Belarus' Anti-Crisis Management: Success Story of Delayed Recession?

Abstract

The response of Belarus to the global economic crisis was shaped by a number of distinctive features of the Belarusian economy and of the economic policies implemented before the crisis. The specifics of anti-crisis management in Belarus resulted in a distribution of output losses for a number of subsequent periods and delayed recession. The scenario of stabilisation policies in Belarus can therefore be regarded as ineffective. The core reasons for this are an inappropriate choice of policy instruments and delayed exit from stabilisation policy. It is argued that this policy mix has long-term implications, including worsening economic growth prospects.

Notes

I would like to express my gratitude to M. Myant, J. Drahokoupil, K. Haiduk and the anonymous referees for their valuable comments and suggestions.

¹ The problem of dollarisation has been deeply-rooted in Belarus from the mid-1990s. There was a declining trend for financial dollarisation in the 2002–2006 period. Later it stabilised and the fluctuations in 2007–2008 were limited, but during the financial crisis, and especially after the devaluation of the national currency at the beginning of 2009, it jumped and the deposit dollarisation ratio exceeded 50%.