Mechanism to work in another way
Living within one’s means is best anti-crisis recipe but global competition remains
Under current conditions, remaining competitive is the only way to ensure sales worldwide. This was perhaps the main reason behind the state reducing its support for enterprises in Belarus, as adopted during the President’s session and soon to be outlined by a corresponding decree.
The state has been rendering support to enterprises implementing programmes vital to the nation’s wellbeing, subsidising bank loans by covering some of the interest (from half of the refinancing rate to the full rate, which is, at present, 22 percent per annum). On February 23rd, the President signed Decree #78, charging the Government with adopting measures to optimise and reduce budgetary expenditure. Interest rates on bank loans to enterprises are to be offered at 2 percent less, which the Finance Ministry has calculated won’t drastically affect the economy, and should create a surplus for the budget. This year, budgetary expenditure will fall by Br400bn, and by Br500bn in 2017.
The benefits will be evident but the President notes, “Who will bear the burden? Enterprises or banks? I’d like to see compromise in this issue.” The proposal by the Government is to be further developed, taking into account the President’s remarks. The burden of subsidising loans should fall evenly on the private and banking sectors.
By Vladimir Velikhov