Belarus President: Knowledge and technology are key to solving economic problems

Belarus President: Knowledge and technology are key to solving economic problems

Export of products for Belarus is like oxygen to the body. But economic success does not depend only on external factors. On Friday, President Lukashenko sternly warned the government on this issue and demanded to search internal reserves, which can still be found, no doubt about that. I think that every self-critical employee and manager can agree with it. It's not just about the number of blister or the amount of sweat, but also about the effective management, new knowledge and, of course, new technologies. In general, the report to the President on the economic results of the first half of 2016 was not easy for the government. Yulia Beshanova has more details.

At the start of a new five-year period, the head of state is not satisfied with the work of the government. Only a few parameters and key indicators were met. We are talking about minimum price increase, and in August, for the first time in 7 years we saw deflation, that is, price cuts. The President's assessment of the work of the economic authorities is unsatisfactory - the economy is stable but is not growing.

Andrei Kobyakov, Prime Minister of the Republic of Belarus:
January-February - a stressful period: the price of oil is $30 or less, the rate of the Russian ruble was 80 rubles per dollar. March-June is a period of recovery growth. July-August was the period of the negative impact. Primarily due to Russia's reduced oil supplies. Thus our refineries are not getting enough oil. Unfavorable conditions occurring in agriculture also played their part.

The Government admits that the real figures have not reached those planned. The gross domestic product is lagging behind as well as labor productivity. The main positive aspects is macro-stability, slowing inflation and reducing costs of credit resources. A number of indicators are even higher than in the world. For example, GDP growth over 7 months is 110%, with foreign exchange earnings reaching $20 billion, which is a historical high. Belarus' foreign debt settlements are timely, with foreign exchange reserves building up. This all has been achieved against the backdrop of a difficult external economic situation.

At the meeting, the head of state stressed that the government must not justify the mistakes and shortcomings by the unfavorable global climate. He added he expects from the government concrete decisions and proposals. In addition, the very negative global trends were clearly visible when the development program for the current five-year period was being adopted. So, those negative trends should have been taken into account. Any deviation, even by some tenths of per cent, is unacceptable.

Alexander Lukashenko, President of Belarus:
It seems that contrary to the adopted program for the next five years, the Government is implementing the inertial scenario of the economy's development. That is, it's passively drifting, referring to adverse external factors and is not trying to mobilize all forces and resources for economic recovery. Priorities were designated for everyone and you have to follow them strictly.

Belarus is now facing several key issues. First, world prices for the most important items of Belarusian export have fallen. These are oil products and potash. So labor productivity and foreign investment have decreased. Belarus continues to buy more than it sells.

Andrei Kobyakov, Prime Minister of the Republic of Belarus, added that Russia's cut in oil supplies have added to the problems. Thus the volumes of industrial production decreased and the corresponding volume of wholesale trade also went down. He expressed hopes that in the near future Belarus will be able to find solutions with the Russian partners to resume normal relations in the gas sphere.

Alexander Lukashenko, President of Belarus:
I just want to warn: your references to external conditions will not be accepted. If we defend the independence of our state, we must earn money with our own labor, relying on internal resources. Furthermore, all these problems you are talking about were taken into account when planning for 2016. Cost reduction, new technologies and other reserves are poorly used in the management of enterprises. In other words, knowledge and technologies are key to solving the problems and move forward.

Belarus lags behind by nearly three times from the developed countries when it comes to the share of high technology in the industry.

Irina Novikova, head of the department of management, business technologies and sustainable development of the Belarusian State Technological University:
First of all, we are talking about pharmaceuticals and biotechnology - spheres that are the most attractive and where innovations can bring yields. We have a number of innovative companies that are keeping pace with the global innovation, with developments. If we want to attract capital here, we need to see whether it is possible to revise the taxation in these transactions and in the operation of new plants.

The Belarus government's forecasts are conservative but optimistic. The GDP will increase by 1.7%, real incomes are to grow by 1.5%, while inflation is set to fall to 9%.

In order not to repeat the mistakes of the past, the government decided to be based on the worst-case scenario. Oil prices are planned at $35 per barrel and the Russian ruble, on which Belarus depends indirectly, was deliberately underestimated. But this is more like insurance so that new waves of the global crisis do not rock the boat of our budget.

Andrei Kobyakov, Prime Minister of the Republic of Belarus:
We expect a budget with a surplus in 2017. We are taking into account these $1.5 billion in order to be able to pay off foreign debts. We will pay off at least 50% of external debt in the near future using our own resources and half will be refinanced. Thus, over the next 5-6 years, we will be able to noticeably reduce the external debt burden.