Much needs to be done within next five years

The document, presented by Prime Minister Andrei Kobyakov, outlines areas, measures and mechanisms to be used in Belarus’ economic development, to ensure (by the end of the five-year term) significant growth.

The programme of government activities is an integral component of a five-year package closely connected with the fulfilment of 20 state programmes and a programme of socio-economic development for 2016-2020. The document specifies three basic conditions of economic policy.

Plans include the provision of a macroeconomic balance and consecutive reduction of inflation to one-digit figures, by 2017, while simultaneously reducing bank loan interest rates. By 2020, inflation shouldn’t exceed 5 percent. As far as loan interest rates are concerned, the task is to control money supply (through the reduction of inflation) and to reduce banks’ commission fees, to achieve interest rates of 10-12 percent on all loans.

The programme also envisages the expansion of gold-and-currency reserves to a minimum safe level (no lower than three month’s worth of imports by 2020). In addition, there should be non-debt financing of the country’s balance of payments, gradual repayment of existing external debts and eradication of current account deficit in the balance of payments (to under 3 percent of GDP per year).

Moreover, the programme determines a range of consecutive and inter-related institutional measures, which are grouped in five major sections. The first includes measures to restore the competitiveness of the industrial complex. The second is connected with cost cutting and restructuring of power engineering and housing utilities. The third envisages the creation of jobs and the development of small and medium-sized businesses. The fourth tackles infrastructure and the construction complex, while determining mechanisms to optimise costs, growth and diversification of export of construction services. The fifth ensures powerful social focus, to support and implement social programmes to enhance the quality of life for citizens.

Moreover, the mechanism of state support, and its ideology, is changing. The state is withdrawing privileged loans and subsidies, moving towards sectors which support the priorities of national development, such as the agro-industrial complex. According to forecasts, by 2020, food exports should stand at $6.2bn. We all have the opportunity to earn, and apply for loans on privileged terms, under equal conditions, but not everyone will succeed. Efficiency of production management is essential, with the government suggesting giving 25 percent of an enterprise’s statutory funds to the most successful heads: those ensuring stable profit.

Balancing financial flow is a priority, as Mr. Kobyakov explains, saying, “Companies are used to receiving state money without conducting any reform to ensure efficiency. Funds will no longer be given arbitrarily. Enterprises need to reduce costs and implement projects that pay for themselves.”

The creation of high-tech sectors within the Chinese-Belarusian Industrial Park and High-Tech Park is high on the agenda. These include pharmaceuticals, microelectronics and laser systems. According to the Government, adopted measures should help restore positive economic dynamics by the second half of 2016, and high rates of GDP growth within three years.