Leanid Zaika: Reason for industrial output decline is Customs Union

Not only the stockpiles must be sold out, but enterprises restructured.

This is what an economist Leanid Zaika told the charter97.org web-site as he commented on the decline in Minsk’s industrial output by 19%.

“The problem of the industrial output drop is common for Belarus and Russia. We have created very bad conditions for mutual barter. The creation of the Customs Union was a huge failure. Belarus’ exports have fallen by 25%, but they have also fallen in Russia. The Customs Union’s officials are silent now. They should have been alert already back in February, and the representatives of Belarus and Russia should have gathered and solve the issues directly, because it is bad in Russia and Belarus alike. The Customs Union countries have the worst exports indicators”, - the scientist noted.

The expert highlighted that the problem is not to simply sell out the stockpiles.

“This is how a stockkeeper Vasia Pupkin sees the situation, who once graduated from a machine building vocational college. Professional economists would say that the problem is in the inefficiency of the enterprises themselves. This is the indicator of a crisis in Belarus’ industry and it is important not only to sell out the stockpiles, but to restructure the enterprises. Instead of focusing on the stupid problem of the Customs Union’s technical regulations, they should better create the conditions for increasing the efficiency of processing industry enterprises in Belarus and Russia”, - the head of an analytical center Strategy is convinced.

According to the economist, there is an industrial crisis in Belarus and in Minsk in particular.

“The GDP and salaries have grown, but the enterprises cannot work. That is why industrial policy should be in the center of attention, but they discuss fishing, how many slobs do not pay taxes in the country and other things. The government should deal with the industrial policy. And not a simple “modernization”, which is yet another propagandistic slogan. An industrial policy includes restructuring policy, labour policy, marketing and the policy related to an enterprise’s financial stabilization. That is why there are complaints about the government itself. Piotr Prakapovich understands “modernization” in the way that stockpiles should be sold out, new engineering tools be bought and assembled, so enterprises could again produce what would not be purchased. It is clear that this is absolutely inefficient”, - Leanid Zaika concluded.

We would remind that only within the latest month the decline in Minsk’s industrial output accounted for 4.8% as compared to July 2012, whereas the seven months’ decline was 19%.