The Belarusian economy is doing quite well considering the challenging geopolitical conditions, Belarusian Prime Minister Aleksandr Turchin told the media following his report to the Belarusian president in Minsk on 23 September.
«If we look at the global, geopolitical conditions, we are doing quite well. The economy is growing. Perhaps not at the pace we would like. But, in my opinion, we have reached a certain balance», the Prime minister said.
He noted the work of the agricultural sector this year. The country expects a record high grain harvest. «We expect one of the biggest harvests in history. The livestock sector is expanding. We have the products, processing capacity, and export channels in place», Aleksandr Turchin noted.
He described supply diversification as the government’s most challenging task, but noted that it is being gradually addressed. The growth rate of exports of goods and services this year is 1.2%. “The accelerated growth rate of service exports is certainly encouraging. Developed economies typically have a higher share of services in their GDP than Belarus,” the prime minister said.
Aleksandr Turchin highlighted promising sectors like tourism and IT, which are among the government priorities, noting that developing the services industry as a whole is a key goal.
When asked about price stability, the prime minister noted that the traditional concept of an equilibrium price closely aligns with the president’s concept of a fair price formula. Aleksandr Lukashenko pointed out that pricing fairness must extend to both the producer and the seller, not just the buyer. «In general, it is an extremely difficult task to find a price that would satisfy all three parties», he said.
The Prime minister recalled that in April, the government made a decision to adjust the procedure for regulating producer prices. The key goal was to ensure domestic producers could maintain profitable production. Using the example of meat and dairy enterprises in Slutsk, he reported that their profitability level had reached 6%.
«The enterprises have shifted from loss-making to marginally profitable production. This is clearly a fair solution in my opinion. Even a 6% return is insufficient for major investment projects. But we recognize this is adequate for the present situation», he said.
The price structure also includes the factor of salary growth. «We have real salary growth of about 10%. Nominal growth is much higher, but salaries are part of the cost of every product», Aleksandr Turchin noted.
«In my opinion, finding this balance, this equilibrium, this fairness is the government’s main task. Today, the government controls the processes taking place in the country», the Prime minister said.
According to Aleksandr Turchin, it is difficult to characterize the current state of the economy in definitive terms as the current environment is very challenging. There is the sanction pressure, new unfriendly decisions and actions against Belarus, such as Poland's border closure. «Every day we expect another, as I call them, «black swans». It seems to me that a calm life is definitely a thing of the past. Various problems will continue to arise. Our task is to deal with them effectively. The government's responsibility is to make sure there is no collapse and that the growth (of the economy) is balanced. Growth cannot be achieved at the expense of other indicators», the Prime minister said.
«To say that we have no problems would be incorrect. But the government's goal at this stage is to ensure balanced economic growth», he emphasized. For example, to ensure that the growth of industrial output is not accompanied by a rise in warehouse inventories and accounts receivable.
«The government is working very intensively on this track, collaborating with our partners from the EAEU and the Russian Federation. There are a number of agreements that allow us to look forward with a certain degree of optimism», Aleksandr Turchin emphasized.
He noted that there are some problems with certain enterprises and industries that previously received state support and are now failing to meet their debt obligations. The government is solving these problems systemically. Work is currently underway to develop strategic solutions, primarily concerning Bellesbumprom and Bellegprom concerns. There are no simple solutions here, the prime minister emphasized. According to him, corresponding proposals are planned to be submitted to the head of state during the year.
Aleksandr Turchin specifically focused on issues of supporting farms. As the Prime Minister noted, private farmers are offered loans on comfortable terms in Belarus. They are primarily designed to support the farming enterprises that have bad harvest this year due to weather conditions.
Speaking about the fair pricing formula, as an example Aleksandr Turchin mentioned the bad apple harvest due to unfavorable weather conditions. For instance, one of the private farming enterprises in Molodechno District that the prime minister has recently visited reports an apple harvest as little as one tenth of last year’s.
«But there are costs and constant outlays. You cannot leave the orchard unattended. In other words, you have to spend as much as last year but you have 300 tonnes instead of 3,000 tonnes», the head of government made an example. «This is why it is obvious that the prime cost of apples cannot be what it was last year. A farmer has invested his labor in apples and he needs to at least break even without reaping crazy profits».
«We understand that on the whole, the country will harvest as little as about 40% of last year’s apple harvest. The government has made all the decisions. Among other things we are launching a banking product for private farmers. So that businessmen in a complicated situation could take out loans on comfortable terms by the next year in order to last till the next harvest», the Prime minister stated.
