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July 11 – July 17, 2016

Agricultural lobby triggered reorganization for debt relief

The situation has not changed

President Lukashenka has approved measures on financial recovery of agricultural enterprises, which envisage pre-trial rehabilitation for some enterprises and bankruptcy for others. Despite the fact that the state annually invests large amounts from the state budget to agriculture, agricultural enterprises are among the main troubled borrowers. One quarter of all agricultural enterprises is unprofitable. However, the authorities are not envisaging changing their approaches. They will not abandon their plans to create large holdings, which will attach insolvent agricultural enterprises to profitable ones. In the mid-2000s, the state attempted to attach unprofitable agricultural enterprises to successful private companies in order to support agricultural production and employment in rural areas, but to no avail. In addition, this problem issue was raised during the All-Belarusian People’s Assembly. Most likely, reorganization of agricultural enterprises is caused by the need to write-off bad debts. In addition, the administration may regard such reorganisation as a way to improve performance indicators in order to meet the requirements of international lenders.

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