Economist: Belarusians Are not Paid for Months

Debts of Belarusian enterprises have reached the ceiling.

The economy of Belarus is characterized by increasing number of bankrupt enterprises, workers without salaries or those paid in kind.

The other day, workers of MMD-51 (Mobile Mechanical Division) of Vitsebsk oblast contacted mass media. They have not been paid since November 2018. Builders have been going to work for several months now, but their families can't see the money. One of the largest construction companies in the region is about to close down. Unfortunately, wage arrears have already become a disaster for Vitsebsk oblast.

Charter97.org asked economist Barys Zheliba to comment on the situation in Belarusian regions:

- I read about those builders on the Internet. No one is surprised by the news about wage arrears of many months. It happens all the time, especially in the regions.

I'd like to note that a lot of enterprises are in poor financial condition in the regions. They do not pay out salaries because of no revenue. If money is enough to maintain production, to pay for supply of materials, then there is not enough money to pay salaries. Another option is to take money for salaries from a loan; it was not repaid, and now banks refuse to help. All this proves a poor financial condition of Belarusian enterprises. Many of them are loss-making. Even according to official statistics, it's about 20 percent.

I think that debt overburden of enterprises is another reason. Debt repayment requires huge amounts of money, taking the lion's share of revenues.

Simply arithmetic shows that with a high level of indebtedness, no revenue may be left to pay salaries. As a result, wage arrears of many months occur.

I stress that it is a vivid indicator of the condition of the country's economy. Enterprises are in poor condition; many of them are low-margin.

Again, wage arrears to builders in the town are not an isolated case. The regions face this cyclically.

- What do you think it may result in?

- If no measures are taken, the situation will extend for many years. Now the government is trying to keep large state enterprises afloat. It makes banks lend them, despite the fact that the previous loan is not repaid. It became known that loss-making state-owned enterprises have been forgiven their debts, including those on foreign currency loans.

- Who does pay for this?

- Partly at the expense of banks, but mainly at the expense of the budget, i.e. taxpayers. This is the permanent state of the economy.

- How can this debt circle be broken?

- Only one way that is known and repeated by experts - radical structural reform of state enterprises management.

The fact is that builders is the most migrating professional group of people. They've been leaving for Russia for a long time, and now they're going to Poland and other EU countries.

They say, no people will soon remain at construction sites of Hrodna. In Poland, construction workers are offered a salary of 4,000 PLN or more, which is in dollar terms equals to 1000 or more. Naturally, no such conditions are available in Belarus, and people, of course, leave.

The construction and other spheres suffer desperate times, to put it mildly. No improvements are expected. Fundamental changes are needed. The financial condition of Belarusian regions must be improved. Workers should also speak out.

- There are more cases when wages are paid in kind in Belarus. How does this explain the situation in the country and the attitude towards people?

- Speaking in economic terms, enterprises miss sales; there is no money on accounts, no proceeds. In the 90s it was a large-scale phenomenon, but those years were marked by the collapse of all economies of the USSR. It seemed that we needed to get away from it, but, as you can see... These phenomena are becoming known at enterprises time and time again.

It's good if wages are paid with products that can be eaten or saved.

Companies should analyze no sales, and some technologists just stay idle. The first rule of market economy, according to marketing textbooks: "The main thing is not to produce, but to sell".

It should be remembered.

- The head of Haradok District Executive Committee, Piotr Korobach journalists reached for to learn his opinion on the situation with salaries said not to be annoying and not to call him at all. Do you like the answer of officials, who live at the expense of taxpayers?

- It proves ignorance, but the concepts of "ignorance" and "leader" are incompatible. The official gave up on journalists because he failed to say anything intelligible.

He knows what they're asking, that something is wrong, but he has nothing to say. Such people should not be allowed to power. The well-being of citizens should not depend on such people. Leaders should talk to journalists and answer even uncomfortable questions. Ignoring is just a lack of culture.

The situation in Haradok, with almost no jobs there, is common to the whole country. In the city of Slutsk plants are being closed one by one. In Ivyanets, enterprises closed down and now people go to work in Minsk.

People waste 1.5 hours and money to reach a workplace. The situation is really critical. It must be fixed immediately.

A completely different labour market is required. We have a lot of specialists who graduate from higher and secondary institutions, but they do not find vacancies. There is a huge gap between specialists and jobs.

The government can't realize the necessity to support small and medium businesses. Many experts have been talking about it for years. Business is the right solution to the problem in the economy. Business representatives say that the situation remains very tense.

It is obvious that Belarus cries for changes. It can't be like this anymore.

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