from 05.04.2016

Andrei Kobyakov presented to Parliament the Government's action Programme for 2016-2020

Prime Minister of Belarus Andrei Kobyakov April 5, presented in the House of representatives of the National Assembly the Government's action Programme for 2016-2020.

The Program presented is prepared in accordance with article 106 of the Satversme of the Republic of Belarus and adopted by the Council of Ministers. This Program is an integral part of a package of economic measures. Among them - system presidential Decree No. 78 "About measures on increase of efficiency of socio-economic complex", adopted February 23, 2016; the joint measures of the Government and the national Bank regarding the economy and maintaining macroeconomic balance in 2016, which was adopted on 18 January this year; the draft five-year program of socio-economic development of the country for the period up to 2020; a package of 20 state programs, industries and spheres of economy.

"All these documents are linked to one another, said Andrei Kobyakov. - Thus, implemented targeted, the hierarchical principle of forecasting and planning in the country, the transition to which the Government had stated in its programme for 2015. It is one of the necessary conditions of a balanced fiscal and monetary policy".

The Prime Minister thanked the deputies for their active participation in the preparation of the Program, for no document from this package is not left unattended. "We carefully worked through all the submitted suggestions and comments. They were positive, professional and constructive and touched on various spheres of economic relations. We tried to incorporate them into the development Programmes, he said. - If something is not included – it does not mean that is not supported. Cannot be reduced to one, albeit an important one all the variety of social and economic decisions. Many of the proposals included in the other documents already mentioned".

The Prime Minister expressed confidence that in the framework of the traditional meetings of the Government and parliamentarians will continue the constructive dialogue to identify ways of solving problematic issues of socio-economic development of the country.

According to Andrei Kobyakov, the Government's action Programme for 2016-2020 has a number of important features that determined the approaches to its development and content.
In particular, the Program was developed in conditions of high uncertainty of external geopolitical, commodity, and economic factors. "Today nobody can say for sure what will happen, to what level will reach the escalation of the conflict, how will that affect commodity and financial markets. Range of expert views on forecasting price trends is very wide, - said the Prime Minister. In these conditions, the Program aims to preserve flexibility in fiscal, monetary and foreign economic policy along with measures to improve the efficiency of resource allocation".

Activities of the Government in the Program, formulated as specific as possible – to the extent possible and acceptable to the program documents.

In addition, the Program does not contain digitized gross production. "This was brought to the attention of deputies during its consideration on commissions. Explain that the Program is not a manual plan management of the economy, not reports and numbers, and qualitative objectives, focusing on the end result," stressed Andrei Kobyakov.

"The Programme we have concentrated on the directions the measures and mechanisms that should primarily provide system improving the economy's competitiveness and reducing its dependence on external conditions, a recovery in economic growth and rising living standards, he continued. - To achieve this necessary transition to an innovative path of development, comprehensive transformation of economy, followed by targeted strengthening protection of the population".

Systemic macroeconomic and institutional issues reflected in the documents of higher hierarchical level – the presidential Decree "About measures on increase of efficiency of socio-economic complex" and the draft five-year program of socio-economic development. Detailing decisions and actions is given in relevant state programmes and plans. "The package of 20 state programs, 14 of which have been adopted, 6 projects are being approved, forwarded to you together with the proposed Programme of the Government", - said Andrei Kobyakov, addressing deputies.

According to him, at present the Program clearly established three basic economic policy conditions for the medium term. First, is the provision of macroeconomic balance, i.e. to gradually reduce inflation to single digits already 2017 year, while reducing interest rates in the economy. "In 2020, the year the inflation rate should be no more than 5 percent," stressed the Head of Government.

Secondly, this build-up of foreign exchange reserves to a safe level – not below three months of imports by 2020-th year.

"These approaches and concrete measures for their implementation has been discussed at meetings with the President, stated Andrei Kobyakov. - They are based on the provisions of his election program and fully comply with the requirements of the Decree No. 78 "About measures on increase of efficiency of socio-economic complex of the Republic of Belarus".

In the Program it is allocated 10 system tasks and focused manner set out directions and steps for solving them, as well as mechanisms of implementation of the Program, which by the end of the quinquennium to ensure a quality growth of human welfare.

