Belarusian government will not subsidise most hopelessly unprofitable enterprises in 2016

April 22, 2016 19:41

In 2015, 27 bankruptcy cases were launched in respect of enterprises crucial for the economy. Due to the deteriorated economic situation, in 2015 one in five enterprises was loss making. Budget deficit is likely to change the state policy regarding the support for insolvent enterprises, and more than 50 enterprises may be added to the list of bankrupts in 2016. According to the Supreme Court, as of January 1st, 2015, Belarusian economic courts started 70 insolvency cases in respect of companies that are important for the economy. On January 1st, 2015 there were only 43 of such cases. In December 2015 alone, five more enterprises filed bankruptcy cases and one of the eight largest alcohol distilleries is preparing to file a bankruptcy suit (Mozyr alcohol distillery). Bankruptcies have grown in number due to the deterioration in the economy. In January-November 2015, one in five enterprises in the country was losing money, and the amount of losses in comparison with 2014 has increased by 2.3 times. In agriculture, without the state support, more than 65% of enterprises are loss making. Cement producers have become completely unprofitable, the excise on alcohol policy has severely deteriorated financial health of enterprises in the industry and two producers of alcoholic products may become bankrupts. Only thanks to significant financial injections, such major engineering giants as MAZ, MTZ and Gomselmash are still afloat. Metallurgy enterprises require financial assistance too. In 2016, the state support policy for state enterprises is likely to change. The main reason behind this decision is austerity measures amid anticipated budgetary deficit. Since oil prices fell below those projected in the state budget plan and due to the devaluation of the national currency, the government will require additional resources to make the public debt payments. In addition, yet another planned source of budgetary proceeds – export duties on oil products – is unlikely to raise USD 1.1 billion, which would also require sequestration of budget expenditures. Funds allocated to support the economy and subsidise interest rate on loans is a budget line, which is likely to be substantially revised downward. The state will focus on supporting only the key enterprises of major socio-economic importance to the country, small businesses may be subject to readjustment process, and the number of state-owned enterprises that may file for bankruptcy is likely to exceed 50 by late 2016. Overall, economic recession in 2015 led to a growth in number of state enterprises to undergo financial recovery procedure. Given the limited budgetary potential in 2016, support for loss-making enterprises will be curtailed, which will lead to the bankruptcy of 50 or more enterprises not having crucial importance for the economy.

Similar articles

Death penalty discussion in Belarus: yet not ready for either abolition or moratorium
September 18, 2017 10:43
Фота носіць ілюстрацыйны характар. Источник: Читать далее:

The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.