Policy Documentation Center

Amended New Hungary Rural Development Programme - V5 - 2009

Investments in energy - the Macedonian case

EnlargeEU Newsletter                                                                                                                                                                                   Analytica, Thinking Laboratory  |  April 2009 
                                                                                                EnlargeEU Newsletter is also available at Analytica’s blog: www.analyticamk.blogspot.com 
Common ground 
No matter what it is called, (histories of religions, religious education, ethics, etc.) what the education authorities
should do is teach children from early age about tolerance, dialogue, understanding and appreciating differences. This
is especially important in multicultural societies for building a solid basis for peaceful coexistence of all different
religious groups. In order to avoid any negative impact special attention should be paid to the educators who should
be carefully selected from professionals in the field that would not attempt to manipulate the children by promoting
certain ideologies. However there are no guarantees and certain dangers will always exist since young children are
easily influenced and can be used in someone’s propaganda. Most importantly the responsible authorities should
always put the children’s rights and wellbeing first; children should always have the opportunity to familiarize
themselves with their religion as well as with other religions and the morals and ethics behind them.  
Religious Teaching in Schools – practices in Britain and France 
by Sonja Risteska, Residential Intern 
 
In every country, no matter of the continent or the stage of development the implementation i.e. introduction of religious teaching in schools has caused heated debates. There have 
always been two opposing sides regarding this issue, the church or any other religious institution with its believers, strongly lobbying for it on one side; and the people who believe 
the church and the state should be separated, and that the church should not be involved in the education process. No matter which side someone will take, there are pros and cons 
on both sides and most probably the debate will remain a never ending one. 
Practices in the EU 
The practises around the world dealing with religious teaching are of course different. Even in the European Union the ways it is sanctioned differ quite a lot from 
country to country. For example, two of the oldest democracies, the UK and France, have totally different laws and practices regarding this issue.  
In Britain on the other hand religious instruction and daily worship are statutory requirement in every school. This issue is dealt almost the same across the country 
with small varieties. For instance, in England schools have to teach religion but parents have the right to withdraw their children from all or part of the lessons, 
even in church schools. The school is not obliged to provide alternative lessons for those children. In Wales, schools are encouraged to teach children about 
"Christianity and the other principal religions in Great Britain" but there is no mention of secular philosophies. Scotland's national guidelines on religious and 
moral education (RME) say that, "while recognising the role of Christianity as the major religious tradition in Scotland, pupils should also be encouraged to 
develop understanding of and respect for people of other faiths and people who adopt a non-religious stance for living". What children are taught is not how to be 
religious but how to be religiously and racially tolerant and to have a better understanding and respect for the different communities that constitute the British 
society.  
In France the highly controversial law called, Law on secularity and conspicuous religious symbols in schools was adopted in 2004 as an amendment to the French Code 
of Education that expands principles founded in existing French law, especially the constitutional requirement of laïcité: the separation of state and religious 
activities. France’s past is filled with clashes and wars between different religious groups (Protestants, Catholics, Jews, etc.) and for that reason in 1905 a law was 
adopted which separates the church from the state. What French children study in schools today is some sort of transversal studies about the religions in general 
through other subjects such as history, geography and literature. This can certainly not be called religious teaching. Religious teaching can only be taught in private 
religious schools and it is not 
mandatory.  
 
Picture source: www.bbc.co.uk 
 
Sources: BBC News, Time magazine, Utrinski Vesnik, Wikipedia. 


English

Religious teaching in schools \u2013 practices in Britain and France

Moldova and EU in the framework of European Neighbourhood Policy. Implementation of the EU-Moldova Action Plan (February 2005 \u2013 January 2008)

