100 Thousand Employees "Left" The Industry

Machine engineering in Belarus is suffering a serious crisis.

This is indicated by the analysis of the macroeconomic data published by Belstat in the book "Industry of the Republic of Belarus" (2016), analysts of CASE Belarus note .

According to President of CASE Belarus Serge Navrodsky, "the current crisis in Belarus as a result of the Russia-directed market proves that machine engineering will have to be reformed sooner or later."

"This is about two directions. First, the creation of more favourable conditions for small and micro-producers of engineering products, mainly it touches upon investments (for example, to launch a program of high-tech investment for the sector through the Development Bank or the World Bank), or access to international capital, as well as their inclusion in the alternative Russian chain of deliveries at national, regional and international level. To understand the scale of the problem, it's needed just to take a look at the following figures: the share of small and micro enterprises in the engineering industry in 2015 was 85%, and their share in production volume was only 16%. Although it is worth noting the positive dynamics over the last 5 years: the share of small and micro-enterprises in production increased by 6%.

In general, they are getting smaller, as the number of employees in one company fell in seven years from 158 to 98 people on the average, and this is positive trend. Second, there is an urgent need to restructure large companies to reduce their costs, provide access to new technologies and new export markets. There is no single solution and most likely each company will have to be considered as a single unique case: someone will have to look for a foreign investor, someone will be divided into parts and sold, and others will have to give access to the public stock market", the expert says.

According to the data presented on ekonomika.by, net profit in mechanical engineering in real terms decreases for the fourth year. A net loss was recorded in last 2 years. In 2014 the net profit equaled to minus 4.7%, in 2015 it amounted to minus 15.2%.

In addition, in 2015 the contribution of engineering in total exports of goods and services hit all-time low - 9.9%. In 2011-2013 the average value of this contribution was 13.6%.

The number of employees engaged in engineering has been declining for ten years. In 2006 there were 325 000 of them, in 2015 - 228 000. Thus, in 10 years the number of employees in engineering dropped by almost 100 thousand people. But the pace of this decline was different: in 2007-2010 - an average of 10 thousand people a year; in 2011-2013 - 5000 people, in 2014-2015 - 20 000 people.

In 2015 the share of investment in the machine engineering against the total volume of investments in the country dropped to its lowest level - 1.9%. This is 2 times less than in 2008, then it equaled to 3.8%. It is also below the level during the global financial and economic crisis (2009-2010), when this share was 2.7%.

The share of investments and machine engineering exports are last macro indicators that have not degraded until recently. But it happened in 2014-2015. Thus, the machine engineering has no indicators that would preserve positive or stable trends.