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Report of Belarus’ government, National Bank, oblast executive committees, Minsk City Hall

2 March 2018

“Five years have passed since our previous meeting in a similar format. Just like the last time, this meeting is held in the middle of the five-year period to coordinate efforts on time and, maybe, to revise certain objectives,” Belarus President Alexander Lukashenko said as he heard out the report of the government, National Bank, oblast executive committees, and Minsk City Hall on Belarus’ economic performance in 2017 and the efforts to ensure sustainable economic growth.

Alexander Lukashenko remarked that the 2017 statistics is known and all participants of the meeting are ready to report on the achievements in their sectors. “There are many talks on progress in the government. However, the main goal of the today’s event is not to discuss current figures. Today we need to find out what stays behind the average figures, evaluate the qualitative side of these achievements,” the President emphasized.

The head of state asked about the fulfillment of his instructions to improve the living standards of people. He also asked what the government, the National Bank, oblast executive committees and Minsk City Hall have in store to ensure the sustainable economic growth of Belarus with the pace higher than the global average.

“I want to understand if the achieved results are the beginning of positive trends or a temporary splash. What is behind the results – a cyclic revival, favorable external conditions or qualitatively new growth?” Alexander Lukashenko wondered.

The President stressed that, according to certain officials, a miracle has not happened yet. Higher oil prices and the revival of the demand in Russia had a positive impact on the economic situation in the country.

“I do not want to focus on figures today. Judging by the information that I get I see that people do not feel improvements yet. Half of the Belarusian people think that the social and economic situation continued to worsen in 2017, about 40% of people did not see any changes. Clearly, this is an opinion poll, of course, it depends on sentiments, but opinion polls are comparable, and we compare them. Members of the government, local authorities are more focused on attaining figures. Figures became more important than the essence. Such approaches are short-lived resolutions, and people will not benefit from them,” the Belarusian leader said.

The head of state added that he had familiarized himself with the report of the government on the results of the year and the fulfillment of his instructions.

He urged Prime Minister Andrei Kobyakov to pay more attention to certain issues. “We have gathered together to discuss these issues and address crucial tasks. If the government does not see problems, we will try to specify them.”

According to the head of state, over the past seven years the world’s GDP has increased by 25%, while Belarus’ GDP growth has not even reached 6%. The President is convinced that the financial crisis and market environment, viewed by the government as the major causes, are not the core of the problem.

“If we grow slower than others, it means we are lagging behind. We are lagging behind in development, technologies, and, of course, living standards. These are not the only things I am, as President, concerned about. We cannot ignore the processes which have already become stable inside the country. I am talking about interregional inequality,” said Alexander Lukashenko.

The local social and economic situation was thoroughly examined following the head of state’s instructions. The results reported to the President were the major reason for convening today’s meeting.

“The country, its regions are developing unevenly. In fact, only Minsk Oblast and Grodno Oblast are making headway. Over the past seven years the gross regional product of Minsk Oblast has exapnded by 28% and that of Grodno Oblast by 13%. The other oblasts are in stagnation. For the last seven years, Brest Oblast increased its GRP by only some 5%, Gomel Oblast – by 3%, Vitebsk Oblast – by 2%, and the gross regional product of Mogilev Oblast has shrunk,” said Alexander Lukashenko.

In his words, any serious differentiation always leads to the divisions in the society and large-scale problems in the country. “The government and the oblast executive committees have been tasked to secure equally comfortable life in any city and oblast across the country,” the head of state stressed.

Setting up new enterprises is the best way out, the President said. “For this purpose, our state accumulates funds for investment projects. The prime minister is expected to report on the implementation of the current investment projects, the prospects for the development of regions in the country,” the head of state said.

“It is extremely troubling that the decisions of the head of state are implemented in a distorted way. My requirement is to have more high-performance workplaces. They are the basis for growth, they are a source of earning decent money not just getting salaries as it was in December. I have not delved into the way the government organized the execution of my orders, but the results are no good,” Alexander Lukashenko said.

The President noted that high performance workplaces account for approximately 5% of the newly created jobs. “At the level of district and city administrations, as I was reported, they even did not hear the words ‘high-performance workplaces’. They see the task as “retain and not dismiss’. Not firing is also important. People should have a place of work,” Alexander Lukashenko said.