-1-
Policy 
Documentation 
Center Feauture Article
The factors behind Barack Obama’s election as President 
A truly historic election took place in the United States on November 4, 2008: for the first time in the history of 
the country, a - partly - Afro-American politician was elected President. All but one of the previous forty-three 
presidents was WASP, that is, White, Anglo-Saxon and Protestant male (John F. Kennedy was Catholic). Barack 
Obama’s victory was almost a foregone conclusion, especially after the financial collapse in October. This 
year’s presidential - and Congressional - elections heavily favored the Democrats and almost from the begin-
ning of the election season, including the primary elections, majority opinion was held it is only the Democrats 
who can lose the election; the Republican candidate was forced to fight an uphill battle all the time. 
There was hardly any factor that was working for the benefit of John McCain, who - true to his character - put 
up a good fight and salvaged as much as could be from a losing position. However, ultimately, he had to ac-
knowledge his defeat. In a broader sense, the Republican Party, despite the serious setbacks on both fronts, 
might gain in the long run: serious thinking about the reinvention of the party can be started now instead 
of - say - 2012. 
Analysis:
The deck was heavily stacked in favor of the Democratic presidential candidate in 2008. The circumstances 
created a most favorable atmosphere for Barack Obama: e.g., about 80 percent of the people wanted ‘change’ 
- whatever they meant under that term. The Obama-team cleverly identified this wish as the overarching 
theme during both the primary campaign against the mighty Clinton-machinery and the national campaign 
against John McCain. 
The most important specific factors in Barack Obama’s victory are as follows:
Philosophical. Some of the conservative ideas that enabled the Republicans to dominate presidential politics 
in the past forty years (they have won seven out of the ten presidential elections since 1968) have lost their 
attraction to large segments of society. Foremost among them is the neoliberal economic policy; an ever 
greater portion of the American electorate believes that supply-side economy with its tax cuts favoring the 
people in the upper income tax brackets is basically unfair and they want more equality in the distribution of 
wealth. The conservative idea of deregulation was also badly hurt by the collapse of a number of emblematic 
financial institutions. 
Social. While both in 2000 and 2004 an approximately equal number of people identified themselves as either 
Democrat or Republican, now the former group enjoys a ten-point advantage over the latter. The change can 
be partly explained by demographic changes: racial minorities which are traditionally Democratic-leaning vot-
ers - Afro-Americans and Latinos in the first place - constitute now a larger electoral bloc than they did a few 
years ago. The Obama-team paid special attention to mobilizing the young, especially the first-time voters; 
the age group between 18-32 again historically is more prone to support the liberal Democratic candidates 
than the conservative Republicans. 
A much higher percentage of the Democratic voters were enthusiastic about their own candidate than the 
Republican ones. It was especially the religious conservatives (born-again Christians, Christian Zionists, etc.) 
who were distinctly reserved about John McCain. The nomination of Gov. Sarah Palin as vice-presidential can-
didate did shore up some support among them but only at the price of alienating another key voting bloc, the 
independents, from the Republican ticket. In addition, the Republican strategists overestimated the potential 
attraction of Gov. Palin to the disillusioned Hillary Clinton supporters. They overlooked the fact that the two 
women politicians represented diametrically opposite models for women. 
Policy issues. The questions most people were concerned about were traditionally the Democratic Party’s 
strength. Throughout the election season almost two-thirds of the voters identified economy as the single 
most important issue, and the Democrats were viewed as more competent handling economy than the Re-
-2-
publicans. The traditionally strong Republican issues, foremost among them defense and national security, 
did not play after all such a prominent role among the concerns of the voters as some Republican strategists 
originally wanted to believe. Ironically, one of the few successes of the Bush Administration, namely, the pre-
vention of another attack on the scale of those on September 11, 2001, may have played into the hands of 
the Democrats by removing this question from the limelight. Moreover, the Democrats have made inroads into 
the traditional Republican territory of ‘values’: the successful 2006 Congressional elections (engineered by Sen. 
Chuck Schumer and Rep. Rahm Emanuel) justified the Democratic strategy of running socially conservative, e. 
g., pro-life candidates in such heavily Republican states as, among others, Mississippi. 
Campaign strategies. The Obama-team was running almost a flawless campaign right from the beginning. 
They first outmaneuvered the Clintons, who were regarded to have assembled the most formidable politi-
cal machine in the past few years, then they continued their carefully conceived and level-headed campaign 
against the Republicans as well; e. g., when John McCain at first announced the suspension of his campaign 
and flew to Washington, D.C. at the beginning of the financial collapse, Barack Obama practically sat out the 
storm and did not waste his political capital on an unpopular issue. The Obama-team was waging a ‘war of 
attrition’ against John McCain. 
After changing his position of accepting federal funding and, therefore, a cap on campaign expenses, the Dem-
ocratic candidate collected as much money as no one before him. It enabled him to wage a 50-state campaign 
(designed by his chief campaign manager, David Axelrod) and to compete in previously safe Republican states 
as well even if his chances were meager. This strategy forced John McCain spent some his precious resources 
in states on which he originally did not intend to waste any money. At the same time, the Republican cam-
paign was anything but efficiently organized and smoothly run. The message, the strategy together with the 
personnel changed rather frequently and the inevitable infights in any campaign among the different advisers 
surfaced well before the election. 
Personality contest. The American presidential elections have become (degenerated) into a sort of ‘beauty con-
test’ recently. The candidates’ physical appearance and their ‘personal narrative’ are playing an ever increas-
ing role in the eyes of the voters whose majority, about three-fifth, are not very familiar with the candidates’ 
political programs. Barack Obama sold himself as a cross between Martin Luther King, Jr. and John F. Kennedy. 
He emphasized the validity of the ‘American Dream’ and the fact that with his election ‘the torch’ would be 
passing into the hands of a new, post-Vietnam generation. His core message was transcending party, racial, 
and other fault lines in the spirit of Dr. King. John McCain’s personal story was centered around his being a 
lonely (maverick) American hero, who takes on bureacracies, corrupt practices and who fights to a just cause 
till his last breath. 
He also emphasized his ability to transcend party politics with a little more justification than Barack Obama. He 
actually has a track record of working together with Democrats, such as Edward Kennedy, Russell Feingold or 
Joseph Liebermann, while Sen. Obama’s voting record, at least in 2007, was among the most partisan ones. 
Barack Obama talked about ‘judgment’, while John McCain about ‘experience’. A number of people thought 
that Sen. McCain had a little too much of the latter. More voters expressed their concern about his age than 
about Sen. Obama’s mixed racial backround. Regarding the racial issue, the so-called (partly mythical) Bradley-
effect did not play any significant role, primarily because those who had reservations about an Afro-American 
candidate would not have voted for a Democratic candidate anyway. 
Communication and media. The Obama-team was operating a highly sophisticated electoral machine by utiliz-
ing the latest technology, foremost among other things invading the blogosphere. They created a vast network 
of field offices all over the country with an unprecented number of volunteers and paid assistants. Because 
of the immmensively deep war chest, the Democrats were able to reach practically everyone they wanted to 
and, thus, they beat the Republicans in one of the most important fields, that of mobilization. The Republican 
strategists were, on one hand, a little bit old-fashioned in concentrating almost exclusively on e-mail massages, 
phone-banks and robo-calls and, on the other one, they had much less disposable financial resources and less 
enthusiatic volunteers than their Democratic counterparts.
-3-
The tone of the campaigns, at times, was very shrill and neither party was above negative campaigning (mud-
slinging), although the Republicans resorted to more personal attacks than the Democrats. The Democrats 
themselves, to a certain extent, can be blamed for it because they placed their presidential candidate’s per-
sonality in the center of their campaign - given Barack Obama’s thin resume this was almost a default posi-
tion. Much of the mainstream media fell in love with Barack Obama early and were biased against both Hillary 
Clinton (their former favorite) and John McCain (also a former favorite). However, their impact on the voters 
might be limited: the great majority of the American voters do not read The New York Times or watch, for 
instance, the NBC’s political shows. 
The Bush-factor. One of the heaviest weights John McCain had to carry with himself was George W. Bush’s 
eight-year long presidency. Pres. Bush had as low popularity rates as Richard M. Nixon ‘enjoyed’ during the 
Watergate scandal. The Bush Administration was seen by most of the people as arrogant and incompetent at 
the same time. Most of the people, with less justification than more, put all the blame on Pres. Bush for the 
recent economic troubles (some measures of the Clinton Administration also contributed to the irresponsible 
practices of certain financial institutions). A popular incumbent president can do a lot for the election of his 
own party’s candidate: Ronald Reagan’s popularity was a major factor in the election of George H. W. Bush in 
1988. Reagan’s popularity resulted in breaking a long pattern in American history: neither of the two major 
parties was able to hold on the presidency for more than two consecutive terms after 1945. 
Conclusion:
Barack Obama is not in an enviable position. He has raised such high hopes both at home and abroad that 
it will be impossible to fulfill the expectations. Even during the campaign, there were two Barack Obama’s 
concerning domestic politics: one liberal, on the left of the political spectrum, and one centrist. He won the 
primaries as Obama No. 1, and the presidential election as Obama No. 2. It will be impossible for him to sat-
isfy both voting blocs at the same time. He is likely to try to govern from the center; the question is whether 
such committed liberal Congressional leaders as Senate Majority Leader Harry Reid and House Speaker Nancy 
Pelosi, as well as such interest groups as the trade unions, will or will not push him toward the left.
The Democrats might fall into the trap of hubris: besides the White House, they are in majority in both Houses 
of Congress; moreover, Barack Obama will have the opportunity to nominate one or two liberal-minded U.S. 
Supreme Court judges. Thus, all three branches of the government will be controlled by the liberals. It would 
be a mistake for the Democratic Party to believe that it has received a mandate to push through a radical liberal 
agenda. As regards foreign affairs, Barack Obama has inherited a number of pressing issues from Iraq through 
Afghanistan and the emerging power centers to energy security. Once, his idol, John F. Kennedy collected ‘the 
best and the brightest’ around himself; and the U.S. plunged into an unwinnable war in Vietnam under their 
leadership and - at home - a conservative revival and backlash followed the large-scale social engineering at 
the end of the decade. 