The head of Government highlighted some key areas of sectoral nature.

According to him, measures aimed at increasing competitiveness of enterprises can be divided into two units: the maximum utilization of internal reserves at the individual enterprise (micro level) and the creation of an additional system of macroeconomic and industry conditions. "These measures will be addressed at the same time, in close connection with each other. Without normalization of microeconomics at the level of organizations will not be able to create a stable macro conditions " he said.

The most important direction of improving the efficiency of the industry identified to ensure financial sustainability of organizations. "One recipe for all does not exist. However, a common goal for all enterprises – balancing current cash flow, - said the Prime Minister. - Companies must not "squander" themselves. If within themselves they are in the limit, are financial flows made a realistic assessment of markets, plus implemented measures to increase sales volumes and exports, ie when we see that the "converging ends", then these terms will refinance their troubled loans, unless, of course, is right."

"And to these ends converge, the tools are clear – cost reduction, reduction of all non-production costs, Executive and other, the optimization of procurement of raw materials, components, - he continued.- Together with the National Bank will continue the practice of reviewing the "manual mode" problematic enterprises".

Last year, for example, within the so-called "club of creditors" debts were refinanced by the borrowers in the amount of almost 38 trillion. rubles, thus, the flattened peaks financial payments, money continued to work on the economy of enterprises, improved the discipline of the calculations. "If some businesses will not be able to offer a plan to balance their cash flow and we find, we will go to bankruptcy", - stated the Prime Minister.

According to him, in addition to targeted measures in certain businesses, by the end of September it is planned to form a comprehensive strategy for reform and restructuring of state organizations. "That is, for each enterprise we have to say, what do we do, where we need to restructure", he explained.

In order to improve management of state property the Government approved a complex of measures on prevention of bankruptcy. The emphasis is on strengthening of work on pre-trial rehabilitation, selection, training of personnel, close interaction with the courts. In this area completes a comprehensive improvement of the legislation. The government has developed a draft of the bankruptcy Law and forwarded for approval to interested.

"With regard to the macro-level to restore competitiveness of the economy and its adaptation to external shocks, will be implemented measures of organizational and economic nature," said Andrei Kobyakov.

This is, firstly, a gradual reduction in interest rates in the economy along with reduction in policy (concessional) lending. "By reducing the amount of concessional lending will lower interest rates for commercial loans, thereby gradually bringing the loans back to normal. Strive to ensure that normal commercial lending became as it is today grace," - said Andrei Kobyakov.

By the end of 2015, average rate on all credit portfolio of banks in national currency amounted to 17.3%, a commercial rate of 34.1 per cent per annum. New loans on favourable terms banks in 2015 were issued at an average rate of 9 percent.

"Lower rates will continue through appropriate mechanisms of monetary policy. The challenge is to reduce inflation through control of money supply and the decline in the risk premiums of banks to make loans for all rate 10 to 12 percent," said Andrei Kobyakov.

National Bank March 16, 2016 already adopted a number of decisions. From 1 April by 1 percentage point reduced the refinancing rate to 24 per cent per annum, 0.5 percentage points reduced the rate of obligatory reserves up to 7.5 per cent, other measures.

"By the end of 2016 to reduce rates on newly issued loans, commercial, in national currency, up to 24 - 27 percent per annum", - said the Prime Minister.

He also drew attention to the features of improvement of mechanisms of state support. It is an effective tool to stimulate the development of strategic and priority sectors of the economy.

23 March 2016 the system adopted by the presidential Decree №106 "On state programs and the provision of state financial support", which changes the ideology of state support. "We are moving from the individual to the sectoral system of rendering of state support. Stop "kicking the tails", to support those who are just hard. We will support that meets the development priorities of the country," he said. It is important that projects are selected through competition and provided equal access of economic entities irrespective of form of ownership.

"Of course, businesses receiving support under the old solutions no one will throw. Prior to the completion of projects support will be provided in existing solutions. It will be a transition period to adapt", - noted the Head of Government.

