Unfavourable market conditions are driving force
Exports soon to become main indicator to all assessing our national economy
By Denis Krymov
The Internet, television and newspapers are hugely influential but often fail to show an objective picture of the world. The presence of competent and knowledgeable practitioners is the best indicator of economic success, asserted the President recently, speaking of export issues.
Exports of products and services are a critical source of income for Belarus, comprising 85 percent of GDP. We consume minimal goods but have retained the structure of an ‘assembly line’ from Soviet times. Adaption to foreign markets is vital, as the All Belarusian Assembly notes: exports are a top priority. Attention has been given to this sphere for some time, with results now becoming evident. Over the first 8 months of this year, sales of goods and services abroad grew by 22.5 percent, against a forecast of just 11.6-12 percent. Our positive balance is almost $4bn — thanks to the hard work of enterprises. It seems that everything is good, but the experts create a real picture of the world.
The Belarusian Steel Works and BelAZ are working dynamically, retaining their leading place on world markets, despite prices falling and supply outstripping demand. New players are appearing, creating significantly more competition. However, giants like BelAZ are adapting their production, meeting the latest technological demands from mining companies. The markets for food, chemicals and potassium fertilisers are all becoming tougher; there is a true global crisis but this is only inspiring our companies to push themselves forward, keeping pace with innovation. It is a case of sink or swim.
Mr. Lukashenko has emphasised that he is interested not in general facts but in the real picture of how exports are being expanded. He stresses, “Who is exploring and successfully developing foreign markets, at the expense of others? What has caused the decline in production and exports and the expansion of warehouse stock for industrial enterprises? Why is Gospishcheprom seeing less profit? What is happening to the export of services, particularly in the spheres of construction and transport? Problems exist regarding payments for delivered products and the flow of currency earnings into the country. Why are we seeing low efficiency in our distribution network abroad?”
Listening to reports by the Prime Minister, Mikhail Myasnikovich, the Chairman of the State Control Committee, Alexander Yakobson, the Chair of the National Bank, Nadezhda Yermakova, and others, it’s clear to see that they have a grasp of the situation and know how to tackle it. Of course, there are ongoing issues but these can be solved. It appears that the system is sound, so this does not require the direct intervention of the President but Mr. Lukashenko is keen to see decisive entry of new markets. Personal contacts and relationships between state leaders, ministries and business leaders are vital. Such partnerships are built through face to face meetings, as the President asserts. Sales are not made by sitting at your desk.
Modernisation is a vital aspect of expanding sales, since competitiveness relies on innovation and cost effectiveness. Investment is required but funding must primarily come from export revenue, as Mr. Lukashenko notes. Ideas are plentiful regarding the best route to stimulating export growth, with improved terms (including leasing) suggested. The Chairman of the Grodno Region Executive Committee, Semyon Shapiro, has suggested a simple but effective mechanism: financial bonuses for managers who attract foreign investments and expand sales abroad. This scheme has been trialed in the Grodno Region for milk sales, with significant results. All ideas are welcomed and, as the President notes, final assessments will be made in January. Vice-Premiers are responsible for raising export volumes while the Head of the Presidential Administration, Andrey Kobyakov, has been tasked with judging the efficiency of modernisation of production lines (at the order of the President). Special attention is being given to timber enterprises, which have received major funding. As the President asserts, such investments must reap profit.