As we said, on December, 21 the press conference devoted to the results of the year by MCAEE and Scientific and Research Centre of Mizes of AC “Strategy” took place. During the press conference AC “Strategy” presented the nominees and winners in 13 categories of the results of social and economic development of Belarus in 2006.
13 CATEGORIES of 2006
Analytical Centre “Strategy” has the honour to present the nominees and winners in 13 categories of the results of social and economic development of Belarus in 2006. The choice of the nominees has been made on the ground of the macroeconomic, statistic and legal analysis of the economy in the outgoing year, actions of the governmental organs of authority and their consequences and also those tendencies that has showed up the most significantly this year and that will have big consequences in the coming year.
The choice of the nominees and winners in the 13 categories has been implemented by the expert group of AC “Strategy” that consisted of economists, lawyers and representatives of business community. Three nominees were presented in each category, except one. The exception is “The Best Organ of Governmental Management 2006”. It was difficult for experts to name more than one governmental organ that could be nominated in this category.
1. The Best Organ of Governmental Management 2006
1) the National Bank
The Winner: the National Bank
- predictability of the monetary policy, achievement of the parameters of the comparative stability of the national currency
- liquidation of the golden share in the banking sector
- active attempts to rationalise economic policy
2. The Worst Organ of Governmental Management 2006
1) The Ministry of Taxes and Dues
2) The Administration of the President of the Republic of Belarus
3) The Ministry of Finance
The Winner: The Ministry of Finance
- unpredictability, complexity of the taxation legislation and excessive tax burden;
- unreadiness to present real parameters of the fiscal policy of Belarus without Russian power grant;
- for violation of interstate agreements with the Russian Federation to divide the oil customs
3. The Scandal of the Year
1) activity of JSC “BKK” and RUP PO “Belaruskaly”
2) Creation and Development of the Fund of National Development
3) Export of sugar and sugar war with Russia
The Winner: Creation and development of the Fund of National Development
- rude violation of property rights of legal entities, implementation of fiscal norms with a back date
- inadequate measures to protect against Russian new power policy
- punishment for highly profitable activity i.e. for corporate success
4. The Event of the Year
1) The Presidential Elections
2) the Conflict with the EU for deprivation of trade preferences for Belarus
3) the Failure of the foreign economic conception of “the Far Arc”
The Winner: the Presidential Elections
- remaining of the main parameters of the system of strict planning and regulation
- strengthening of self-isolation, without WTO, partnership relations with the EU and the key international organizations
- making the resource of specific “association” relations with Russia weaker and growth of tense in trade with Russia.
5. The Best Legislative Act of the Year
1) The Resolution of the Council of Ministers on September, 1 2006 № 1120 “On making changes to the resolution of the Council of Ministers on November, 2 2005 № 1221”
2) The Decree of the President № 6 10.04.2006 “On making changes and additions to the Decree of the President of the Republic of Belarus on March, 16 1999 г. № 11” «On improvement of state registration and liquidation (stop of activity) of businesses” (exclusion of the words “the volume of Belarusian goods in the total turnover of the retail trade network” from the licensing requirements);
3) The Decree № 151 15.03.2006 “On making changes and additions to the Decree of the President of the Republic of Belarus № 673 15.11.1999” “On some measures to perfect of coordination of activity of the controlling organs of the Republic of Belarus and the order of implementation of economic sanctions by them”.
The Winner: The Resolution of the Council of Ministers on September, 1 2006 № 1120
- intensification of the process of reconstruction of the single economic area within the Republic of Belarus
- an attempt to limit the power of the red line of the branch ministries and the local authorities
- support of active Belarusian producers working on the domestic market
6. The Worst Legislative Act of the Year
1) The Decree № 70 3.02.2006 «On some measures to improvement of the accounting of the number of empty and old houses with agricultural and other buildings in the rural area” and the Decree № 87 7.02.2006 “On some measures to reduce the number of non-finished non-conserved living houses, cottages”
2) The Decree of the President № 538 28.08.2006 “On measures of finance sanitation of unprofitable JSCs”
3) The Resolution of the Council of Ministers № 1091 28.08.2006 “On making changes and additions to the Resolution of the Council of Ministers № 873 8.09.2005 and recognition of the resolution of the Council of Ministers № 1453 17.11 2004 as being stale (№ 873 “On forecasts, business plans of development and business plans of investment projects in commercial organisations that are part of national organs of governmental management, other governmental organizations that obey to the Government of the Republic of Belarus, regional executive committees and Minsk City Executive Committee”)
The Winner: The Decree of the President № 538 28.08.2006 “On measures of finance sanitation of unprofitable JSCs”
- creation of corrupt system of stimulus for heads of enterprises, blocking of the bancrupcy institution
- rude violation of the property rights and deprivation of companies of corporate independence
- contrproductive, non-perspective way of investment policy and restructurisation
7. The Main Beneficiary of the Year
1) Belgospishcheprom (Belarusian State Food Industry Concern )
2) unprofitable, insolvent industrial enterprises
3) the Ministry of Agriculture and Food
The Winner: the Ministry of Agriculture and Food