According to him, the development of the industrial complex is planned to be implemented in conjunction with the implementation of the innovation strategy. It is planned to benefit from the modernized enterprises of the woodworking, the completion of construction of the plant bleached Kraft pulp in Svetlogorsk of the CCC, the production of cardboard at Dobrush paper factory, the modernization of Mozyr oil refinery, Naftan, light industry (Kamvol, BPO Baranavichy, Orsha linen mill), house building factories, cement factories, production of long steel at the Belarusian metallurgic plant, the commissioning of the first phase of a nuclear power plant and many other facilities modernization five-year plan 2011 – 2015. In these enterprises invested a lot of money, a lot of work on their modernization and technological improvements.

Main high-tech sector will be formed in the high-tech Park China-Belarus industrial Park and other scientific-technological structures. Focused in innovative and high-tech manufacturing have become the core of innovation-oriented economy.

Retain the approaches to a rational substitution. It is planned annually to $ 600 million to increase production of import-substituting products. The focus will be on small and medium-sized manufacturing business.

Also measures will be taken for concentration credit resources of the development Bank for the implementation of major infrastructure projects, the financing of exports of technology-intensive products, funding to other banks to support small and medium enterprises.

Plans a gradual reduction in cross subsidy. At least half of the economic impact of higher utility tariffs for the population will be aimed at reducing tariffs for energy-intensive industrial organizations. "According to our calculations, this is equivalent to an annual increase in the working capital industry 8 trillion. rubles,- said Andrei Kobyakov. Thus, economic conditions will gradually converge with the conditions of our colleagues in the Eurasian economic Union".

In addition, there is the system implementation of global best practices of corporate governance, strengthening the role of Supervisory boards, their responsibilities as a governing body and oversee the effective operation and strategic development of organizations, the implementation of effective incentive mechanisms to achieve quality growth.

In the Programme for Government outlined measures to implement the strategy of export development, implemented a number of fundamental instructions of the President on diversification of exports and integration in the Eurasian economic Union, the use of cooperation opportunities with the EU and China, the countries of the "far arc". Distribution of export deliveries between the three markets - the Eurasian economic Union, the European Union and other countries by 2020 must be the ratio of the third-third-third.

The most important priority export strategy the government is considering the export of services. "This area does not require large material resources, but through it we can boost our presence in foreign markets, - said Andrey Kobyakov. Park of high technologies, health services, transport, logistics, tourism, agro-tourism, development of hunting – this is a real reserve growth of foreign exchange earnings".

The government has developed a draft National programme of support and development of exports by 2016 – 2020. This program envisages the complex of measures of economic, organizational and informational nature. Among the priorities of the Program is optimization of the national system of export support, export diversification, development of economic integration within the EAEU. The increase in the share of exports of goods to the new promising markets in total exports of goods will grow to 10 percent by 2020, and the share of services in total exports to 25 per cent.

The deterioration of the economic situation in the countries – main trading partners and as a result, reducing demand for the products of Belarusian producers, requires more active effort on the financial support of export of domestic goods, said the Prime Minister. The Decree No. 78 is fixed, the targeted support for exporters, provision of export loans by the development Bank to non-residents. "This is one of the key provisions of the Program. In fact, to export technology-intensive products we create modern tool support. Thus money is not leaving the country, i.e. loans for the purchase of our goods will be connected to non-residents", - he explained. But it's not for businesses with high turnover of capital, with adequate margins and an acceptable profitability that it can compete in foreign markets.

Will continue to support domestic exporters via a scheme of presidential Decree No. 466. To date, has signed contracts with 9 banks and 13 leasing companies. For the period 2011 – 2015 in the framework of this Decree exported almost 13 thousand pieces of equipment worth nearly $ 2 billion. USA.

Andrei Kobyakov spoke about the issues of increase of efficiency of agroindustrial complex. "First of all, we should say that we have supported and will support agriculture. The level of state support measures and instruments of subsidizing current operations will be retained, he said. - This applies to allowances, preferential loans for the purchase of fuel, mineral fertilizers, purchase of public procurement, budget expenditure on irrigation, liming of acid soils, insurance of crops, breeding and seed production and other activities". For example, in 2016 the direct payments budget in the form of bonuses for the products sold: milk, cattle, trust of flax and other subsidies on current operations amount to more than 2.7 trillion. rubles. For land reclamation, liming and other activities planned to 5.6 trillion. rubles for compensation of losses to banks for earlier loans to 7 trillion. rubles, etc.

