State aid unlikely to resolve problems with Belarusian economy
Despite the overall economic recovery, some Belarusian industries continue to generate losses. Over the past ten years Belarus spent more than USD 2.5 billion on industrial modernisation, which boosted growth in production, but had no impact on its efficiency. High costs would prevent such industries from reporting profits by the year-end.
According to Belstat, as of August 1st, 2017, three industries reported losses. Namely, 34 woodworking enterprises of 121 with a total loss at BYN 118 million, which outpaced profits of other woodworking enterprises. Profitability of sales in the woodworking made some 0.8% and losses were attributed to due payments on modernisation loans. In addition, metallurgy and glass and cement plants were loss-making, too. Unprofitable enterprises took the lead in laying off workers across the country.
In previous years, the state invested more than EUR 1 billion in modernising the wood processing; more than USD 500 million in the key metallurgy enterprise, BMZ; some USD 1.2 billion in the cement industry, however they still require the state support. In 2016, BMZ reported over USD140 million in losses, all three cement plants were unprofitable, as well as most wood processing enterprises. That said, in 2017, exports in wood processing grew by 39%, in metallurgy by 30%, and at cement plants by 64% as compared with 2016. However, the growth in exports led to an increase in losses. High production costs are unlikely to enable these enterprises to report break-even production by the year-end, while reduced discount rate would be to no avail in repaying loans, since they were issued in foreign currency.
Overall, the growth in exports did not help metallurgy, woodworking and cement plants to report profits. The state would continue to provide state support for these industries, however it is unlikely to help overcoming losses in 2017.
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.