Visit to SOAO Kommunarka

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The project to modernize SOAO Kommunarka gave an opportunity to boost the output of products, Belarus President Aleksandr Lukashenko said during the visit to the enterprise on 18 March.

The head of state was informed about the fulfillment of his instruction to develop the enterprise, the industrial, economic and financial situation, and development prospects. The President was also informed about the measures to modernize the enterprise and raise the competitiveness of products. The President toured the factory’s workshops, inspected the production of new confectionery products using modernized equipment and saw the exhibition of products.

Kommunarka Director General Ivan Danchenko said that the renovated factory is equipped with new technological lines, there is a new chocolate workshop and a modernized confectionery facility. Apart from that, Kommunarka replaced communication networks.

The enterprise has organized the direct system of purchases and has enough raw materials.

The enterprise pays special attention to expanding the network of specialized shops and concluding new contracts with foreign partners. Belarusian confectionery products are exported to 17 countries, Russia is the main trade partner.

The President stressed that it is essential to expand the range of products and keep the quality. The director of Kommunarka assured that it is the priority for the factory. In Q1 2016, Kommunarka hit all the main indicators, raised export revenues, and reduced the volume of finished products in store. Therefore, thanks to the attention of the state an unprofitable factory turns into a profitable one.

The President paid special attention to trade and logistics issues. The head of state also noted that Belarusian manufacturers should use the best practices of their foreign colleagues.

The head of state also met with the personnel of the enterprise, answered their questions regarding the development of Kommunarka, the forthcoming reform of the pension system and changes in the system of payment for utility services.

Aleksandr Lukashenko remarked that 95% of the modernization plans had been fulfilled, with 5% left to be done.

The head of state said that the company was in a dire state in the past. “In essence it didn’t exist, I am sure of it,” Aleksandr Lukashenko said.

The head of state said that the company was in a dire state in the past. “In essence it didn’t exist, I am sure of it,” said Aleksandr Lukashenko. “No private owner would go for the kind of modernization that has been accomplished,” said the head of state. In his opinion, the government should continue keeping an eye on enterprises in strategic industries such as food production.

The President said it is important that thanks to the close attention of the state the Belarusian confectionery factories Kommunarka and Spartak have been able to survive. Their products are now well-known abroad thanks to the good quality based on natural ingredients. The fact that state standards are still in effect in Belarus has a lot to do with it.

Speaking about Kommunarka’s past, Aleksandr Lukashenko stressed that, unfortunately, some investors tend to think more about their own profits instead of interests of the company personnel. He explained that these considerations had been behind Aleksandr Lukashenko’s previous decision to exclude the unsavory investor from Kommunarka’s operation.

The head of state spoke at length about the preservation of jobs at the enterprise. Since Kommunarka primarily employs women, then naturally the jobs should be preserved.

Aleksandr Lukashenko pointed out that times are difficult now, yet there is no crisis or catastrophe. The difficulties will go away sooner or later. “It is necessary to stop whining and get down to work. The government should stop blabbering about private owners as the solution to all problems. It is necessary to live and grow now,” the head of state was convinced. “There is no money to spare, this is why money has to be used rationally in a businesslike manner.” Aleksandr Lukashenko also noted: “You have to bear in mind that the situation has changed drastically everywhere. Our partners in Russia are even in a worse situation than we are. I’d like to thank them for helping us.”

The President spoke in positive terms about the changes Kommunarka had undergone, about the modernization effort that had allowed the company to increase the output and quality of the merchandise.

The head of state believes that order and responsible attitudes are what the successful operation of enterprises and the country relies on. Addressing Kommunarka’s personnel, the head of state noted: “You should respond to my exacting attitude to individual civil servants, businessmen, and labor collectives more calmly.” The President said he believes that it would be very easy to let things slide in the country and it would be very expensive or impossible to get things together again. As an example Aleksandr Lukashenko mentioned the situation in Ukraine. “This is why we need order and responsible attitudes above everything else,” Alexander Lukashneko said.

The head of state stressed that Belarus will create new jobs for good specialists, future specialists. To be competitive on the labor market a person needs to work hard to enrich knowledge and skills, be focused on professional improvement, the President is convinced.

According to the head of state, Belarus will not forget about people who have been working for 20-30 years. Such people will work till their pension age and will be able to work further. But there will be strong competition on the labor market, Aleksandr Lukashenko said.

Speaking about modern jobs, the head of state said that the creation of super enterprises will help Belarus raise the competitiveness of products on the market. “If we do not create anything, we will not be able to sell anything on the market tomorrow,” he added. As for Kommunarka, this factory has all material and personnel resources for efficient sales, the President noted.

Aleksandr Lukashenko assured that no one will be unemployed in Belarus and stressed that 50,000 jobs will be created in Belarus in line with his instruction.

Aleksandr Lukashenko said he is in favor of gradually raising the pension age by three years.