The factors behind Barack Obama's election as President

Major changes in the labour market, January-December 2008 (Statistical reflections)

 
August 2009 1 
BELARUSIAN MONTHLY 
ECONOMIC REVIEW 
• A. Lukashenka took part in the Collective Security Treaty 
Organization summit. 
• Credit liabilities of enterprises has increased. 
• Stimulation of foreign investors’ activity. 
• Deficit of the consolidated budget. 
Politics: A. Lukashenka took part in the informal 
summit of the Collective Security Treaty Organization 
In July, Belarusian Minister of foreign affairs S.  Martynau met 
with the “EU 3” – Foreign Minister of Sweden C. Bildt and offi-
cials of the EU J. Solana and B. Ferrero-Waldner. The parties 
discussed the issues of the economic and political interaction 
and the prospects of easing visa regime for the Belarusian citi-
zens. This meeting is a witness of the further development of 
the relationships between the parties. However,  a more explicit 
trend is likely to be set at the turn of 2009-2010, when the pe-
riod of suspension of the EU sanctions against Belarusian offi-
cials will be over and the provision of funds for the realization of 
the projects within the ‘Eastern Partnership’ will be started. 
The informal summit of the Collective Security Treaty Organiza-
tion took place in Kyrgyzstan. A previous summit, during which 
the documents on the establishment of the Rapid Military Reac-
tion-Force were to be signed was ignored by the Belarusian 
delegation. However, in Kyrgyzstan despite Belarusian President 
took part in the summit these issues were not solved. Later on, 
the Secretary General of the CSTO N. Borduja stated that these 
“technical” problems will be arranged at the nearest official 
summit. However, currently unclear situation assumes that full-
fledged participation of Belarus in the Russian military initiatives 
is likely to be a stake in the bilateral political bargaining. 
Real sector: Credit liabilities has increased 
In the 1st half of 2009 real GDP grew by 0.3% yoy, having de-
celerated harshly in comparison to Jan-May (1.4% yoy), and in 
the 2nd quarter a decline by 0.4% yoy was recorded. In majority 
of main branches of the economy the growth rate in Jan-Jun 
was almost unchanged. Lower growth rates were mainly caused 
by growth deceleration in trade – retail commodity circulation in 
the 1st half grew by 2.6% yoy (by 4.6% yoy in Jan-May), while 
in June it dropped by 5.7% yoy. Thus the inertia in households’ 
behavior has declined substantially. 
Increase of credit liabilities of the enterprises including overdue 
ones is going to become a serious problem. Credit liabilities in 
the entire economy in Jan-May grew by 27.3% yoy. Its biggest 
growth was peculiar to the transport branch (by 78.5% yoy), 
and also to the range of service branches and agriculture. The 
share of the overdue credit liabilities achieved 15.3% (11.9% in 
Jan-May 2008), while in transport, industry and agriculture it 
was 22.4, 19.4 and 18.5% correspondingly (6.7, 13.1 and 17.9 
in Jan-May 2008). This cause an additional pressure on banks 
(the banks’ outstanding loans in Jan-May grew by 52.2% yoy) 
and thus leading to feeling them the lack of liquidity. 
Structural trends: Stimulation the investment activity 
In the 1st half of 2009 the majority of the industrial enterprises 
faced the sharp increase of the inventories. As of July, 1st the 
inventories achieved 94.6% of the monthly average output 
(more than USD 2.5 bn). In July A. Lukashenka assigned the 
government to undertake measures on inventories reduction. 
Among the government’s measures, the approval of the list of 
the domestically produced goods and correspondent  
 
