Aleksandr Lukashenko holds session to discuss state support measures of sport organizations

President of Belarus Aleksandr Lukashenko urged to revise a new draft decree concerning the issue of providing support to physical education and sports organizations which should ensure fair conditions for the operation of such organizations and effective distribution of state funds. The task was set by the President at the government session held on 29 January to discuss state support measures of sports organizations.

At the beginning of the session the President reminded that in May 2011 they had a principled talk about the efficiency of the system to support physical education and sports organizations. “Back then we came up with a certain formula to support clubs primarily via encouraging sports organizations to earn money on their own. It was decided to correlate state funding with the results of a specific club, a team or an athlete,” the President said.

In line with the decree local authorities had to control the use of state support in sports. “In addition to controlling they had to take measures to raise revenues from proprietary business operations via assigning relevant goals to sport organizations,” the head of state pointed out. The work to finance children’s and youth sports and develop the sports infrastructure was determined to be an important area.

“President’s Decree (No. 497 of 3 November 2011) concerning the provision of support to physical education and sports organizations which was active till the end of 2012 was passed to address these issues,” Aleksandr Lukashenko noted.

The President warned those present at the meeting: “I would not want this meeting to turn into yet another begging for money for sport organizations, clubs, and athletes for the forthcoming year or some forthcoming period. Get it out of your head right away, it won’t happen”. President urged the officials, who are responsible for sports development in the country, to present reports on whether the goals that the decree on support for sport organizations outlines had been achieved and what steps were necessary to improve conditions of support in this sphere. The head of state warned that he was not interested in the so-called “average temperature across the hospital”. “I would like and demand a detailed report based on the operation of each and every sport organization. You will not be able to make the overall picture look pretty using only some of the successful and resourceful ones,” he stressed.

“I have preliminary results of a planned audit of nine clubs in team sports and an audit of the decree fulfillment submitted by the State Control Committee. Frankly speaking, the results are not impressive,” the President remarked. “Not all the clubs are now ready for independent work to attract non-budgetary sources of funding. Hence the difficulties with developing the proprietary sports infrastructure and with aiding children’s and youth sports”. The President believes that results cannot be achieved without it. “Sports organizations should not count on being able to leech off the state funds all the time,” Aleksandr Lukashenko said.

Aleksandr Lukashenko believes that in turn local authorities have failed to secure proper control over the operation of sport organizations. “I am told that it is yet impossible to stop the vicious practice of having no one responsible for outlays,” the head of state noted. The President also emphasized that the Sports and Tourism Ministry should clearly outline priorities in sport development in Belarus and should control their realization at the local level. “It is necessary to arrange the work in a way to allow those, who demonstrate excellent sport results and good business performance, to be the first ones to get state support,” Aleksandr Lukashenko emphasized.

“In other words, I have reasonable doubts about the fact that sports officials had managed to make sure that all the organizations in the industry had fulfilled the obligations specified by the presidential decree,” Aleksandr Lukashenko said. In his words, taking into account the burden the state budget and Belarusian enterprises bear to support sports, the government cannot turn the blind eye towards the failure of sport officials to fulfill some of their obligations.

The session focused on the implementation of the decree concerning support of physical education and sports organizations. In general, support measures envisaged by the decree proved effective, first of all, in securing sustainable development of team sports in Belarus. At the same time, a number of bottlenecks have been revealed, in particular, in the implementation of the decree by financial aid recipients. The document was active by late 2012. Therefore, it is necessary to consider the possibility to prolong the decree and introduce certain additions and amendments.

Vice Premier of Belarus Anatoly Tozik said that Belarus has a rather effective model of state support of sport and related organizations. And decree No. 497 made it complete, simple and transparent. “We decided to allot companies and organizations to sports clubs and federations. By 2015 sports organizations should satisfy at least 50% of their needs using their own funds. They should prove potential sponsors their competence rather then demand state support,” the vice premier remarked.

The decree helped boost revenues of clubs and federations. However, not all the goals set forth by the decree were fulfilled. Thus, many clubs funneled at least 25% of prudential sponsor aid provided in accordance with the decree into the development of children’s and youth sports infrastructure. “The decree provides for an effective sanction. Tax bodies will audit 2012 results; and the clubs that did not provide 25% will have to pay all the taxes, on which they enjoyed preferences,” Anatoly Tozik said.

As for the goal to cover 50% of financing from the clubs and federations’ own activities, the vice premier suggested including funds the clubs get from international federations, including awards for competition results, in these amount. The government also offered measures to streamline control over the industry.

