become. Nobody will loan to him anymore.
Cooperation with acting officials and the evolution of this project
We can confirm that we have already received 1,300 requests from government officials. Many officials are aware of the real state of affairs. The same thing is happening with security forces, when police officers whisper to those they are detaining: “Tell me, what way out do I have? What can I do? I don’t want to be involved in this.” Officials, on the other hand, have tarnished their reputations to a lesser extent, in the eyes of the law. I am convinced that there will be more of them. It is important to note that we guarantee the security and confidentiality of information.
About Kupalauski Theater and Paliakova’s comments
I will try to share my view. The Kupalauski Theater is the gold fund of the nation. It is important to understand that a theater is not just a concrete and steel building. First and foremost, a theater is its actors, its creative team. Actors, recipients of the status of Honored and People’s Artists of Belarus left the theater, and it was their personal decision. Saying about them that there was somebody who made the actors follow them and wiped their feet on them is an abomination. Saying so is another way of trample all over their feelings and their pain. Nobody was pushing people, it was the decision of the creative team. The Kupalauski Theater made the responsible step of saying that it was with the people.
By the way, I worked as the director of the Kupalauski Theater for a year and a half, and before that I was Minister of Culture, and I didn’t really see this family going to see any plays at the theater. In order to make judgments, you need to attend theater.
It will be interesting to see what Vera Paliakova says about the Free Theater, which has essentially ceased to exist or about the new drama theater half of whose troupe has left or about the Bolshoi Opera and Ballet Theater and the dismissed artists or about the Belarusian State Philharmonic Society, whose artists were arrested in the middle of a rehearsal… The list can go on and on.
Musicians, artists, so many of them experienced prison, they too were humiliated. How is it possible not to understand what is good and what is evil, what is truth and what is a lie? We have not heard anything about the people who were beaten, tortured and killed from this family.
If Mr. Makei believes that killing people is ok in our country and that no criminal investigations will follow, that rape is ok and that no criminal investigations will follow, that it is ok to torture thousands of Belarusian citizens – what is there to discuss with people like this? The hypocrisy is immeasurable. Karatkevich wrote a poem a while ago:
Your past lovers and past life can get lost in the oblivion,
But you must never close your ears, mouth, and eyes
To loving the Land you live in
Pay no mind if you hear vicious lies.
For the only thing we owe her in a million
Till the day we permanently die
Is to speak the Truth very clearly,
Not one lie,
Not even a tiny lie.
Makei proposed the slogan “I love Belarus.” Those are the words of Kastus Kalinouski. Can Belarusians be expected to love Makei? Is telling the truth a betrayal? No. Betrayal is concealing the truth, not talking about the people who were killed, not talking about the violence, about the journalists, about the young girls who are put in prison.