 
 
No. 8 (83) 
August 2009 
 
 
 
 
 
 
 
 
Population: 9.67 m 
Industry / GDP: 28.1% 
Agriculture / GDP: 8.4% 
Investment / GDP: 27.9% 
Export destination: Russia 32%, EU 44% 
Import origin: Russia 60%, EU 22% 
 
 
 
 
 
 
 
 
 
 
Real GDP growth 
8.4
3.4
5.8
4.7 5
6.8
11.40
9.2
9.9
8.2
10.1
0.0
11.4
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
97 98 99 00 01 02 03 04 05 06 07 08 09
% yoy
Source: Ministry of Statistics and Analysis. Forecast 
for 2009: IPM Research Center. 
 
 
 
 
 
 
 
 
 
 
IPM Research Center 
 
German Economic Team 
in Belarus  
 
50Б Zakharova St., Minsk 220088, Belarus 
Tel./fax (+375 17) 210 0105 
E-mail: bmer@research.by 
Internet http://research.by/ 
 
 
© IPM Research Center, 2009 
 
Belarusian Monthly Economic Review №8 (83) 
 
 
 
August 2009 2 
producers that are eligible for the concessional consumer loans 
should be stressed. The problem of inventories alongside with 
the striving to hit the imports were likely motivations to the 
widely-discussed government’s Resolution that actually banned 
wholesale trade and intermediation. However, it was cancelled 
under the President’s requirement almost immediately. Fur-
thermore, the government introduced a new control indicator – 
the ratio between growth rates of the sales revenues and out-
put – which is aimed at reduction of the inventories through 
administrative measures. However, these measures are unlikely 
to provide the solution of the entire complex of problems re-
lated to the inventories, while both external and internal effec-
tive demand are definitely low and price-reduction methods of 
its stimulation has not been employed yet. 
In August, a decree directed at stimulation of the investment 
activity was signed. It substantially eases administrative proce-
dures and widens investors’ rights when realizing investment 
projects based on the investment agreement. Besides, the in-
vestors having concluded the agreement are freed from imports 
custom duties, VAT and some other levies and payments to the 
consolidated budget. This decree will make investment activity 
in Belarus more attractive. However, the advantages caused by 
it are more likely to be realized in a post-crisis period. 
Foreign trade: Belarusian Potash Company awarded a 
contract with India 
In Jan-May, the merchandise deficit amounted to USD 3.2 bn, 
having increased by 1.8 times yoy. The decline of exports (by 
48.0% yoy) was still bigger than those of imports (by 
33.3% yoy). Separately in May, these negative trends were 
almost unchanged. 
In May, the supply of a range of important goods was lower 
rather than in April. It was mainly consequent to the low de-
mand on the Belarusian investment and intermediary goods in 
Russia, and deficit with this country achieved USD 3.7 bn. The 
physical supply of truck-tractors decreased by 48% mom, 
trucks by 42% mom, spares for cars and tractors by 10% 
mom. Belarusian authorities reckon on reduction of the deficit 
in trade with Russia and weakening the budget pressure on 
providing subsidies to oil-traders due to the cancellation of the 
special export oil duty for Belarus used by Russia. The govern-
ment hopes to agree on it as the part of the establishment of 
the custom duty among Belarus, Kazakhstan and Russia. 
The physical supply of major raw goods increased in May – pot-
ash fertilizers by 25.3% mom, ferrous metals by 28.0% mom, 
and oil products by 8.5% mom. It led to the surplus in trade 
with non-CIS countries in May of USD 163 m, though in Feb-Apr 
there was a deficit. Further improvements are possible due to 
the supply of potash fertilizers, which was miserable in the 1st 
quarter because the contracts with India and China were over 
and the new contracts were being negotiated. In July, Belaru-
sian Potash Company achieved a price compromise with India 
at USD 460 per tone, while in 2008 it was USD 625 per tone. 
Since the share of supply to India in trade with the potash 
fertilizers is about 25% (in 2008), hence the boost in its supply 
will somehow facilitate to the dynamics of the Belarusian 
exports in comparison to the 1st half of 2009. 
Public finance: Deficit of the consolidated budget 
In Jan-May, consolidated revenues amounted to 46.8% of 
GDP, which is by 8.6 percentage points lower than in the pre-
vious year. Consolidated expenditures reduction was much 
lower – by 1.6 percentage points – and amounted to 46.9% 
of GDP. Hence, the consolidated deficit of 0.1% of GDP took 
place (while in Jan-May 2008 a surplus of 7.0% of GDP was 
 
