Efficiency of high-tech projects defined by concrete profits

President shown new facility to assemble and test space engineering

By Vladimir Vasiliev

Peleng JSC’s production programme was the focus of Alexander Lukashenko’s visit. This followed his earlier inspection in July 2010, when talks dealt with the development of space and defence technologies. The topic continues to be one of importance.

The State Military-Industrial Committee arranged a small exhibition in the courtyard of Peleng’s new building, featuring the latest achievements of the domestic defence industry. Specialists from the Committee told journalists about the ‘unmanned medium-range aerial complexes’ and ‘simplex stations operating under the trunk system’. Reporters quickly recorded the information, only to be warned that it would perhaps be better not to write such details. Of course, the exhibits on show were not secret — as most have already been exported.

Before the President’s arrival, the State Secretary of the Security Council, Leonid Maltsev, couldn’t help touching a portable antitank missile complex, called ‘Shershen’, with evident respect. He asked what percentage of domestically produced components had been used and was told by Electro-physical Laboratory’s Director, Mark Polonevich, that none are yet used, although the Belarusian share accounts for 80 percent of the total cost of the complex.

Mr. Maltsev gave a nod and I wondered whether we have our own rocket. Mr. Polonevich stressed confidently that one is coming soon. “If money is available then we’ll have our own rocket,” added another defence industry specialist.  If the state allocates funds, then everything can be produced domestically, as defence staff stressed on speaking to the President.

However, Mr. Lukashenko made it clear that no major funding should be expected. Moreover, he reminded again that a detailed investigation would be conducted to find out why many import substitution projects (generously financed in the past) have failed to bring sufficient return — across all spheres of the economy. He warned that, from now on, money will be allocated only to those projects which can prove that they’ll pay for themselves.

In fact, some projects were actually presented by company directors and ministers as being able to easily recoup their costs; sadly, several manufactures turned out to lack demand, generating losses. The talks at Peleng make clear that, from next year, any company applying for state support will need to present firm guarantees of return. Mr. Lukashenko believes that the overall volume of state financing should be cut.

The Chairman of the National Academy of Sciences’ Presidium, Anatoly Rusetsky, reported on Belarusian scientists’ developments to the President, stressing that these enjoy demand abroad and bring profit. On hearing this, Mr. Lukashenko asked whether this meant that the National Academy of Sciences would no longer need budget financing but Mr. Rusetsky was quick to admit that such a time had not yet arrived, smiling but showing some anxiety. “We also have natural and humanitarian sciences to think of. We’re not ready yet. Give us more time,” he requested.

However, budget financing for the National Academy of Sciences and the defence industry will be reduced. The President expects greater feedback and financial responsibility from the state sector — as was noted on visiting the workshop for assembly and testing of space engineering. Journalists were unable to enter the top secret area but were able to watch from beyond a soundproofed, thick glass wall. The Head of the Presidential Press Service, Pavel Legky, later said that Mr. Lukashenko spoke of staff issues, noting that the crisis has demonstrated how efficiently heads can manage their companies, making it possible to draw certain conclusions. Mr. Lukashenko believes that enterprises must be governed by those with knowledge of modern management methods and proven efficiency.

Peleng’s General Director, Vladimir Pokryshkin, is a positive example in this respect. Despite the crisis, his company generates profit, exporting 95 percent of its produce. Peleng’s portfolio of orders is compiled several years ahead.

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