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Economy
02 December 2020, 11:26

Belarus' government devises approaches to revitalize struggling state-owned companies

MINSK, 2 December (BelTA) - The government has devised approaches to revitalize struggling state-owned companies, Belarusian Prime Minister Roman Golovchenko said at the House of Representatives' meeting as he spoke with the MPs about the government's program through 2025 on 2 December, BelTA has learned.

“The government has developed approaches to the companies' prospects and recovery mechanisms which need to be discussed and put into effect,” Roman Golovchenko said.

He stressed that it is not a matter of creating any special conditions for supporting the public sector.

“The fact that the country has not only preserved but also developed centers of competence in mechanical engineering, instrument engineering and petrochemistry is a great advantage for Belarus. We have a well-developed industrial, scientific and technical base, backbone enterprises that not only provide jobs but also work for exports,” said Roman Golovchenko.

The prime minister disagreed with those who consider the public sector hopeless, although the enterprises need certain support to improve their efficiency.

The government ranked the enterprises into three categories depending on the situation. The first group (almost 80% of enterprises) are solvent enterprises that are able to develop independently without significant support from the state. They only need certain financial rehabilitation and management improvement. A pilot project on establishment of state corporations is planned for these enterprises.

“The second group include enterprises with high debt burden, which does not let them stand firmly on their feet. Almost everything they earn is spent to repay debts. There are few of them, about 250, but they are able to develop, and need support for financial recovery,” said Roman Golovchenko.

About 400 enterprises from the third group are steadily insolvent. According to the government, financial support from the state is expedient only for 20-25 of them. The rest will undergo re-profiling and reorganization with a controlled flow of workforce. The prime minister emphasized that these people should be employed. The third group consists mainly of small enterprises, half of which work in agriculture.

“I do not want to make loud statements that the government will solve this problem [rehabilitation of the public sector] within six months or a year. I believe however that there is a will to solve the issue, a vision of how to do it, and a team that is ready to implement the task,” Roman Golovchenko said.

Photos by Andrei Pokumeiko

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