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Lukashenko wants to scale up import substitution, cut out middlemen

President 16.10.2018 | 12:37
An archive photo
An archive photo

MINSK, 16 October (BelTA) – We need more efforts to step up import substitution and cut out middlemen Belarus, Belarus President Alexander Lukashenko said as he met with Prime Minister Sergei Rumas on 16 October, BelTA has learned.

“We have commissioned a car plant. Look at the localization level there – it is close to zero. We need to manufacture our own things. Let us make car seats there, and then engines and drive systems,” Alexander Lukashenko noted.

The president emphasized that Belarusian enterprises need to embrace the world's best technologies, purchase the necessary equipment and produce everything we need in line with the import substitution policy.

“This will be enough to maintain economic growth for several generations. We import so many things that our eyes pop out: from toothpicks to engines. Import substitution is a very important matter. You don't have to invent the wheel, just install machinery and technological equipment and produce component parts,” the head of state said.

Speaking about middlemen, Alexander Lukashenko noted that it is often a breeding ground for corruption. “Why are people, first of all officials, detained and then jailed? All of them are tied together by intermediary schemes. What is striking is that middlemen deal even in Belarusian products. Products are made in Minsk and then sold via middlemen to Minsk-based enterprises,” the president noted.

“Middlemen in banks take money, buy products and resell them to our own enterprises. It is absolutely absurd. We should look into the middlemen that are engaged in import. I do not want to offer any non-market solutions, but intermediation has become a problem. It used to be called speculation – buying and reselling. This chain involves several middlemen. It pushes the price up by 30-50% or higher,” Alexander Lukashenko noted.

He added that he had instructed Chairman of the State Control Committee Leonid Anfimov to come to grips with this matter, but no progress has been made. The president tasked Sergei Rumas to tackle matters related to import substitution and middlemen and to put forward relevant proposals by the end of the year.

Answering questions of reporters, Sergei Rumas noted that import substitution targets were submitted to each ministry. He cited Orsha District as an example of how these targets can be achieved. “Orsha has several big factories with excessive premises. They can serve as very good venues for import substitution facilities, in particular, car manufacturing. This is one of the possibilities. As far as other commodity types are concerned, the government will encourage the establishment of import substitution facilities provided there are necessary conditions and competitive manufacturing terms in Belarus,” the premier noted.

Speaking about middlemen, Sergei Rumas noted that none of the instructions provides for a full ban, because intermediation is needed in some sectors and industries. “For example, a grocery store where we buy products is also a kind of middleman. Retail outlets, warehouses are unavoidable elements of intermediation and modern-day trade,” he said.

However, the premier admitted that it often happens that a product price increases at every stage of a distribution chain. “When the head of state calls for eradicating intermediation, he means, first of all, intermediation types that hamper product competitiveness,” Sergei Rumas noted.

The government is now working on three presidential instructions related to various aspects of intermediation. “A great amount of work has been done to streamline the sale of Belarusian and imported products. This is one of the matters that should always be on our radar,” the premier noted.

Sergei Rumas emphasized that economic sense is all important. “If intermediation helps boost sales and cut costs while selling products, then it has the right to life. But when a product passes through several hands within one community or one enterprise, we should cut it out, thus increasing operation efficiency,” the premier noted.

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