GDP and Industrial Output 
-5
-2
1
4
7
10
13
Ja
n
.0
8
M
ar
.0
8
M
a
y.
0
8
Ju
l.
0
8
S
e
p
.0
8
N
o
v.
0
8
Ja
n
.0
9
M
ar
.0
9
M
a
y.
0
9
real GDP growth
real industrial output growth
% yoy cum.
Source: National Statistical Committee. 
 
 
 
 
 
 
 
 
 
 
Contribution to Industrial Output Growth 
Jan-Jun 2009 г. Growth, 
% yoy 
Contri-
bution 
to 
growth* 
Industry, total -3.6 -3.6 
Electric power -12.3 -0.7 
Fuel 12.4 2.9 
Ferrous metallurgy -2.4 -0.1 
Chemical and petrochemi-
cal industry 
32.4 3.9 
Machinery and metalwork-
ing 
-24.6 -5.1 
Logging, woodworking, 
pulp and paper 
-24.4 -0.7 
Building materials -6.7 -0.2 
Light -12.3 -0.4 
Food 2.3 0.3 
Other -27.2 -3.5 
Примечание. Вклад в прирост – в процентных пунк-
тах. 
Source: National Statistical Committee. 
 
 
 
 
 
 
 
 
 
 
 
 
Merchandise Trade 
1000
1500
2000
2500
3000
3500
4000
4500
Ja
n.
0
8
M
a
r.
0
8
M
a
y.
0
8
Ju
l.0
8
S
e
p
.0
8
N
ov
.0
8
Ja
n
.0
9
M
a
r.
0
9
M
a
y0
9
-900
-750
-600
-450
-300
-150
0
150
balance (right axis)
exports
imports
USD m
Source: National Statistical Committee. 
Belarusian Monthly Economic Review №8 (83) 
 
 
 
August 2009 3 
recorded), which is the first time since 2005. However, the 
Republican budget still performs a surplus of 1.4% of GDP, 
which meets the IMF requirements.  
Since July 1st the excises rates for tobacco and alcohol produc-
tion were raised within the range of 0-15% and the excises for 
condensed gas used as the fuel were introduced. This measure 
will somehow improve the consolidated revenues. However, its 
contribution is not so big – according to the government’s cal-
culation it will be BYR 98.0 bn – while the deficit might be 
growing (the current level is BYR 52.3 bn). 
Monetary policy: Dollarization is rising 
In June, net foreign assets of the monetary authorities declined 
by 18.2% mom (by USD 594.7 bn). At the background of the 
hard currency deficit, NBB refinanced banks actively, and 
hence, its claims on banks increased by 23.7% mom. Finally in 
June, base money grew by 0.3% yoy, while in annual terms it 
dropped by 21.5% yoy (by 13.3% yoy in April). 
NBB’s policy results in further gradual growth deceleration of 
providing loans to the real sector and more active banks’ bor-
rowings at the deposit market. In June, banks’ claims on the 
real sector grew by 3.2% mom, while in annual terms its 
growth decreased down to 49.6% yoy (52.2% yoy in May). 
Alongside banks raised interest rates on loans, which in turn 
determined maintaining high deposit interest rates. However, 
the dynamics of the households’ real income led to drop in the 
cash money demand, and lowering growth rates of households’ 
deposits. Despite NBB recommendations on cutting interest 
rates on foreign currency deposits, both legal entities’ and 
households’ deposits were growing mainly due to foreign cur-
rency ones. Thus the problem of the financial dollarisation is 
becoming more urgent for the Belarusian banking system. Ru-
ble money in June decreased by 0.4% mom, while in annual 
terms by 11.6% yoy (by 3.5% yoy in May). Broad money grew 
by 2.7% mom and 17.3% yoy (19.4% yoy in May). 
Consumer prices in June grew by 0.4% mom, while in annual 
terms the inflation amounted to 13.4% (13.6% in May). During 
Jun-Jul, Belarusian ruble depreciated to the NBB currency bas-
ket by 1.8%, being within the target corridor of the NBB. As of 
July, 31 its value to the currency basket amounted to BYR 
1007.8 and against US dollar 2849 USD/BYR. 
Banking sector: A ban for providing loans in foreign 
currency to households 
In July, NBB banned provision of loans in foreign currency to 
households. It is explained by the aims of de-dollarisation and 
reduction of banks’ credit risks. Due to this measure NBB will be 
able to achieve de-dollarisation from the assets side. Moreover, 
it will pressure banks to further reductions of interest rates on 
foreign currency deposits, which might be an additional impulse 
for the de-dollarisation of the banks’ liabilities. However, for the 
liabilities de-dollarisation a much broader complex of measures 
is required, directed at the increase in the trust to the national 
currency as the store of value, and to the elimination of the 
components of the real dollarization and payments dollarization. 
Absence of the complex approach may result in maintained dol-
larization of liabilities and increase in savings in cash foreign 
currency. The latter may cause a balance sheet effect in the 
banking sector, due to the mismatches between dominating 
currency in liabilities and assets and thus exposing banks to 
higher exchange rate risk. Thus, this measure might be effec-
tive only under a complex approach on de-dollarisation of the 
economy. From other view, it might be effective for restricting 
provision of loans to households, which may cause reduction of 
demand for consumer imports. 
Consolidated Budget 
30
40
50
60
70
80
Ja
n.
0
8
M
ar
.0
8
M
ay
.0
8
Ju
l.
0
8
S
e
p.
0
8
N
o
v.
0
8
Ja
n.
0
9
M
ar
.0
9
M
a
y0
9
-30
-20
-10
0
10
20
balance (right axis)
revenues
expenditures
% of GDP
Source: calculations based on the National Statistical 
Committee data. 
 
