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BISR analyst: the way of our economic model is not forced, but sustainable

"As the President said in his address, we need to focus not on indices and statistical maneuvers, but on real incomes of the population and their purchasing power. The Head of State noted that wealth is, first of all, investment in fixed assets. Without spending on fixed capital, intangible and financial assets, the future efficiency of activities is impossible. In this sense, modernization certainly affected the level of well-being in the short term. But in the future, and even today, Belarusians can feel its effect as an increases in real salaries", Vitaly Demirov believes.

By his words, the main thing is to avoid negative economic impacts from disinformation and statistical manipulations aimed at inciting economic pessimism in the minds of Belarusians, and sowing doubts about Belarusian economic model.

"The network often disseminates many videos about high salaries in dollar terms in a number of Western countries. But at the same time, nothing is said about the purchasing power parity of this money in concrete economies of these countries, about prices for basic services for the population", the expert stressed.

For example, the average electricity bill in the United States is about $100 per month and may reach about $170 in some states (Connecticut and Massachusetts). A package that includes home phone, internet and TV costs on average $150 per month. Depending on the number of TV channels and the Internet speed, prices can be lower or significantly higher. In Belarus, for $1 you can buy goods about three times more than in the United States. At the same time, in terms of purchasing power parity, the Belarusian GDP, considering estimations of various international organizations (including the World Bank and the IMF), is far from the cherished $100 billion which we constantly strive for at par, but all $189 billion.

"Opposition analysts want in every way to emphasize that we are a poor country, and only those closest to the President and top officials thrive. It is not difficult to dispel this myth", Vitaly Demirov noted.

At the same time, he refers to the World Bank Country Manager for Belarus Alex Kremer, who believes that Belarus has been successful in fighting poverty. If in 1999 half of the population lived on an income below the subsistence level, in the last 10 years, according to National Statistical Committee (Belstat), only one out of 20 Belarusians lives like this. "Poverty is usually measured as the nominal salary recalculated at the market rate of the national currency. This may result in average Belarusian salary of $510 in 2020 being significantly behind, for example, the Polish salary of $2082. A truer picture appears when assessing the purchasing power parity, since prices in Belarus are also lower. And if we add the deduction of income taxes which are higher in Poland due to progressive scale, then the actual disposable salary of Belarusian citizens will be only one quarter behind the Polish one. In addition, it is important to consider the level of social inequality. As per official data, the income of the 10% of the wealthiest Belarusian citizens is 6 times higher than the income of the 10% of the poorest. Just to compare: in Poland or Sweden - 7.3 times, in Latvia and Lithuania - 11 times", the analyst explained.

According to him, it is in developed countries that the property stratification has peaked over their observed economic history. "Moreover, the infamous social mobility that they were so proud of, is also disappearing. The way of our economic model is not forced, but sustainable, as evidenced by our high positions in the Human Development Index. We do not live on debt and at the expense of future generations. This means that by eliminating the negative economic expectations factor, we can come to high competitiveness in the global economy", Vitaly Demirov concluded.