- free, long-term lobbying of agricultural interests at the expense of other fields of economy and consumers
- identification of the agricultural lobby in the minds of policymakers as the interests of the Republic of Belarus
- creation of the system of strict protectionism regarding to the domestic and foreign competitors
8. The Victim (Sufferer) of the Year
1) Individual entrepreneurs
2) RUP PO “Belaruskaly”
3) People who wish to purchase habitation
The Winner: People who wish to purchase inhabitation
- excessive growth of prices on the market of real estate
- high legal, finance and administrative costs in building inhabitation, strict limitation to enter the construction services market
- lack of contemporary institutes to finance inhabitation construction, high prices of credit resources
9. The Tendency/Trend of the Year
1) Nationalisation without compensation
2) Worsening of conditions for attraction of investments
3) Making the Belarusian money-financial bubble bigger
The Winner: Making the Belarusian money-financial bubble bigger
- artificial stimulation of the domestic demand, including administrative growth of incomes
- low finance and payment capacity of industrial and agricultural organizations, their unlimited access to cheap credits and budget subsidies
- consolidation of money of population in banks for commercial projects with high risks and low efficiency
10. The Surprise of the Year
1) Opening of the assembly plant “Samand”
2) Acknowledgement of unproductiveness of the current state policy: revelation of the heads of the state and the government
3) Growth of the number of families who need improvement of the living conditions
The Winner: Acknowledgement of unproductiveness of the current state policy: revelation of the heads of the state and the government
- the conflict of word and business, contradiction between declarations and the current policy
- weakness and dismay facing actual problems of restructurisation and adaptation of the economy to the new market conditions
- inadequate measures in foreign economy sphere to neutralize the potential outlet power shock and diversification of industrial structure
The examples :
- The Vice-Premier Mr. Vladimir Semashko: “The Belarusian industrial leaders, besides “BelAZ” have been increasing their output at the expense of those funds that remained from the Soviet times”.
- Mr. S. Sidorsky: “Today we do not have effective projects within which we could attract investment resources of foreign credit lines… Neither separate enterprises, nor branch ministries do not have ready-made projects”.
- Mr. A. Lukashenko : “We will be worth as a state only when all these bulls, cows, nuts – shmuts will be aimed at the person. And the rest – damn it – all this metal, wheels and machines if it is not worth ofr the person!”
- Mr. A. Lukashenko “We are producing dependence and mismanagement”
11. The Business Perspective of the Year
1) JSC “Savushkin Product”: increase of its share on the market of Moscow and Moscow Region 5 times
2) Belarusian-Austrian JSC “Steklozavod Elizovo”
3) JV “Pervaya Shokoladnaya Companiya” (“the First Chocolate Company”) (“Ideal” chocolate)
The Winner: JSC “Savushkin Product”
- adequate strategy of development and promotion of its own trade mark
- high quality of the goods
- readiness to open competition on the EU market
12. The Consume Casus of the Year
1) Decrease 83 times of production of grapes wines and 71 times – fruitage wines. Is this a beginning of a new life? Or is this process of forming of European community in Belarus?
2) Aristocrat tendency that lead to increase of growth of sale of cognac by 59%.
3) Unique growth of purchase of fish cans by 42.3% (it is the tendency of the last years) with growth of real incomes in this year by 17.3%.
The Winner: Aristocrat tendency that lead to increase of growth of sale of cognac by 59%
- simultaneous growth of sale of wear by 26.7% and washing power by 28.9% with growth of sale of washing machines by 17.7%
- simultaneous decrease of sale of TV sets, fridges and washing machines (from 7 to 21%)
- decrease of purchase of cereals, macaroni, vegetable oil and butter and increase of consummation of meat (+13.4%), cheeses (+12.8%)
- increase of purchase of alcohol by 19%, juices by 26%
- simultaneous consummation of non-alcoholic drinks (+20.7%) and benzene (+21%)
- simultaneous increase of purchase of soap and champagne (+14%)
13. The Industrial Casus of the Year
1) Growth of income of housing and communal services 2.63 times with capacity of its services - 2.8%, which is the champion index among all the segments of the economy. In the communication sector income increased only by 56%, in trade – by 58%
2) Increase of average monthly level of milk produce per one cow in 5 months (June – October) from 2020 kg. to 3490 kg., that caused damping enthusiasm in Russian milk lobby.
3) Increase of prime cost in construction by 30.2% within the year that is evidence of growing appetites of the construction lobby with the GDP growth only by 9.7%
The Winner: Growth of income of housing and communal services 2.63 times with capacity of its services - 2.8%.
- The fact that 98.7% agricultural enterprises have become profitable which is the absolute record of the country. The correspondent indexes in industry total 76.7%. There is no any more profitable branch except the agricultural one.
- Achievement of the profitability level of the goods sold in the communication organizations and enterprises up to 46%, which is the record index of the country.
- Transformation of Mogilyov Region from a traditionally depressive to the most effective region of the country where only 9.7% of enterprises are unprofitable. In 2006 it is a new record of the country.
- Increase of foreign investments to the aggregated level of $2.8 milliard of foreign investments to the real sector of economy. All the attracted money flows have been counted in such a way. At the same time the net entrance of direct foreign investments totaled only $32.8 mln.
Mr. Leonid Zaiko
Head of AC “Strategy”
Mr. Romanchuk Yaroslav
Head of Mizes Scientific and Research Centre by AC “Strategy”