Equipment modernisation in machine-building complex with Chinese loans could repeat cement industry modernisation failure
The government has elaborated a development strategy for machine building until 2020 with a perspective up to 2030 with a total funding over USD 9 billion. Investment is needed to expand the range of products due to a decrease in the competitiveness of the current assortment of manufactured products and the loss of some foreign markets. Chinese related loans are expected under the Belarusian government guarantees. Belarus has insufficient own funds for the modernisation and attempts to raise funds through bond issues for public and legal persons are unlikely to succeed due to the lack of a guarantee of return on investment. The practice of using Chinese loans for the modernisation at various enterprises in Belarus was unsuccessful. As a rule, deadlines were disrupted and the supplied equipment was of poor quality. Modernisation attempts with Chinese equipment could lead to an increase in the debt burden on the budget without improving the economic efficiency of enterprises.