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Belarusian plants begin to work short weeks

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Belarusian plants begin to work short weeks

The upcoming crisis is going to be the most severe in the past ten years.

Experts thinks it has more difficult and comprehensive reasons than the previous ones. Belarus's inner problems are worsened by the crisis in Ukraine and Russia – the country's main economic partners. Economists forecast a decline in living standards of Belarusians, lower wages, a decrease in GDP, a fall in exports. Companies may lay off workers in an attempt to survive, Interx-Press writes.

Layoffs or low salaries?

The country's biggest state-owned companies already decided to make an unpopular step called staff optimisation. According to the Ministry of Finance, the number of employees has been reduced by 2,100 people (10%) at the Minsk Automobile Plant, by almost 2,400 people (20%) at Grodno-Azot fertiliser producer, by more than 1,000 people (15%) at Mogilevkhimvolokno plant in the past nine months.

Such serious reductions took place only at the biggest plants. Most plants have cut their staff by only 3-4% in the past three quarters.

Experts think managers will sooner or later face a dilemma: either to cut wages to save jobs or to reduce staff to save the company.

Short working weeks

Some have already faced the question. The situation is aggravated by the upcoming presidential elections. The authorities would prefer to postpone such drastic measures. But on the other hand, they would like to raise productive efficiency and not to lose qualified workers unsatisfied with their declining wages at overstaffed plants.

Companies are waiting. However, if companies in the food industry, such as dairy plants or bakeries, still feel rather confident, workers of industrial plants have already been hit by economic problems.

Many plants have begun to work short weeks.

“This is cost optimisation”

Agropromstroimash plant has faced difficult times. It pays the lowest salaries in the town – about 3.5 million rubles. Director Uladzimir Pankou explains it with a decline in orders and production output.

“The number of orders reduced, so we need fewer workers. Some work full weeks, some work four days a week. We don't have layoffs as such. But we have staff reorganisation. If one's employment contract expires, we may choose not to prolong it,” he says, adding that the economic modernisation plan was prepared for the plant.

Workers of the the Automatic Lines Plant at Baranavichy say that managers do not prolong contracts with young specialists and pensioners. They say workers also quit voluntary due to low salaries, which may become even lower.

The Automatic Lines Plant, Torgmash and the Baranavochy branch of Energodetal plant are reported to have short working weeks.

“Our plant doesn't work at full capacity now. Unfortunately, it influences salaries. The way out we propose is to cut production costs. We have certain plans, but it is too early to announce them,” Dzianis Supruniuk, the director of Energodetal's branch, says.

Workers of the plant of vehicle components met the consequences of the Russian ruble fall in December. According to them, some of them worked 11 days in December and 10 days in January.

“We work short weeks. It is how we cut our costs. It is better than to work only to fill warehouses,” the plant director, Vitali Yurkevich, notes.

However, it doesn't seem to be a relief for all workers.

“Some earn 2 million a month and have to give 4 million as home loan payment. And they have the wife on maternity leave and a child. People quit. When I came to the plant three years ago, almost 40 workers worked with me. Now only 12 people work,” a worker said.

He notes that plant managers do their best in this situation.

“They gave us production plans only to give us a chance to earn, because the Minsk Automobile Plant (MAZ) doesn't need most of our products. However hard our managers may try, we won't see any significant changes until MAZ starts working again,” the worker thinks.

The plant's managers have little to do in the current situation, because the plant produces components only for MAZ.

“Optimisation will go on”

Mikhail Yukhimuk, the first deputy chairman of the Brest region executive committee, says the “staff optimisation” will go on, though the situation has not significantly changed in Baranavichy.

“We will continue the optimisation as long as Russia is in this situation, because no one needs our products in previous volumes,” Mikhail Yukhimuk says.

He notes that much will depend on the situation in the Russian market.

“If it stabilises, we will return to their markets and will work even better,” Mikhail Yukhimuk hopes.

If nothing changes, plants will need time to enter new markets. It is all the more reasonable because the currency difference with Russia leads to big financial losses of our exporters.

“In these conditions, the task of every director is to make products more competitive. Don't work at all if you cannot do it,” the first deputy chairman of the regional executive committee concludes.

Crisis is going to be grave

Not all economists think optimistically that the situation can be improved in the near future. Pavel Daneika, an economic expert and the general director of the Institute for Privatisation and Management, is sure that the current crisis will be the most difficult since 1991.

“This crisis means a long depression. Markets will shrink every day,” the expert forecasts. “The peculiarity of this crisis is that both importers and exporters have losses. The latter suffered because the devaluation rate in Russia and Ukraine was higher. It will lead to what we are not ready to face – to unemployment.”

He says that private companies, which try to adjust to new conditions, have begun to cut staff. This measure was postponed in state-owned companies, but reductions are going to be more serious than before.

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