However, by the end of 2015 the fourth part of unprofitable agricultural enterprises. Continuing government support of such organizations, including through concessional loans, does not lead to financial recovery, but rather, teaches us to default, thereby to encumber them with additional debts, stated the Prime Minister. The result is a chain of defaults, involving farmers, the processing, the budget and banks. "To break this vicious circle the Government has prepared a draft presidential decrees providing for the systematic, ongoing measures for financial recovery of agricultural enterprises", - he said. First, pre-trial financial rehabilitation organizations by passing on certain conditions, assets of these organizations, who will be able to provide more effective their work (lease, asset management). Secondly, inefficient assets will be transferred to a specially created Agency with the subsequent restructuring of "bad loans". For "hopeless financial" organizations using the procedures of crisis management provides for a simplified transfer of assets to an effective owner.

"If the company is not able to function independently and to service the debt even after their restructuring, it has to come new. This is a natural process of reproduction," stressed Andrei Kobyakov.

The proposed approaches are long term in nature and provide a self-replicating mechanism of financial recovery of agricultural enterprises. Further in this process will be involved and problematic processing and serving agriculture organizations.

Last year Belarus moved up to a new principle of supporting the village by providing equipment. 146 adopted by the presidential Decree "On the financing of the purchase of modern machinery and equipment" leasing on a very comfortable environment. Equipment shall be leased for 7 – 8 years at 2 per cent per annum. Advance payment of 10% of the equipment cost. Loans are development Bank. For insolvent organization can pay the local budget. In 2015 under this scheme are leased to 2103 units of machinery $ 1.5 trillion. rubles. The village delivered nearly 200 harvesters and nearly 1 thousand of Trucks. "If you need technique – that's normal tool. But distribution free of charge will not" - said the Prime Minister.

Mechanisms for increasing the efficiency of agriculture envisaged in the State program of development of agrarian business in the Republic of Belarus for 2016 – 2020. In the background of meet the needs of the internal market in agricultural products by 2020 will increase food exports to 6.2 billion US dollars, the labor productivity in agriculture will increase by 1.4 times.

The principal novelty of the proposals is the set of motivational tools and incentives – the possibility of subsequent surrender to the leader, who brought the agricultural enterprise of stable, quarter-shares, shares in authorized funds. "Can be considered and the question of the sale of farms in a comfortable environment, including 1 for the reference value, the organization that ensured efficient management of this enterprise", - said the Head of Government.

He also informed the deputies about the development of the construction industry. The main tasks of construction – cost optimization of the complete cycle of construction works, the growth of export of construction services. "Lower costs will be due to the integrated optimization of production processes and the introduction of advanced management systems, - he explained. - Expected result – reduction of construction cost, providing the population with quality and affordable housing and improving the competitiveness of industry organizations".

Special attention will be paid to the improvement of instruments for financing of housing construction. The share of concessional loans will be reduced, while the level of commercial lending rates will decline. "Loans should be available, monetary system will be brought back to normal. Soft loans will be considered as a means of targeted social assistance to needy citizens", - said the Prime Minister. These features are reflected in the draft State program "housing" for 2016 – 2020. She is now undergoing consultation with stakeholders. The project of this program in the overall package presented to the Parliament.

By 2020, the share of concessional loans and budgetary investments into housing construction will decline. The percentage of extrabudgetary sources will increase and by 2020 will be at least 90 percent. Infrastructure construction will be carried out both from the budget and extrabudgetary sources, including the expense of the developer. Direct costs of the budget for infrastructure will amount to 12.5% of the total volume of financing of houses.
That is, the remaining part will be financed from extra-budgetary sources.

Despite the reduction in state support, the priority remains the construction of housing for large families, stressed Andrei Kobyakov. The share of loans for this category in the total volume of preferential loans will increase. If in 2015 this proportion was 17.7 percent, in 2016 -29,5%.
By the end of the five-year concessional loans will be directed primarily to the construction of housing for large families, and persons with disabilities and other socially vulnerable categories of citizens. "The challenge for 2020 is to create necessary conditions and implement new financial mechanisms of housing construction - leasing, housing construction savings and mortgage lending," - said Andrei Kobyakov.

