Backlash to challenge of time
How can we best drive forward the Belarusian economy? Perhaps, no other economic issue has been so widely discussed of late in Belarus as that of modernisation. The state, society and private sector understand that the future of the country depends on our success in solving this task. What is meant by modernisation and how does it relate to privatisation and other processes in Belarus? What resources are required and what is the international context? Expert’s opinion
Yury Shevtsov, the Head of the European Integration Problems Centre:
In my opinion, modernisation is an economic transition from one mode to another. If the economy is based on agriculture, industrialisation would bring modernisation. The Belarusian economy faces the task of modernisation: transition from industrial (based on mass production assembly lines) to scientific (where assembly lines are more automated and products are more high-tech). The new High-Tech Park is an example of modernisation in the Belarusian economy.
Modernisation does not rely on a change of ownership; rather, it’s about changing the technological mode. It matters not who owns enterprises. Modernisation is thought to accompany privatisation but historical experience shows that the most ground breaking technological solutions have been made under the direct patronage of the state, within major government programmes — such as building a nuclear power plant.
As part of the modernisation process, industrial development tends to go hand in hand with a developed service sector. Belarus, being a moderately developed European country, is creating a post-industrial society, focusing on technologies and services; of course, you need a well-educated workforce to achieve this. Belarusian modernisation should be accompanied by a growing service sector.
The solutions being implemented in today’s Belarusian economy are compliant with the path to modernisation, despite harsh criticism of the Government by the President recently; he is eager to see enterprise managers show more discipline and energy.
We shouldn’t expect any major changes regarding modernisation and economic development, since we’ve inherited Soviet industry and economics. We were part of a vast Soviet complex but now rely on development by a small state. Many enterprises, and entire cities, were built in Belarus to supply the Soviet Union: a vast country. Regardless of Customs Union membership (with Russia) Belarus is a small nation, unable to quickly manage a vast array of assets created for other purposes. That Belarus has managed to keep its industry running is surprising: a unique situation in Eastern Europe. We actually lack enough resources for the huge enterprises we’ve inherited.
Breakthrough programmes are possible, such as at the High-Tech Park and BelAZ. A new Chinese-Belarusian industrial park is planned and who knows what else may arise through the integration process. However, we should understand that the mass creation of screwdriver plants in Russia does not lead to deeper co-operation; rather, it rapidly creates competitors for Belarusian companies on the Russian market. Foreign companies involved in these schemes may have very different motivations: from capturing a long-term market to the simple destruction of competitors through short-term dumping. Nevertheless, we shouldn’t exaggerate this danger. Belarus has learned to keep its production going in the face of fierce competition.