Belarusian President Alexander Lukashenko said he is ready to close the country's borders if the poor economic situation in the country descends into full-scale crisis.
The Belarusian economy has come under significant pressure this year from increased tariffs on Russian oil, a budget deficit and high public spending ahead of the December 2010 presidential elections.
“If there is an [economic] catastrophe, we will close our borders and only import what we need,” Lukashenko said at a news conference in Minsk. “We have enough to buy food and clothes.”
Despite the warning, he said Belarus does not face an economic catastrophe.
“We will emerge from this situation in several months,” Lukashenko said. “There is no crisis in this country; it’s all just frenzy and panic.”
International demand for Belarusian products began falling in 2009. Belarus's economy had survived for many years thanks to Russia's low tariffs for oil supplies to Belarusian refineries, but Russia introduced a 100 percent tariff on most oil and oil product exports in 2010. That tariff, coupled with wage increases ahead of last year's presidential elections, triggered a financial crisis in Belarus.
The Belarusian ruble has come under severe pressure in the first five months of the year from a large trade deficit, generous wage increases and loans granted by the government ahead of the December 2010 presidential elections, which spurred strong demand for foreign currency.
In spring, the country's authorities devaluated the national currency by 36 percent, froze prices on some staple foods and introduced fuel rationing to keep the lid on the deepening crisis.