The Belarusian Case of Transition:Whither Financial Repression?

In: Korosteleva , J & Lawson , C 2009 ' The Belarusian Case of Transition : Whither Financial Repression? ' Bath Economics Research Working Papers , no. 4/09 , Department of Economics, University of Bath , Bath, U. K.

Abstract

The present paper examines the financial development of Belarus, with special emphasis on 1996-2002, when the financial sector was restrained by pervasive government controls. Belarus is of particular interest, as, despite no economic restructuring, annual growth has averaged seven per cent since 1997. It has been argued that monetary stimulation of investment activity through interest rate ceilings, directed credit and preferential loans revived growth. This article investigates whether a repressive financial policy, adopted by the authorities in the late 1990s, led to financial deepening and increased the share of savings allocated to investment.