Is foodstuffs’ price growth good for Belarusians?

While the independent press scares the population with the upcoming rise in foodstuffs prices, the state-run media explain that it will be advantageous to the country’s economy, including all of us.

The government is forced to solve a sum with two unknowns: how to bring dairy products back to the Belarusian groceries and to earn the hard currency, selling foodstuffs abroad at the same time.

All the indications are there that milk is repeating the fate of the cement which “abruptly” disappeared from Belarus. The cement reappeared back in the country as soon as it became more expensive. Now it is disappearing again to cement friendship with the mayors of St. Petersburg and Moscow…

“The milk price was raised five times this month alone,” writes Trud newspaper. “According to the government, this is not a limit…” In October, cheeses will become more expensive by 5 percent; pork and beef by 3 percent; poultry by 2.5 percent per month; eggs by not more than 1.5-2 percent monthly. However paradoxical it may sound, but this price growth is described as a vital necessity for all of us!

This is what the same state-owned newspapers and government officials are now saying quietly. Just recently, they maintained that the shortage of dairy products was just an “independent” media hoax.

But even today, officials continue to play on words. Mikhail Savelyeu, Belarus Agriculture Deputy Minister said in an interview with Interfax that “if there is a shortage of 1.5-percent fat milk or any other foodstuffs in Belarus’s groceries, we are not talking about a deficit. Rather, we are talking about the lack of assorted stock”.

The “lack of stock” will definitely hit our pockets hard. Statistics Ministry will be affected the worst, since it will have to calculate the inflation. Foodstuffs account for almost a half of an ordinary Belarusian’s consumption basket. Under the government’s targets in 2007, inflation is restricted to 6-8 percent, 5.4 percent out of which have already been “eaten” over nine months. Who knew that the last three months would be the “most expensive”?!

When you read the state-owned newspapers, you get a different picture. Presidential mouthpiece Sovietskaya Belorussiya explains that at the end of the day the price growth will be “advantageous to all of us” and that “peasants are waiting for it with hope”. It is noteworthy that peasants are the lowest-income category in Belarus.

“To all appearances, prices need to be gradually equaled with the Russian prices. Peasants are waiting for this with hope. What they are currently paid for their produce (even taking into account the state’s subsidies) is still far away from the real market cost. It is interesting that the introduction of adequate purchasing prices will spare the government from subsidizing meat and milk producers. The national budget will save trillions of rubles. The rural economy will finally get on a market path. The most important thing is that the products with a high additional value, not the raw materials, will be exported”.

It appears that Belarus is unwillingly moving towards a market economy where it has been pushed to for 13 years. For this purpose, I personally agree to refuse from milk for one month. Yet, I still feel confused, because the government is looking for its “third way” even here.

“The government will develop a pricing policy, taking into account the economic situation at the markets of neighboring countries. The first decision which comes on mind is to raise the prices up to the level in Russia or Ukraine. But this is a complex decision, because the problems with inflation and population’s income arise immediately,” Belarus vice premier Andrei Kabyakou told Interfax.

Apart from the high inflation risks, the minister is also facing a negative foreign trade balance. Instead of being pleased with the success of Belarusian dairies at foreign markets, he has to fight it as an evil.

Finally, it is hard to grasp why the Ukrainian cheeses are sold at Belarusian costs in our groceries…