Market dictates but it is also subject to external influence

Some time ago, Alexander Lukashenko ordered to conduct serious modernisation at Minsk’s Kommunarka Confectionery Factory. The President recently met staff to express his pleasure that most modernisation at Kommunarka has been achieved: 95 percent of plans, with the remaining 5 percent scheduled
Some time ago, Alexander Lukashenko ordered to conduct serious modernisation at Minsk’s Kommunarka Confectionery Factory. The President recently met staff to express his pleasure that most modernisation at Kommunarka has been achieved: 95 percent of plans, with the remaining 5 percent scheduled.

The Head of State spoke of job preservation at the company, which employs mainly women. Mr. Lukashenko added that modern times aren’t easy but nor are they catastrophic. He is optimistic for the future.

The President praises the enterprise’s modernisation, including its expansion of volume production and improved quality of confectionery. Some problems continue to require attention but Mr. Lukashenko notes that we can learn from foreign colleagues’ experience in seeking new sales markets.

Touring the Kommunarka factory, the Head of State heard about the fulfilment of his orders, relating to the production-economic and financial situation, and prospects for development. The President visited workshops, seeing the production of new confectionery using modernised equipment, and attended an exhibition of produce. 

As Kommunarka JSC’s General Director, Ivan Danchenko, explains, the company has introduced a direct procurement system, with raw materials supplied only in the required volumes. New technological lines have been installed, a new chocolate workshop launched and the existing confectionery workshop and communication system modernised.

The company is now focusing on the expansion of its network of branded shops and contracts with foreign consumers. Belarusian sweets are exported to 17 countries, with Russia as the major importer. Apart from preserving traditional markets, new markets are being added, including China.

As the President stressed, while the range of confectionery is being expanded, its quality should not suffer. Company heads assured Mr. Lukashenko that this issue is receiving special attention. Results from the first quarter of 2016 indicate that all major indicators are being met. Sales volumes are growing and export figures increasing, while warehouse stocks are reduced.

Mr. Lukashenko also met workers to answer questions on the enterprise’s further development, as well as on forthcoming pension reform and changes in payment for housing-and-communal services.

Below are some of the Head of State’s comments:

On management style

Remain calm when I place very strict demands on some officials, businessmen and labour teams. Believe me, I’m not, bloodthirsty. However, it’s easy to lose hold of the country; afterwards, it would be too expensive or, even, impossible to reel things back again. For example, look south, to what was one of the richest countries, with a 40 million population. Where is it now? Order and responsibility are essential. 

On property

I’ve warned all members of the Government that there will be no privatisation of companies directly dealing with food or clothes production. As you see, we’re attempting to restore our woollen cloth and suiting fabric production. The state should have a hand in everything essential to living. I place Kommunarka highly on this list, because sweets are important to our children.

On private businessmen

Times are hard but they aren’t critical. There’s no catastrophe. We need to stop whining and get down to work. Nobody will bring us happiness if we fail to take it with our own hands. The Government should stop thinking that private businessmen are the answer to all success and happiness.

On employment

I’ve decided how many jobs should be created this year: 50,000. There are few unemployed people in our country, which is good. From the point of view of citizens, it’s ‘bad’ that they need to compete for employment, but this is the natural way of things, observed everywhere. No one should be idle. Rather, we should all strive to earn money for our family. The state must create conditions to support this. It’s the simple truth regarding employment. We’ll create new jobs for specialists and must prepare our children for particular spheres, while avoiding offending those who’ve worked for 20-30 years.

On tariffs on housing-and-communal services 

The formula is simple: everything must be paid for. If you don’t pay the full price, then someone else has to pay the rest for you. Where are we going to find the second half? For now, the state budget will cover this. Belarus is a socially-oriented state, as it became 20 years ago.

We aim to cover 50 percent of the cost of services by late 2016; at present, we cover 40.2 percent. We won’t raise tariffs, rather funding centrally. We’ll soon be signing a corresponding decree. Next year, we’ll assess the budget and may raise utility rates by 2percent(rather than 25 percent) or may leave them unchanged. We’ll see. Don’t worry. We’ll act in the best interests of citizens. 

On pensions

I’m in favour of raising the pension age by three years: by six months every year. I don’t want to cause offence, so the retirement age will be increased by three years over the coming six or seven years. What are the risks? People’s salaries aren’t high, and they aren’t increasing countrywide, which affects the pension fund. What can we do if we don’t reduce pension payments? We don’t wish to hurt people but, as parents, we cannot lay this burden on our children. We must find a solution ourselves.

The pension system is another problem. In our country, children support parents. I rejected the idea of a financially defined contribution, choosing to keep our existing system and allowing such contributions only voluntarily. Our society will probably mature one day in this direction, and the decision may change.

On prices

In Q1, prices in Belarus rose by over 4 percent (on average), with housing-and-communal services contributing greatly. Prices for food and clothes remain steady, as producers and sellers understand that demand has fallen. Why are prices growing? In appointing a new Trade Minister, recently, I looked at anti-monopoly regulations at the Trade Ministry, working with the people who oversee prices. We’ll strengthen control, so that we can act as necessary. I say openly that we’ll keep control over pricing.

By Vasily Kharitonov

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