Government Policy

Belarus Table of Contents

Although the government's stated goals during the first years of independence included promoting a market economy, normalizing monetary circulation, and lowering the country's dependence on monopoly suppliers, these goals were not met. Inflation and depreciation in the exchange rate stemmed from the government's compensation for decreased living standards and lower industrial output through subsidies (rather than changes in the country's economic structure and adoption of market reforms).

The government's economic timidity was prompted not only by the wish to maintain the status quo but also by a fear of the social consequences. Years earlier, calls for political action did not stir the populace, but the populace reacted dramatically to sudden price increases. In April 1991, demonstrations occurred in Minsk, Orsha, and other cities, frightening the government into wage concessions, a slowdown of reforms, and promises not to neglect the "social protection net" so as to avoid a repeat of such economically motivated unrest.

As of mid-1995, the government continued to look for easy solutions to its economic problems. It neglected privatization and price liberalization, instead continuing to increase minimum wages to offset minor price increases and to prop up outdated factories that piled up unwanted inventories.

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Source: U.S. Library of Congress