 
 
 
 
 
 
Monetary Base and СPI 
-25
-15
-5
5
15
25
35
45
55
65
Ja
n
.0
8
M
ar
.0
8
M
ay
.0
8
Ju
l.0
8
S
e
p
.0
8
N
o
v.
0
8
Ja
n
.0
9
M
a
r.
0
9
M
a
y.
0
9
6
8
10
12
14
16
18
CPI (right axis) monetary base
% yoy eop % yoy
 
Source: calculations based on the National Statistical 
Committee and the NBB data. 
 
 
 
 
 
 
 
Refinancing rate 
8
9
10
11
12
13
14
15
Ja
n
.0
8
M
ar
.0
8
M
ay
.0
8
Ju
l.
0
8
S
ep
.0
8
N
o
v.
0
8
Ja
n
.0
9
M
ar
.0
9
M
ay
.0
9
-6
-4
-2
0
2
4
real (right axis) nominal
% per annum
Source: calculations based on National Statistical 
Committee and the NBB data. 
 
Belarusian Monthly Economic Review №8 (83) 
 
 
 
August 2009 4 
Economic Trends  Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 
Apr. 
09 
May 
09 
Jun. 
09 
GDP growth % yoy 8.4 7.3 10.9 10.1 11.2 7.5 1.1 -0.4 -- -- -- 
GDP growth % yoy cum. 8.4 8.2 10.9 10.4 10.7 10.0 1.1 0.3 1.2 1.4 0.3 
Industrial Production % yoy cum. 8.2 8.5 14.7 13.0 13.1 10.8 -4.5 -3.6 -3.6 -3.4 -3.6 
Agricultural Production % yoy cum. 5.6 4.1 6.8 5.4 6.9 8.9 6.3 6.6 6.6 6.8 6.6 
CPI % yoy eop 9.0 12.1 13.2 16.0 16.3 13.3 15.5 13.4 14.7 13.6 13.4 
PPI % yoy eop 16.8 17.1 13.5 16.2 18.5 14.2 21.4 15.4 19.2 16.5 15.4 
Merchandise export (USD)* % yoy 18.5 44.4 69.2 56.0 44.9 -11.6 -48.8 -- -47.2 47.0 -- 
Merchandise import (USD)* % yoy 23.8 42.4 56.5 55.3 53.1 -1.5 -32.0 -- -35.3 -35.2 -- 
Merchandise trade balance 
(NBB data) 
USD m cum. -2304 -3858 -647 -2049 -3835 -6104 -1779 -3799 -2496 -3081 -3799 
Current account USD m cum. -1652 -2944 -433 -1411 -2920 -5049 -1866 -- -- -- -- 
Current account % GDP cum -5.1 -6.6 -3.6 -5.5 -6.6 -8.0 -18.2 -- -- -- -- 
International reserves USD m eop 2155 4182 4746 4618 4120 3061 3955 2650 3565 3238 2650 
Monetary base % yoy eop 25 38 59 54 48 12 -14.2 -21.5 -3.6 -13.3 -21.5 
Lending rate** % p.a. aop 12 12 11 10 11 14 17 17 17 16 17 
Exchange rate 
(official) 
USD aop 2147 2152 2148 2136 2114 2147 2772 2809 2829 2778 2820 
Exchange rate 
(official) 
EUR aop 2948 3115 3215 3339 3183 2827 3614 3822 3732 3782 3954 
* Growth rates in value terms (source: Ministry of Statistics and Analysis). 
** Nominal rate of commercial banks for new loans for legal entities in national currency. 
Sources: Ministry of Statistics and Analysis, NBB. 
 
