Correct and economically calculated step

State import substitution programme helps solve various strategic economic issues

By Vyacheslav Belyaev

Until recently, MAZ and MTZ imported their ABS systems for trucks, alongside their software to operate tractors. Moreover, malting barley and oil-seed rape were also bought in from abroad. However, Belarus has not yet lost its status as ‘an assembly workshop’ and ‘an agrarian country’; the production and growing of import analogues is the correct path, being an economically feasible measure.

Not long ago, the Belarusian National Academy of Sciences’ Presidium held an extended session for representatives of ministries and agencies, focusing on further action. Those present — including Prime Minister Mikhail Myasnikovich — debated which tasks should be solved by our manufacturers and agrarians. “Import substitution in Belarus is gradually shifting from being an economic issue to being a political issue,” believes Mr. Myasnikovich. “It impacts on other areas — such as the sustainability of the national currency, our balance of payments and other economic developmental issues.”

The PM is convinced that the country could halve its import dependence, proceeding from developments by our ministries, agencies and enterprises. However, while he believes that import substitution should not be ‘all-inclusive’, he feels that a wisely built chain would improve our independence and economic position.

Mr. Myasnikovich explains that the Government is not aiming for complete import substitution, as this might influence the competitiveness of our domestic produce. Rather, he wishes to see imports substituted at the highest level, with economic feasibility guiding the plan of action. Manufactures shall then be able to satisfy the domestic market while also bringing in export revenue.

Imported raw materials and components account for about a third of the total volume of domestic produce. According to Mr. Myasnikovich, 68 percent of GDP is produced using imported materials. From January-August, 2011, Belarus managed to slightly improve its foreign trade balance. For the first time in many years, its exports of goods and services outstripped imports by 11 percent. In fact, in January 2011, Belarus’ negative foreign trade balance comprised 17 percent of GDP; it now stands at 8 percent. As the PM notes, many components have contributed to this change — including a new stance on monetary policy.

Scientists also make their contribution into the import substitution programme. This year, the National Academy of Sciences of Belarus plans to raise its exports of goods and services 1.5-fold (on last year’s figures). According to the Chairman of its Presidium, Anatoly Rusetsky, this should generate around $35m. From 2006-2010, 202 import substitution products were created within the programme, generating sales worth almost $170m. Every budget Rouble spent on the development of the sci-tech sphere generated almost 20 Roubles (from the sale of import substitution goods). As one example, Belarusian farmers’ use of their own varieties and technologies for malting barley growing have cut imports of ‘malting’ grain from 77,000 tonnes (in 2008) to 400,000 tonnes in 2010 — saving $26.4m. Meanwhile, the NAS Institute of Soil Science and Agrochemistry has helped the Gomel Chemical Plant produce over 221,000 tonnes of compound fertilisers (worth over $50m). Over the last five years, production volumes of new industrial products have risen, to reach $2.5bn.

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