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January 16 – January 22, 2017

Growth in bankruptcies in Belarus to enable reduced support for public sector

The situation has not changed

According to the Supreme Court of Belarus, as of January 1st, 2017, economic courts in Belarus were considering 3094 economic insolvency (bankruptcy) cases, including 106 cases against economically vital state-owned enterprises. During 2016, the number of bankruptcy cases against state-owned enterprises doubled due to reduced state support for the loss-making enterprises. Amid reduced budgetary capacities, bankruptcies of state agricultural and industrial enterprises are likely to increase in number, employment in the economy is likely to shrink, losses in some economic sectors are likely to increase due to the inability to reclaim debt from bankrupt enterprises; in-country migration due to the limited employment opportunities in the single-industry towns is likely to increase. Since unemployment benefits and retraining cost less than the lasting support of chronically loss-making enterprises, some city-forming enterprises are likely to declare bankruptcy and the state is likely to continue to support only the key enterprises for the national economy.

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