“I think that we should do it gradually and in a calm manner. I am in favor of raising the pension age by three years, by six months every year. As a result, the retirement age will be increased by three years in six or seven years,” the head of state remarked.

Aleksandr Lukashenko said that people retire at 55 and 60 only in Belarus and Russia. “People should not think that if they reach the pre-retirement age they will be fired. Those who do not work well will be fired regardless of age. Everybody needs to work hard today. But if a pensioner can work, if he is a good specialist and can train a new worker to substitute him, he should be paid extra money as a mentor because it costs a lot to train a new specialist,” the President remarked.

The head of state explained why the country has to raise the pension age. “People’s salaries are not high, and they are not increasing throughout the country. If salaries are not increased and prices edge up even by 0.5-1%, living standards are declining. What can we do? Reduce pensions? We cannot do it. We cannot hurt people,” the President said.

“As a parent I think that we should not lay this burden on our children,” Aleksandr Lukashenko added.

The President stressed that he does not see big problems with the creation of jobs. “We will create new jobs and we are doing this. It is essential to encourage directors of enterprises to create new jobs, while we will set up small, medium-sized and large enterprises where there will be new jobs,” the President stressed.

Aleksandr Lukashenko also focused on the structure of the pension system in Belarus. The President said that some time ago he was suggested to replace the existing system with the system of pension savings. He did not support this initiative and permitted to do it on a voluntary basis. “Perhaps, in the future the society will be prepared for the replacement of this system with the system of pension savings,” the head of state noted.

Aleksandr Lukashenko commented on one more high-profile issue – the increase in utility rates. He said that the problem of utility rates will be resolved for the benefit of the people.

“We will do things in a way that benefits the people. I swear! If it cannot be done, I will tell you about it and will explain every figure and indicator. I will be on your side anyway,” noted the head of state.

Aleksandr Lukashenko said that after the State Control Committee reviewed the cost of utilities, it turned out that the nation pays 40.2% of the cost instead of 30%.

“Belarusians will pay 50% of what utilities cost by the end of the year. We are not going to raise the rates and take more money from you. Instead utility service providers will have to cut down their prime costs and expenses,” said the head of state. “This is what you will get for now. In the near future I will sign the relevant decree although I have already given verbal instructions.”

“The formula is a simple one: everything must be paid for. If you don’t pay the full price, then someone else has to pay the rest for you,” stated the President.

“Where are we going to get the second half? For now the state budget will cover the second half as subsidies to those who sell utilities to you: electrical companies, water companies, gas providers, garbage removal companies and so on,” said the President. “Belarus is a people-oriented state. We adopted the policy 20 years ago.”

“We would like [Belarusian households to pay] 50% by the end of the year, 75% next year, and 100% in two years,” noted Aleksandr Lukashenko. “Let’s leave the year 2018 alone for now. We have yet to get there. Once we get there, we will see how much you pay. For now you are going to live with the utility rates you have now. We have adjusted some figures a bit.”

The President noted that next year the decision on utility rates will be made bearing in mind the economy’s performance. “We may raise utility rates by 2% instead of 25% or we may even leave them alone. We’ll see,” said Aleksandr Lukashenko. The head of state noted that Belarusians are often careless about saving resources. “People will start saving resources when they cost a pretty penny. But we have agreed to keep the rates as they are for now,” added the President.

He said that the Belarusian utility services system will be modernized. The President noted that the first steps have already been made in Minsk. As an experiment so-called housemaster services are now available in some areas. “And people are pleased with it. Certainly, these masters have yet to reach professional levels. But I think they will see very soon that it is a profitable business. If they do things bad, they will have to redo them tomorrow. Which is bad for the housemasters. This is why they will be motivated to do things well to avoid having to redo them repeatedly,” believes the head of state.

Speaking about the regulation of prices of socially important goods, the President emphasized that control over prices will stay in place in Belarus.

According to the President, in Q1 2015 prices in Belarus already went up by over 4% on the average, with housing and utility services contributing a lot.

Aleksandr Lukashenko stressed he was primarily concerned about rising retail prices. The government will crack down on those, who raise prices without justification, he warned. “If we see it — and it is a very simple thing to do — we will put foot down hard just like we did a short while ago when retailers were intent on raising prices in anticipation of the New Year and 8 March in some cases, acting on the belief that people will buy everything,” said the head of state. Aleksandr Lukashenko remarked that privately owned retailers are usually the ones to indulge in such practices. “But if we shut them down for a week, they would lose thousand times more than what they could gain by raising prices. Then they stopped. They understood that the government is not kidding,” said the President.

Speaking about other kinds of merchandise, the President noted that manufacturers and retailers are reducing prices on their own to match consumer demand.

The head of state stressed that a powerful system to control pricing practices had been created in Belarus and antimonopoly laws are available.