GOVERNMENT EASES CONTROL OF ECONOMY

The Government of Belarus is replacing tough administrative regulation of the economy with a wider use of economic methods in order to achieve the results set for 2008, Prime Minister of Belarus Sergei Sidorsky said at a session of the Council of Ministers of Belarus on March 26. He noted that implementing the joint plan of action the National Bank and the Government seek to increase the GDP by 11% from 2007. “This is our guiding line. We should beat the projections set out in the socio-economic development forecast in which the GDP growth is defined as 109%,” the Prime Minister underlined.

In January 2008, the GDP grew by 8.3% from January 2007, and by 9.9% in January and February 2008 from the same period of 2007.

According to Economy Minister Nikolai Zaichenko, а surplus of trade in goods and services in January-February is expected to approximate $40 million.

According to preliminary data, in Q1 the surplus will make up $20 million, he added.

According to Nikolai Zaichenko, in January this year Belarus increased foreign trade by 59.2%, including export by 71.8%, imports 48.7%. A January surplus was equal to $33.4 million. Yet the minister cautioned against overestimating the result as the comparison is made against January 2007 when a deficit was $300 million as a result of the energy conflict with Russia. In 2008 a deficit is projected at $1.4 billion as against $2.7 billion in 2007.

According to Nikolai Zaichenko, it is important to assess accurately the changes in the export/import pattern. The analysis shows that an increase in the cost volumes of foreign trade in January was in many things due to the growing prices rather than rising mass of commodities, the minister added. As a positive example Nikolai Zaichenko noted the surpluses in trade of investment and consumer goods and also other intermediate goods (apart from energy products). The surpluses were equal to $108 million, $35 million and $7 million respectively. In January 2007 Belarus had a deficit with regard to these groups of goods.

The Economy Minister said that the goal to increase export of services is being met. In January the export of Belarusian services was 36.3% up, including transport 33.7%, tourist 69.5%, computer 72.8%, communication services 22.2%.

Some 149 projects will be implemented in Belarus with the help of foreign investments in 2008. The total cost of the projects is $1.6 billion, Economy Minister of Belarus Nikolai Zaichenko said.

According to him, Decree No. 168 of March 26, 2008 identifies the measures of the state support for legal entities who will carry out the most important investment projects by attracting foreign loans. The decree along with the legislative acts adopted in the country to improve the investment climate will help increase an inflow of investments to the Belarusian economy. It is necessary to involve the government bodies in investment processes as well, the minister added.

According to Nikolai Zaichenko, in terms of capital investment the country was not off to a good start in 2008. In January the growth of investments made up 97.1% over the same period last year. In January-February, the situation was improved: some Br3.2 trillion (12.1% up over the same period last year) was invested in the capital assets to develop economy and social sphere. A significant contribution was made by the Energy Ministry (investments were-35.5% up), the Communication Ministry (53.9%), Transport Ministry (71.2%). At the same time, the Industry Ministry, the Ministry of Construction and Architecture, Belneftekhim, Bellegprom and Belgospischeprom Concerns and also Minsk and the Minsk oblast did not manage to meet the targets. In Q1 2008 the investments are projected to increase by 12% over the same period 2007.

According to the Economy Minister, in 2008 capital investments in Belarus are projected to up by 23%. At the same time, if the Industry Ministry and the Ministry of Construction and Architecture fail to reach the 2008 projections Belarus will not be able to meet the 25% growth target, Nikolai Zaichenko noted.

Belarus needs to increase GDP without raising energy consumption, Prime Minister of Belarus Sergei Sidorsky said at a meeting of the Council of Ministers. According to him, the Government has taken all necessary energy-saving measures and programmes. Yet the results in January-February show that the GDP energy intensity has not reduced. Sergei Sidorsky reminded that in 2008, the GDP energy intensity is projected to go down by 8%.

The Government took into account the arguments of the energy ministry and set the Q1 target at plus 1.5%. However in January the energy intensity was 3.9% up. Thus, the GDP energy intensity has been growing faster than it was expected, the Prime Minister said. “As always, the explanations for this are more than enough,” the Prime Minister said. “But some regions, ministries, concerns seem to do not enough to improve energy-efficiency,” Sergei Sidorsky said. He required exposing shortcomings and making proposals on addressing the energy-efficiency problem.

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