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Fairy Tales by PrakapovichThe authorities have lost their conscience completely. Yesterday Piotr Prakapovich, the chairman of the National Bank of Belarus again outraged Belarusians by the fantastic nature of the official statistic data. The country’s chief banker declared without a trace of embarrassment that in January-September of this year average monthly inflation reached 5.4%, or 0.6%.The question arises: perhaps Prakapovich gets all his food from a closed distribution network of the Soviet type, where all items in short supply were fabulously inexpensive? What other explanation could there be for not knowing that this year prices of milk and meat have grown by 40% (even Prime Minister Sidorski has admitted that). We are now paying 23.1% more for electricity and 23% more for gas. The utilities bills have risen 10.1%, public transport services 15.1%, taxi fares have grown20%, butter has become more expensive by 80%, and the price of vegetable oil has grown twice! Where does the National Bank’s chairman get these surreal figures? The well-known economist Leanid Zlotnikau answers this question for the Charter’97 press center: “There exists a certain method of price analysis, that results in such inflation rate figures. And there exists a specific calculation method. The Ministry of Statistics (MS) uses a consumer goods and services basket consisting of 350 items. However, the trick lies in what does this basket include. For instance, the Economy Ministry publishes a monthly digest “Consumer markets prices in Belarus”. According to this digest the price of beef was about BR 7,500, and, for instance, price of pork about BR 7,500 as well. As a consumer you go to shops or markets and will certainly never buy foodstuffs only at this price. Yet the Statistics Ministry’s consumer goods basket includes only such goods. They are so called socially significant goods. The state monitors their prices. This is why you will find such meat in every shop, because the state checks its availability and low price. Rising prices of many goods are not considered important. It is more important that stores have these cheap foods available.” This is how the economist reveals the secret of forming a consumer goods basket in Belarus. Thus, only very poor people can live according to Ministry of Statistics’s rules. “People, who consume low-fat milk from polythene bags, popular sorts of bread with more or less regulated prices, people who wear very inexpensive clothes. Although, if you wish to wear normal clothes, you won’t be able to find anything cheap anymore. Most people don’t buy lard with bones, skin and tendons instead of meat. THe MS counts only low-quality products, ” says Zlotnikau. The economist notes that there are “many tricks” in the Statistics Ministry’s calculations : “They contain many sophisticated tricks. There exists a certain methodology and they follow it. The MS officials admit that a retail price index is needed to reflect the real situation.
“The GDP index is working only for the market economy. It has this peculiarity: it should indicate how the population’s incomes are changing. However, we estimate the GDP using the productive method. That means if the goods remain unsold, it doesn’t matter. And then, is it a real GDP? For example, two cars crashed and then had to be repaired. The scope of the repairs will be included in the GDP. Re-laying now rusting pipes, that are frequently breaking down , or paving the whole city with expensive materials, - all this will also be included in the GDP. This is how we get the GDP: it includes things wasted by the state, by the population, by the enterprises on reconstruction and modernization.For instance, if we build many roads, palaces, and pave roads with expensive material, - it doesn’t mean that the portion consumed by the population is growing,” notes the expert . According to Zlotnikau, if the economy isn’t reformed, Belarusians will face further price hikes – two or three fold. “My only forecast is: prices will increase. About 10 years ago I wrote that due to protectionism, inefficient production, and rising prices of resources we consume, the food prices will also grow. This is an elementary forecast. When the food prices will be 2-3 times higher than in the neighboring countries, people will understand that we are preserving an inefficient economy. And if by now not everything has become twice as expensive, then soon it will be. This is what I have understood from the very beginning,” said the economist. Don’t tell us fairy tales, Mr. Prakapovich! Or you are consuming food exclusively from your beggars’ basket? Source: Charter 97 Press Center, Nov. 2, 2007 This article appeared in Belarusian Review, Vol. 19, No.4 --------------------------------------------- Copyright 2007 Belarusian Review All rights reserved. belarusianreview@hotmail.com
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