Separately, he touched upon the issues of development of road and transport infrastructure. It will be through the implementation of two state programs - on development and maintenance of roads in the Republic of Belarus, as well as the development of transport complex of the Republic of Belarus. For financing of these spheres will be sought from extrabudgetary sources, including the resources of private business through public-private partnerships.

Special attention in the report of the Head of Government gave the system the task of reducing costs in energy and utilities. According to him, the costs of monopoly are taken under strict control. It provides: a clear division of costs and their accounting activity; as well as the separation of functions of the customer and the contractor.

In 2016 year it is planned to achieve the level of cost recovery by population size of 50 percent for the entire range of utility services while reducing costs in this area. By the end of 2018 it is planned to enter full compensation for the population value of housing services. The level of compensation would be conducted in stages, in close conjunction with the decrease in the cost of their provision, rising incomes and the development of the system of targeted support.

No later than October of the current year for the most vulnerable categories of citizens it is planned to introduce electronic direct non-cash subsidies for housing and communal services. This subsidy will allow citizens to simplify administration, enhance the control of target use of budgetary funds in housing and communal services and energy.

Andrei Kobyakov also touched upon the issues of creating new jobs and business development. This is a prerequisite not only for maintaining social stability in the society, but also a source of economic growth and welfare. The head of state set a clear objective – each year should be at least 50 thousand new jobs by creating new businesses and industries. "The decisions taken by the Government, defined the specific tasks to governors and Ministers. To consider will be just what is created is really new. New organization, new production, new plant," - said the Prime Minister.

According to him, reducing costs and improving productivity in existing facilities without optimization, the number not provided. Some of the released people will be moved inside enterprises, some created in the process of modernization of the new production, and the free market. "These people we will catch in small and medium industries, small companies and organizations, including utilities. The main burden of this work falls on the governors," he explained. This will create all the necessary conditions. There Is A Directive № 4. Prepared a new project for its renewal. He worked out in detail with all concerned, is agreed with the business community. The project, in particular, provides for the establishment of additional conditions and incentives for development of entrepreneurship, primarily small and medium-sized businesses.

In conditions of deficiency of internal sources and budget the task of creating new jobs will be solved by attracting foreign investment, and will involve a public-private partnership. "The enabling legislation, by mid-year in his development will be adopted regulations," - said Andrei Kobyakov.

Ensuring effective employment and social policy priority. "For the most vulnerable segments of the population are planning to create and implement a mechanism for unemployment insurance, to expand opportunities for retraining, re-qualification", - he added.

The head of government spoke about the peculiarities of investment policy. Critical priority is defined increase of efficiency of use of resources. "I mentioned the 106th Decree, which implemented a transition to a sectoral system of state support. Investment projects with state support will be credited by the development Bank. Such credit will be allowed the projects selected in the competition and within the framework of state programs. However, access to resources – regardless of their form of ownership "principle of equality", he said. - Other banks will lend without government support and Government guarantee. The selection criterion is effective payback projects, guarantees of return of invested funds".

For modernization of existing facilities is planned widely to use Chinese concessional loans. "At the first stage, working out the most promising projects in machine building, selected Chinese partners with the necessary technologies," he explained.

Small and medium businesses, state-owned commercial enterprises at a fairly comfortable environment through domestic banks may be provided in the order of 1 billion Chinese resources.

Active development will be used the funds of international financial organizations, primarily the world Bank and the EBRD, on which there is agreement. "Plus you have a base package of banking products of domestic banks and development Bank", - he added.

Special attention to Andrei Kobyakov on issues of social policy. He noted that the Government formed a powerful social benefits of public programs. Of the 20 state programs – 6 programs has a pronounced social character. Their funding will take two-thirds of the total volume allocated for the implementation of the package of government programs.

"The principal basis for social policy in the next five years will target the nature of social support, stressed Andrei Kobyakov. - The government will not waste resources, "to smear" all with a thin layer, and scatter to help those who really needs it".