He recalled that at the end of last year a large business forum was held, a package of decisions including those stimulating employment was adopted. “But two months later some people in the government started to assume some things. For example, they decided that if a person is self-employed in some simplest kind of business, then he should pay a full-cost utilities bill. As you understand people have started complaining. Is this is an intentional sabotage of the President’s decisions or misunderstanding?,” Alexander Lukashenko asked.

According to the head of state, this does not characterize the work of the government on economic matters in the best way.

“I am cautious about the positive results that we achieved in 2017, because I see their real price. The GDP has expanded but we have not made up for the losses of 2016 alone. We still need to climb up 4% to reach the results of at least 2014,” Alexander Lukashenko said.

The President noted that the state debt is growing faster than the economy. “We paid off $2.3 billion but took out nearly $3.5 billion,” he said.

"The loan burden of the real economy sector is growing. God forbid you even start thinking about shifting it to the budget. I have started to hear you talking about ‘fiscal risks’ more often. If this is you gently preparing me for the decision to pay for the mismanagement of the enterprises from the budget, at the expense of doctors and teachers, then you better tell me about this right now and go home. Enterprises must earn money themselves and pay taxes to the budget,” the head of state noted.

Salaries in the country should exceed Br1,000 within a year, the President stressed. “I know what was behind the historically low level of inflation and almost Br1,000 salaries in December. You almost forced enterprises to give this Br1,000 at the end of the year. But almost 75% of the population did not see such salaries. The salaries of the half of the population are lower than Br650. 10% of people could not earn more than Br300. These people are living in the regions where there are no employment alternatives,” Alexander Lukashenko said.

The head of state also emphasized that he had not seen a 2018 salaries growth diagram. “According to the information that I have, no regions confirm that they reach or keep Br1,000 salaries in 2018. It means that you are unable to ensure such salaries right now,” Alexander Lukashenko said.

The urged the governors and the prime minister to be more concerned about people’s problems. The President’s demand to raise salaries in the country remains in place. “I have already warned you. I understand that the salaries made up about Br1,000, and they fell in January because the New Year and Christmas holidays. February is a short month. But your task is to restore the level of Br1,000 by the end of Q1 and exceed it within a year,” the head of state said.

According to Alexander Lukashenko, it is essential to first of all increase the salaries of teachers, doctors, workers of kindergartens, social security sector and culture.

According to the President, rising prices are the number one problem for the nation. “People don’t really care what the average inflation in Belarus is. They make their conclusions by looking at prices for the things they buy every day. And those prices rise by at least 8-10% per annum. If we add prices for services to the mix, the price hike will be even higher instead of 4.5% or 6%. This is why rising prices are still the number one problem for the nation. Just like four months ago I would like the head of the central bank to reduce inflation expectations.”

The head of state said he wanted an objective evaluation of last year’s results during the conference bearing in mind the essence of his demands. According to the President, instead of simple statistics he wanted the situation analyzed and conclusions drawn about the problems that impeded further progress. Alexander Lukashenko stressed he would like to hear a distinct program of further actions the government and the central bank would take to tackle the tasks that had been set and the issues that had been raised.

The President stressed that the government should change its style and methods of work in addition to getting rid of disconnect in goals. “I am very concerned about the style and methods of work of the current government. They’ve inherited virtually all the drawbacks of the past while leaving the best things behind. Your behavioral model completely fails to match the matrix of tasks of the power vertical and goals of the five-year plan. Every one of you should execute without fail all the instructions given to key officials of the power vertical.”

The head of state pointed out that all the government agencies should understand really well the importance of coordinated actions in tackling the tasks Belarus faces. “Top-ranking officials bear a greater responsibility than members of the government for the state of affairs in the country. The same is true for the oblast governors. This is why let’s pull together in order to ensure the country’s development instead of looking askance at the government,” said Alexander Lukashenko. “We must not have any disconnect as we work to fulfill our tasks.”

Alexander Lukashenko urged a radical improvement of the quality of state administration. “The Belarusian economy has always worked and will work in complicated and difficult conditions. We have no insurance policy against that. Aggravated protectionism, blatant violations of international trade rules, fight for access to technologies, resources, and target markets are the new reality and the conditions, with which we will have to live,” noted the head of state.

The President added that the world is becoming more nationalistic and every country wants to survive on its own. “Bear these factors in mind in all the plans,” he said.

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© 2018, The Press Service of the President of the Republic of Belarus