Key Economic Indicators 2002 2003 2004 2005 2006 2007 2008 
Nominal GDP* BYR trn 26.613 36.565 49.991 65.067 79.231 97.165 128.828 
Nominal GDP** USD bn 14.5 17.7 23.1 30.2 36.9 45.2 60.3 
GDP Growth % yoy 5.0 7.0 11.4 9.4 9.9 8.6 10.0 
Industrial production % yoy 4.5 7.1 15.9 10.5 11.3 8.5 10.8 
Agricultural production % yoy 0.7 6.6 12.6 1.7 6.1 4.1 8.9 
CPI % yoy aop 42.6 28.4 18.1 10.3 7.0 8.4 14.8 
CPI % yoy eop 34.8 25.4 14.4 8.0 6.6 12.1 13.3 
PPI % yoy aop 41.4 37.5 24.1 12.1 8.3 16.2 15.6 
PPI % yoy eop 42.7 28.1 18.8 10.0 8.5 17.1 14.2 
Exports (gs, USD) % yoy 9.8 24.4 35.7 15.8 21.8 24.3 35.5 
Imports (gs, USD) % yoy 9.0 25.1 40.3 3.0 33.0 27.9 37.6 
Current account USD m –311 –424 –1206 510 –1512 -2944 -5049 
Current account % GDP –2.1 –2.4 –5.2 1.7 –4.1 -6.6 -8.0 
FDI (net) USD m 453 170 163 303 351 1770 2143 
International reserves USD m 457 474 770 1297 1383 4182 3467 
Fiscal balance % GDP –0.2 –1.6 0.0 –0.6 2.2 0.6 0.9 
Domestic public debt % GDP eop 5.4 5.5 5.7 5.8 6.5 6.4 6.7 
External debt (total) % GDP eop 27.0 23.7 21.4 17.9 18.6 28.4 24.6 
Monetary base % yoy eop 32 50 42 74 20 38 12 
Exchange rate (official)* USD aop 1784 2075 2160 2154 2145 2146 2136 
Exchange rate (official)* USD eop 1920 2156 2170 2152 2140 2150 2200 
Exchange rate (official)* EUR aop 1690 2353 2684 2681 2692 2937 3135 
Exchange rate (official)* EUR eop 1989 2695 2956 2550 2817 3167 3077 
* On January 1, 2000 the Belarusian ruble was denominated 1:1000. All figures for 1999 are given in ‘new’ Belarusian rubles. 
** For the period of 1999–2000, GDP in USD is calculated by using the market (unofficial) exchange rate (source: IPM Re-
search Center). 
Sources: National Statistical Comittee, Ministry of Finance, NBB, IPM Research Center. 
 
Notes: 
aop average of period gs goods and services 
avg average trn trillion 
bn Billion NBB National Bank of Belarus 
cum. cumulative p.a. per annum 
eop end of period yoy year-on-year 
m million ytd year-to-date 
 


Belarusian Monthly Economic Review, \u21168(83), August 2009

 
ICPS, GfK Ukraine– CONSUMER MOOD BOTTOMS OUT IN UKRAINE [23.03.2009] 1 
CONSUMER MOOD BOTTOMS OUT IN UKRAINE 
Press release Results of consumer confidence survey in Ukraine, a joint project 
between GfK Ukraine and the International Centre for Policy Studies 
23 March 2009 Contact: Maksym Boroda, Project manager 
www.icps.com.ua , www.gfk.ua  Tel. (044) 484-4400, e-mail: mboroda@icps.kiev.ua  
 
In February 2009, consumer confidence stopped the tailspin that it had been in since September 2008. 
During these five months, the Consumer Confidence Index (CCI) fell by more than half, from a nearly 
neutral rating of 96.0 in May 2008 to 41.8 in January 2009. Moreover, at the end of Winter 2009, the 
consumer mood appeared to have improved marginally, rising 0.5pp to 42.3. This shift in the consumer 
mood among Ukrainians was related to a slight stabilization in the economic situation, especially on the 
currency and labor markets. 
When this inching up of the CCI in February 2009 is looked at in the context of its main components, 
then it becomes clear that the rise was due to an improvement in economic expectations among 
consumers, despite their generally worse estimation of their current financial standing. Thus, the Index of 
Economic Expectations (IEE) grew 1.9pp to 44.7. At the same time, the Index of the Current Situation 
(ICS) slipped another 1.6pp to reach a new low of 38.8. The dynamic of CCI components shows that the 
current state of Ukraine’s consumers is still assessed extremely gloomily, although their economic 
expectations are already beginning to brighten. 
In effect, all the improvements in the consumer mood among Ukrainians seen at the end of Winter 2009 
have been spurred by growth in the index of expectations of changes in personal material standing (x2), 
which grew an impressive 9.9pp to 48.7. All other indices that form the CCI continued to go down in 
February. Interestingly, the most significant decline was in short-term economic expectations among 
Ukrainians. This index (x3) shrank a further 2.8pp to its absolute lowest, 29.9. This means that, while 
Ukrainians expect the overall economic situation to continue to get worse for the next year, they also 
expect some improvement in their personal material standing. 
Since the beginning of 2009, Ukraine has continued to experience a marginal improvement in 
expectations of both changes in unemployment and the pace of inflation. Thus, at the end of Winter 2009, 
the IECU slipped 2.1pp to 162.5. This could be in part because of the end of the wave of massive layoffs 
at Ukrainian enterprises and a relative stabilization of the labor market. The IIE inched up 0.2pp to 186.4, 
which was most likely tied to the continuing instability of the domestic currency. 
February 2009 also saw a shift in regional trends among Ukraine’s consumers. The CCI continued to fall 
in only two of the country’s six regions: the West and the South. Nevertheless, the largest improvement in 
the consumer mood, a rise of 15.7pp to 46.2, was actually in Kyiv. In January 2009, the capital had been 
one of the frontrunners for pessimism. A marginal increase in the CCI was seen in the other regions of 
Ukraine, including in the East, where consumers were also extremely pessimistic at the beginning of the 
year. 
 
