Belarus’ economic model cannot solve choking warehouses problem
Since early 2014, industrial stocks grew by more than EUR 400 million, which implies that Belarusian automakers’ competitiveness on the Russian market continued falling. Competiveness could improve if industrial enterprises’ management became more independent, but so far, the authorities do not consider such a move.
The National Statistics Committee has published data on stocks’ value as of March 1st, 2014.
On March 1st, 2014 the industrial enterprises stocks’ volume totalled EUR 2.54 billion, which is EUR 0.4 billion more than on January 1st, 2014. The main increase occurred in engineering, which is associated with a drop in truck, agricultural machinery and dump trucks sales on foreign markets. Measures to stimulate domestic demand for these products have had little effect, due to the small capacity of the domestic market relatively the production volumes.
Official data on warehouse stocks does not reflect the real situation. For example, in February trucks’ stocks increased by 1728 units, while only 670 units were produced in February. Some 1058 trucks have appeared virtually ‘out of the blue’, if we assume that all cars produced in February were sent straight to the warehouse. The practice of disguising real stocks at warehouses behind ‘assembly in progress’ statistics has become widespread. For instance, an enterprise refers to a missing part, which prevents a truck from being completed, and does not list the truck in the warehouse statistics.
The enterprises are prompted to distort statistics, because, on the one hand, they have industrial production plans, and on the other hand, they have a task to maintain the ratio – inventories to average monthly production volume. In the context of rapidly changing market prices, due to the devaluation in countries-Belarus’ major trading partners, the industrial enterprises’ opportunities to reduce prices are limited. As a result, enterprises lose contracts and build up stocks.
Long-term storage of products in improper conditions leads to products’ degradation and additional costs on the repairs. In addition, stocks bind enterprises’ working capital, which, given the costly loans, leads to additional costs and reduced competitiveness.
Thus, the restrictions on stocks’ growth have resulted in enterprises fiddling the statistics. Enterprises’ greater managerial independence could help them to save money and would improve export data and settlements in the economy.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.