About 3m people (a third of the population) live in small towns, their well-being governed by the economic, social and cultural state of these settlements. With this in mind, the development of small and medium-sized towns is a priority for Belarus — as stipulated by a state programme worth Br2 trillion. This embraces 187 settlements. Realisation of 1,000 investment projects (including 192 of primary importance), the creation of dozens of thousands of jobs, and the reduction of unemployment to 1 percent were fixed by a Presidential decree of 2007. This should significantly increase the quality of life in small towns and reveal their economic potential. This year closes the programme’s realisation period… so what results are expected? Stimulus for capital. Naturally, large cities offer more opportunities than small towns. Minsk residents and those living in regional centres have always benefited from more advantageous conditions than their neighbours in villages and district centres. Urbanites have greater access to theatres and libraries but, more importantly, have greater possibilities for employment. Some production enterprises in provincial areas have failed to adapt to market conditions, bringing reduced manufacturing volumes and, even, closures. In the worst cases, settlements have shrunk in size as residents have moved away in search of work.
Residents of Yelizovo (in the Osipovichi district) know all about such challenges; 15 years ago, the oldest Belarusian glass making plant ceased production, despite employing a major part of the local population. As a result, people lost jobs and there were no other possibilities for employment. Fortunately, an Austrian investor arrived, investing $40 million in modernisation; obsolete machines (from the 1960s) were replaced with modern European equipment. The company now manufactures dozens of varieties of glass containers, meeting the domestic market’s needs in glassware and healthily exporting. Its employees receive good salaries and Yelizovo ensures a good share of its profits is reinvested annually. In the early 1990s, about a hundred flats stood unoccupied in the town. Once the factory was revived, citizens from neighbouring villages and, even, cities moved into them.
How is it possible to attract capital from Minsk into the provinces — where competitive new production facilities are so badly needed? Presidential decree No. 1 — signed in January 2008 — is designed to stimulate investment by offering privileged terms for business in small towns (up to 50,000 residents). Commercial organisations setting up are exempt from profit tax and some other duties for a period of five years while entrepreneurs are exempt from paying value added tax and customs fees when importing technological equipment (to be used as a part of the statutory fund of a company using foreign investments).
The results of such measures are already evident. In 2008, investments into the basic capital of small and medium-sized towns totalled about Br5 trillion — much exceeding forecasts. Over 30,000 jobs were created and industrial production in the provinces rose by almost 20 percent on 2007. Belarusian provinces are rising from the ashes.
Comfortable place. The global financial-economic crisis has, of course, influenced the economic development of small towns. Nevertheless, they are showing good dynamics. In late December, the Government released the preliminary results of its revival programme: the pace of growth of provincial industrial and consumer production has grown beyond the country’s average; employed citizens have risen in number from 813,000 to 827,000, with about 23,000 new jobs created; and over 1,200 small enterprises have been set up in the provinces, with their total number approaching 9,000. Investments into the basic capital have yielded prompt results.
New factories, modern technology, competitive manufacture and worthy salaries seemed a dream some time ago. Now, they are becoming a reality for provincial towns. These are gradually turning into comfortable places to live — with jobs and accommodation, and access to social and cultural services. Naturally, they also boast cleaner air and fewer transport problems than the capital. In fact, they could inspire economic development countrywide.
Thirty kilometres from Minsk, the Dzerzhinsk district’s towns of Dzerzhinsk, Fanipol and Negoreloe are part of the revival programme but have managed without state funding for the past two years. Rather, private investments are flowing in to finance new production. According to the Chairman of the Dzerzhinsk District Executive Committee, Nikolay Artyushkevich, about 30 new companies (most of them production based) have been registered in Fanipol alone. The 550 commercial enterprises located in the district generate almost 25 percent of taxes.
Dynamic economic development has greatly changed the town itself. In the past decade, much construction work has been undertaken; few buildings look as they did ten years ago. Taxes allocated for Fanipol’s development have been spent wisely on improving the town.
Regional development is the foundation of a strong and prosperous Belarus, as envisaged by state policy. “We are focusing attention on all aspects of small and medium-sized town development, providing equal living conditions for those in cities and villages,” the President stressed on New Year’s Eve, at the opening ceremony of an ice palace in Baranovichi. It is the sixth ice palace in the Brest region, confirming the successful fulfilment of state targets.
By Lilia Khlystun