Anatoly Tozik drew attention of the participants of the meeting to the situation with the level of salaries in team sports clubs. “The clubs have every right to address these issues independently taking into account their achievements in sports. I do understand that salaries in these clubs should be high enough if the clubs are self-sufficient,” the Vice Premier noted. With this, the official believes that using the budget support and preferences it is illogical to get high salaries, and here there is a need for some limits or regulations.

According to the Chairman of the State Control Committee, Alexander Yakobson, in spite of a considerable growth (more than two times as against 2011) the clubs’ income in 2012, including from economic activity, there are certain problems regarding receipt and use of sponsor aid. Earnings from economic activity made just 13.5%. One in four clubs did not have any earnings from economic activity and did not seek to raise these earnings.

Aleksandr Lukashenko pointed out a number of failures of heads of sports federations who hold high administrative posts and have relevant resources. Boris Batura, Chairman of the Minsk Oblast Executive Committee and head of the Belarusian Volleyball Federation, agreed that “local authorities and federations should be tougher”.

Salaries account for almost a half of clubs’ spending. According to the State Control Committee, financial aid from companies and the budget was often used with violations.

Among other problems, Alexander Yakobson pointed out problems with development of children’s and youth sport which negatively affect future sports results. There are also problems with the number of foreign players in local team sports clubs. “Foreign nationals account for up to 30% of some local football clubs. In other words, we have not specifically focused on import substitution in sport yet,” Alexander Yakobson stressed.

With a view to systematizing legal framework regarding the operation of sports organizations, Alexander Yakobson suggested working out a unified legal act in stead of 170 legal documents regulating physical education and sport today.

Aleksandr Lukashenko gave an instruction concerning sponsor aid. “It is necessary to reconsider sponsorship. Sponsor aid of state-run enterprises should be given the same status as budget support. State-run enterprises, perhaps, provide the lion’s share of sponsor aid. It should be considered state support as well,” the head of state believes.

Grodno Oblast Governor Semyon Shapiro touched upon the issue of transfers and wages of athletes, noting that there is a certain fight for players between the clubs. It turns out sometimes that a foreign player costs lower and, with this, demonstrates a good play. The governor suggested imposing restrictions on the number of foreign players in sports clubs.

Aleksandr Lukashenko noted that abroad, in NHL in particular, they set certain spending limits on wages: “They have come through it already. I do not understand why the heads of our federations and the government do not bring this scheme in.”

“There will be no prolongation of the decree unless you regulate the issue. The wages fund should be well-defined and adjusted. Outstanding performance will bring you benefits from sponsors and other resources. If we do not tame this appetite for high salaries, not peg remuneration to something, we will not know how to spend this money. Neither sports schools nor the material base get anything in this case. We need a certain system here,” the President stressed.

“Our hockey and football players are top-paying while the result is almost the opposite,” Aleksandr Lukashenko said.

The President agreed that there is a need to cut on their number in the local team sports clubs. This issue, however, should be addressed individually in the teams which show good results at international competitions.

“There is one more thing: no foreign functionary in the clubs, be it coaches, their assistants, managers and so on. We have too many football and hockey players out of job. Do not we have our own specialists? Of course, they should understand they should work hard,” Aleksandr Lukashenko said. The President added that it did not pertain to national teams or, for instance, HC Dinamo Minsk that perform at the top level. However, they also should involve local specialists more.

Chairman of the Belarusian Football Association Sergei Rumas stressed that limits on sponsorship and wages should not harm the clubs. “If a club finds resources, sponsors, why should not it offer high salaries? But for sponsors and a good budget, BATE would not have been able to enter the group stage and perform so good. Today the documents say BATE has high wages of Br225 million. But there is no note there that up to 80% of the bonus they got for reaching the group stage has been spent on players’ salaries. These are not budgetary resources. But for this bonus, the salaries would have been three times lower,” he said.

The President said: “We should not forget that there are the material base and sports schools as a source for BATE’s future growth. We should take this into account too.”

The President stressed that the main thing here is to create equal conditions while the wages level should directly depend on the results.

Chairman of the Belarusian Ice hockey federation Yevgeny Vorsin, First Vice President of the National Olympic Committee Igor Rachkovsky, Chairman of the Supreme Economic Court and head of the Belarusian Basketball Federation Viktor Kamenkov, Vice President of the National Olympic Committee and President of the Belarusian Handball Federation Vladimir Konoplev, President Aide for Physical Education, Sport and Tourism Development Maxim Ryzhenkov and other also voiced their proposals at the government session.