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Lev Margolin: Entire industries may be lost

Lev Margolin: Entire industries may be lost
Lev Margolin

Only for the first 2 months of the year losses of Belarusian enterprises increased 3.3 times.

Losses of Belarusian enterprises are growing rapidly. In January-February 2015, 1 874 organizations made losses or 24.1% of the total amount of organizations taken into consideration in a current characteristic (in January-February 2014 - 1 479 organizations or 19%). Aquaculture sector tops the list of the most unprofitable enterprises (73.7% of all enterprises in the sector). The second place with 35.9% is taken by industry, the National Statistical Committee of the Republic of Belarus reports.

What do these losses prove? What are possible consequences for the country? The economist Lev Margolin commented on the current situation and its further development to the site ucpb.org.

"For a particular enterprise a loss ratio means the loss of turnover funds (if it had them) and gradual immersion into debt pit - Lev Margolin says. -It all ends either with bankruptcy followed by enterprise liquidation or readjustment (rehabilitation), when the state redeems enterprise's debts at the expense of budget funds. The last scenario does make sense only if an enterprise has a clear plan for future. Otherwise, everything recurs.

At the state level everything is much more serious. If the state can endlessly support the fish industry because of its small size, in case with industry the situation is much more serious. It is about the loss of entire industries. And it will be almost impossible to restore them in future. The most difficult situation is in light industry, machine building, and professional equipment. When the regime changes the light industry can be based on a new ground (private property). The other two industries may be lost".

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