International Congress of Belarusian Studies at a Glance

International Congress of Belarusian Studies at a Glance

Analysis of the situation in the Belarusian economy and possible ways to improve it have long been a subject of research and analysis of international financial organisations. Since 2010, they have offered the government more than 25 analytical documents with conclusions and recommendations for public sector reform. Participants of the 6th Congress of Belarusian Researchers held in Kaunas tried to sum up this experience.

The organiser of the economic section of the Congress was the European Research Association Oikonomos that unites specialists from Belarus, Poland, Russia, Georgia, Moldova, Lithuania, Germany and other countries. They presented their vision of the economic situation.

Employment. According to researches, employment in our country grew in 1990-2010 and then began to decline. At the same time the IMF and the World Bank has repeatedly warned the authorities about the need to reform the public sector. The country’s population over the past 25 years has decreased from 10 to 9.5 million people, while the number of employed in the economy dropped from 5 to 4.5 million, or from 50% of the total population to 42-44%.

The workforce in agriculture in Belarus has been reduces by half – to 10%, broadly in line with global trends.

The share of the employed in the processing industry of Belarus fell from 42% in 1990 to almost 1/3, including in mechanical engineering – from 49% to 29%. However, the number of the workforce in service industries increased from 38% to 59% of the employed population.

This structure of employment is consistent with the international practice. But behind the numbers and trends are qualitative characteristics of the economic development of the country and the living standards.

According to analysts, the employment situation in the services and manufacturing has frozen and since 2010 “has been moving in a circle”. This is due to uncertainty in the choice of priorities for economic development. Services require a reorientation of attention of the state, as well as reform in education. But the manufacturing industry still absorbs the lion’s share of the state aid allocated for modernisation and patching financial holes. Meanwhile, traditional distribution areas of our produce, especially Russian, are narrowed, while new ones do not compensate for these losses.

There is a significant time lag between changes in the economy and employment figures. In reality, the figures may be somewhat different. It should also be taken into consideration that unemployment is constrained due to underemployment. Data by National Statistical Committee of Belarus (Belstat) on the growth of the number of redundant workers with almost unchanged employment makes analysts suspect that the unemployment criteria are imperfect and it has a high latent component.

Pension system. Researchers suggest first of all deciding what and how to reform. In their opinion, raising the retirement age and the tax for unemployed are not reforms, but attempts to save the life of the existing solidarity system. But the demographic situation will still force to abandon it, despite all the tricks, selective benefits and state subsidies. The ratio of pensioners to the employed population today is one to two. This is a critical figure. After all, there are other social groups subsidised from the state budget, and education and medicine also lie on the solidarity system.

As participants of the forum emphasised, talking about the reform of the pension system is useless without changes in other areas. It is necessary to find points of drive for economic growth, so that they stimulate growth of incomes and payments to the budget, as well as increase in government spending on social programmes, including the pension system. The stability of the pension system is seen by three sources: voluntary contributions of workers themselves, employers’ mandatory contributions, and personal savings.

Both the operating solidarity system and defined contribution system, the state may need to create, depend on inflation processes, on public administration system, and the level of socio-economic development.

Factors of reproductive choice. According to BISS researchers, the key to the growth of the working age population is the level of readiness of the Belarusians to have more than two children in the family. Here an important role is played by state support for young families, affordable housing, procedures for obtaining leave for childcare, etc.

Since the main burden of care and upbringing of children lies on women, their desired number of children in a family is less (no more than two children, depending on age group) than the average, while for men it is closer to three.

For implementation of potential of birth rate increase in the country, the economic situation and prospects for its improvement are important. Unfortunately, they still look rather vague.

Support of state-owned enterprises accounts for almost 8.9% of the budget, as the researchers say. The number of loss-making enterprises increases. Meanwhile, about 60% of state-owned enterprises are inefficient, but their support costs are rising, which in itself is a deterrent to the reform of the public sector. No less of a problem is caused by dominance of the Russian market in the export. While previously Belarus was the “assembly shop” of the USSR (which is considered to be an argument for the continuation of strong relations with the Russian Federation), today this “shop” is outdated. But its modernisation requires tools and technologies. Russia’s economy is also far from being advanced. The trade turnover between the countries has been reducing for several years, and this trend may become long-term. The challenge is to find new partners and markets, what the government is focusing on today.

International relations. There are countries willing to cooperate with Belarus, said Nodar Grdzelishvili, Dr. of Economics, Institute of Economics of Regional Development and Strategic Management (Georgia). Thus, our country could offer Georgia its high-quality food, advances in the field of agribusiness, construction, and farm machinery production. Today, 30 companies operate in Belarus with the participation of the Georgian capital, and possibilities of establishing joint ventures with Minsk Tractor Plant are explored.

Researchers urge Belarus to more actively participate in regional and interblock integration arrangements, including the EU, EFTA, SACU, ASEAN, etc., which can provide access to the markets of the countries – participants of these blocks and participation in cooperative relationships. It is important to take into account interests of sensitive sectors, establish transitional periods and have the opportunity to review the agreement on the basis of periodic monitoring.

Participation in unions has interdependent character, sometimes constraining individual participants. The world economy is a tangle of inter-regional relations, which is not so easy to “pierce”. Entering new markets is hampered by global overproduction of goods. The researchers note that mass production becomes more efficient and mobile, while high-performance equipment is not always cost-effective. Therefore, the question of technological re-equipment of our enterprises should be approached carefully, so that tomorrow it will not become expensive lumber.

Innovation should be not only technological but also in production. What it involves is the innovative thinking. Revision of existing resources of the country is required, as well as deep understanding of the place that we intend to take in the world. It is necessary to determine whom we are going to catch up with and how, in what, considering global trends, we lead or can become leaders.

IT-services are called the leading branch in our country, so the challenge for developers and programmers can be our own new IT products that are in demand on world markets.

There are 160 types of services in the world, but Belarus gives about 10 for other countries, as participants of the Congress mentioned. Therefore it should be determined which services our country can provide to its neighbours and other countries in the era of globalisation.

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The Congress hosted the round table “What is the Belarusian research and what should it be?” Its participants believe that the study of Belarus, its individual spheres of life and activity can be attributed to objectives of social and economic marketing of the country, i.e., analysis of available resources and manufactured products, goods and services.

Studies of Belarus provide awareness of the real situation and existing problems. Understanding of these issues helps to make a difference, and their solution gives evidence of the viability of the country and its citizens.

Экономическая газета

21 October 2016 Association News, News


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