The rejection of universal subsidization of the population and the transition to support target groups will provide an opportunity to strengthen support to the needy and to channel the released resources into needed social projects.

Social unit Programme is aimed also at ensuring the financial sustainability of the pension system and its adaptation to changing economic and demographic conditions, improving the quality and availability of services: education, health and others, creating conditions to ensure a decent quality of life.

A separate block in the Program presented to the regional policy. Here are all of the fundamental developments at the end of their active discussion in the Government with participation of heads of both Chambers of the National Assembly.

In the field of regional policy is planned to move from support measures applied throughout the country, measures to ensure priority development of the regions according to their specialization. These are areas where there are basic conditions for sustainable economic growth (engineering and transport infrastructure, labour, raw materials, location). Attracting resources and developing such areas, provided associated development of adjacent territories.

"Each region has its own regional characteristics and framework conditions, which we will use as priorities in regional policy, - said Andrei Kobyakov. For example, in the Mogilev region provides comprehensive socio-economic development of South-East region (the territory of 7 districts). The decree of the President of the Republic of Belarus from June 8, 2015 No. 235 "On the socio-economic development of South-Eastern region of Mogilev region". Having great development potential and advantageous geographical position of the border region will develop tourism, transport and logistics sector, trade. Also will develop the production of rubber and plastic products, machinery, chemical production, IT services.

In the Brest region plans to develop mining, furniture industry, transport infrastructure. "This area is the Western gate of the country, you will develop cross-border corridor for the construction of the Economic zone silk road "a Freight train from China to Europe", - said Andrei Kobyakov.

The perspective of Gomel region is the development of extractive and processing industry in Lelchitsy, Zhitkovichi, Petrikov, Yelsk and Mozyr regions. These areas are characterized by a diversity of mineral resources (oil, potash and rock salts, brown coal, combustible slates, peat, etc.)

Strategy of development of Minsk region is biochemistry and pharmaceuticals, manufacture of medical devices, fine chemicals, IT industry, automotive and electronics. Implementation of the State program on development of satellite cities provides for the establishment of such large objects as the Chinese-Belarusian industrial Park (Smolevichi), enterprises of FEZ "Minsk" (Fanipol and Dzerzhinsk), the arrangement of the area around the National airport, and upgrading of multipurpose sports and recreational areas (Zaslavl and Logoisk).

"We plan for any additional sources of development of regions, improving land, property and interbudgetary relations, stimulating these areas toward making money and involving in economic circulation of natural resources," said Andrei Kobyakov.

"On problem areas with city-forming enterprises will create a reserve of jobs, including by attracting strategic investors and promoting a private business, he continued. - The local industry will be taken individual decisions."

The head of Government also drew attention of deputies on the implementation arrangements for the Program. "The government plans to fully implement result-oriented approach through a set of state programmes," he said. To monitor their implementation and execution of key task monitor. Every year before 1 April the Government will form a summary report on the implementation of the programme of activities of the Government and of all state programs. "This will allow to comprehensively assess the results of development of the country and, if necessary, to take corrective decisions", - said the Prime Minister. On the proposal of the deputies of this report will be sent in the communication to Parliament.

To encourage leaders of government agencies formed a hierarchical system of key performance indicators for each member of the Cabinet, Governor and Chairman of city and district Executive Committee. This system includes also indicators of performance of state programs. Monitoring the implementation of quarterly indicators.

Also provides annual formation, together with the National Bank of complexes operational measures to address the socio-economic development. "This year, this document is accepted. I assume you are familiar with it," said Andrei Kobyakov.

"In a rapidly changing environment the Government's economic policy will be flexible, adaptive to external changes. The effect of the adopted measures will allow, according to our estimates, in the second half of this year to regain positive economic momentum, said the Prime Minister. - The whole complex under the Government's action Programme of measures creates the conditions for renewed economic growth and output to 2020, the year the GDP growth rate above the world average".

Andrei Kobyakov also answered the deputies ' questions. They related to the prospects of development of the construction industry, create new jobs in various sectors of the economy, projections of inflation and other relevant topics.

April 5, the Government's action Programme for 2016-2020 approved by the House of representatives of the National Assembly.


Council of Ministers of the Republic of Belarus