The calendar year starts on January 1st but spring is a time for awakening and new beginnings. January and February can feel very much like the continuation of winter, begun in November, but March inspires different feelings.Spring is also a time for looking back on achievements, analysing successes and areas for improvement.
Spring is also a time for looking back on achievements, analysing successes and areas for improvement.
Assets Present but Liabilities Still Impressive is dedicated to the recent serious Governmental session chaired by the President, tackling the economic results of the past year. 2013 is a decisive year, marking the middle of the five year plan, and will influence how the economy proceeds.
The measure of success is simple: the achievement of goals set by the 4th All-Belarus People’s Assembly. The President thoroughly analysed all aspects of Governmental activity, since it must play a key role in guiding the economy. Any obstacles to moving forward need to be critically apprehended, so the President’s assessments were severe. Much needs to be improved, although Mr. Lukashenko appreciates the merits of those currently working in this sphere; after all, Belarus has avoided the collapse of its economy. However, his tone was sharp, subjecting the Government to substantial criticism. The reports of the deputy prime ministers looked more like an examinations.
What was on the Council of Ministers’ agenda?
The strategic line for this year is modernisation of enterprises; every head must work to achieve this goal. Efficiency is also vital: at least $60,000 revenue is expected per employee. Meanwhile, the Council of Ministers and the National Bank have been asked to focus on several key aspects.
First of all, it’s essential that we preserve our foreign balance, with exports rising to $60bn. This is the major factor behind restoring a high rate of economic growth. Secondly, the banking system needs to bring Rouble interest rates closer to those for foreign currency loans. The President demands, “It’s high time banks turn to face the economy!” Thirdly, enterprises need to find other resources and foreign loans, on beneficial terms for the country. Fourthly, people shouldn’t be referring to a lack of resources for modernisation. Fifthly, we need to create conditions promoting entrepreneurial initiative; the state and private sector both need to embrace economic modernisation. Sixthly, we should focus on the social aspect of modernisation, connecting salary rises to the growth of labour efficiency.
The background to solving these tasks has been clearly and concisely outlined in the Year of Thriftiness, with the primary focus on using resources efficiently.
Within the next few months, the Government will be focusing on solving priority tasks of modernisation and further liberalisation of business conditions, while promoting the expansion of exports and implementing innovative projects. Read more in Not So Much Quantity as Quality.
According to Belarus’ Economy Minister, Nikolai Snopkov, legislation exists to guide economic modernisation, with new and existing enterprises being supported by the state financially, including through access to affordable loans. Naturally, projects should be highly efficient, with a quick return forecast, to warrant such capital injections.
Over the last seven years, over $31bn has been invested into Belarusian industry, as Prime Minister Mikhail Myasnikovich emphasises. He believes that more funds are needed to develop the major branches but asserts, “As the country launches major modernisation, the issue of efficiency is vital; there’s no sense in modernisation for its own sake. Each injected Rouble of investment should return two or three in added value, within a period of 3-5 years at most. Enterprise heads need to show initiative, being aware of the market situation, so that they can calculate future prospects and plan accordingly. The most important innovative projects have already been identified: 711 of 1,350 have been selected, covering pharmaceuticals to nano-technologies.
Of course, modernisation includes not only contemporary technologies but efficient economic relations; 800 enterprises are being promoted for investment by the Economic Ministry, with investors sought at home and abroad.
Special attention is being paid to the regions, which are likely to undergo serious transformation; most are still reliant on the industries popular in Soviet times, which hampers their development. More diversity is needed, with production reflecting the needs of the future rather than the past. Many factories date from 30-40 years ago and are long since out of date technologically, making them uncompetitive. Of course, the well-being of local residents is tied to the success of local industry.
Exports are a major priority for the Belarusian economy and, last year, the country achieved its first positive foreign trade balance in a decade, selling more than it bought on the foreign market. Experts believe that the Customs Union and the Single Economic Space are already producing a positive influence on trade. In 2012, our exports to Russia rose by almost $2bn and export supplies to Kazakhstan increased by $4130m, despite prices on the external market being far from stable. We hope to see even better results in 2013, inspired by expanded physical volumes and new types of produce with high value added, thanks to economic modernisation. In 2013, we should see people’s salaries rise in response to this economic growth.
Benevolent goals, concrete tasks and well-thought-out mechanisms of achievement are at the heart of this success. We have no choice but to move with the times. The question is whether we view this as a problem or an opportunity.
BY Viktor Kharkov
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