Consumer Confidence Index in Ukraine 
 
Sources: GfK Ukraine, International Centre for Policy Studies 
 
  
40
50
60
70
80
90
100
110
120
03
’0
5
06
’0
5
09
’0
5
12
’0
5
02
’0
6
04
’0
6
06
’0
6
09
’0
6
10
’0
6
12
’0
6
02
’0
7
04
’0
7
06
’0
7
08
’0
7
10
’0
7
12
’0
7
02
’0
8
04
'0
8
06
'0
8
08
'0
8
10
'0
8
12
'0
8
01
'0
9
02
'0
9
CCI
ICS
IEE
 
ICPS, GfK Ukraine– CONSUMER MOOD BOTTOMS OUT IN UKRAINE [23.03.2009] 2 
Dynamic of Consumer Confidence Index in Ukraine 
Month, year Consumer Confidence Index 
(CCI) 
Index of Current Situation 
(ICS) 
Index of Economic 
Expectations (IEE) 
02’09 42.3 38.8 44.7 
01’09 41.8 40.4 42.8 
12’08 53.9 56.0 52.6 
10’08 69.3 72.6 67.2 
08’08 96.0 98.5 94.3 
06’08 90.2 88.7 91.3 
04’08 88.0 91.8 85.5 
02’08 97.9 101.2 95.7 
12’07 100.2 101.9 99.0 
10’07 95.0 96.6 93.9 
08’07 102.7 105.8 100.7 
06’07  96.9 102.8  93.0 
04’07  92.3 98.8  88.8 
02’07  92.2 92.4  92.1 
12’06  90.6  95.9  87.1 
10’06  91.2  96.6  87.5 
09’06  87.5  93.9  83.3 
06’06  84.9  92.2  80.0 
04’06  97.1  98.4  96.2 
02’06 103.7 103.5 103.8 
12’05 103.1 105.8 101.3 
09’05  95.5  95.5  95.5 
06’05 105.2 100.5 108.4 
03’05 107.3  92.9 117.0 
Sources: GfK Ukraine, International Centre for Policy Studies 
 
ICPS, GfK Ukraine– CONSUMER MOOD BOTTOMS OUT IN UKRAINE [23.03.2009] 3 
How the indices are calculated  
 
From January 2009 consumer confidence survey is conducted on a monthly basis. 
 
In Ukraine, the Consumer Confidence Index is determined through a random survey of domestic 
households. The poll involves 1,000 individuals aged 15–59, an age group that represents 61.3% of 
Ukraine’s population and the country’s most active consumers. A representative sample is selected by 
gender and age, also by type and size of settlement. The margin of error is 3.2%.  
To define the CCI, respondents are asked these questions:  
1. How has the financial standing of your family changed over the last six months?  
2. How do you think your family’s financial standing will change in the next six months?  
3. Looking at economic conditions in the country as a whole, do you think the next 12 months will be 
good or bad?  
4. Looking at the next five years, will they be good ones or bad ones for the country’s economy?  
5. In terms of large purchases for your home, do you think now is generally a good time or a bad time to 
make such purchases?  
Each of these questions is related to a corresponding index:  
 
• Index of Current Personal Financial Standing (x1);  
• Index of Expected Changes in Personal Financial Standing (x2);  
• Index of Expected Economic Conditions in the Country Over the Next Year (x3);  
• Index of Expected Economic Conditions in the Country Over the Next 5 Years (x4);  
• Index of Propensity to Consume (x5).  
 
Indices are constructed thus: the share of negative answers is deducted from the share of positive answers, 
and 100 is added to this difference in order to eliminate negative values. On the basis of these five 
indices, three aggregate indices are calculated:  
 
• Consumer Confidence Index (CCI) as the arithmetic average of indices x1–x5;  
• Index of the Current Situation (ICS) as the arithmetic average of indices x1 and x5;  
• Index of Economic Expectations (IEE) as the arithmetic average of indices x2, x3, and x4.  
 
Index values range from 0 to 200. The index equals 200 when all respondents positively assess the 
economic situation. It totals 100 when the shares of positive and negative assessments are equal. Indices 
of less than 100 indicate the prevalence of negative assessments.  
To determine the Index of Expected Changes in Unemployment (IECU) and the Index of Inflationary 
Expectations (IIE), the respondents are asked these two questions:  
1. Do you think that within next 12 months the number of unemployed (people who do not have job and 
are looking for work) will increase, will remain roughly the same, or will decrease?  
2. How do you think that prices for major consumer goods and services will change in the next 1–2 
months?  
The IECU and the IIE are calculated thus: the share of answers that indicate a decrease of 
unemployment/inflation is subtracted from the share of answers that indicate the growth of 
unemployment/inflation, and 100 is added to the difference to eliminate negative values. The values of 
indices can vary from 0 to 200. The index totals 200 when all residents expect an increase in 
unemployment/inflation.  
GfK Ukraine is a Ukrainian research company, offering a comprehensive range of survey services and 
market research in Ukraine, Moldova and Belarus. GfK Ukraine is a member of the worldwide GfK 
Group which is the No. 4 market research organization worldwide. The Group has 115 companies 
covering over 100 countries.  
The International Centre for Policy Studies is an independent research organisation whose mission is to introduce 
public policy concepts and procedures in Ukraine. ICPS focuses on key programs of importance for the reform 
efforts of the Ukrainian government 
 


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