Leu Marholin: More Belarusians to leave country next year

People found an easy way out of the economic situation.

Economist Leu Marholin spoke to charter97.org about insolvency of one third of Belarusian enterprises.

“The reason is very simple. In a market economy, a company reduces or stops production or looks for something else if there's no demand for its products. But we have a plan on gross figures, so the enterprise should fulfill the plan regardless the demand. It has to take loans if it doesn't have enough working capital. It influences production costs making the production unprofitable. Products that accumulated in warehouses are often sold below production costs. These factors affect the profitability of an enterprise and make it unprofitable. But no one wants to know it,” he said.

The expert adds the government promised to cancel gross targets the next year and leave quality targets, such as production performance and profitability.

“Let's see how it will be implemented in practice. I personally doubt the situation will change the next year,” the economist thinks.

Leu Marholin noted such a big number of insolvent companies had a negative impact on the economic situation in whole, because loans were unable to solve the problem.

“If Belarus finds loans or sells property, the problem of public-sector employees and retaining power will be solved, but it won't affect small and medium-sized companies. They can live only if they receive loans. They can die if they don't have loans. The situation is very difficult. It will be even worse if the number of loss-making enterprises continues to grow,” he is convinced.

The expert supposes a structural economic reform can be a way out of the situation.

“But no such reform is expected, because it poses a threat to Lukashenka's power. I don't have good forecasts for our industry. I think the situation will continue to deteriorate, because no one tries to solve the inner problems of the Belarusian economic crisis. More and more companies will lose the Russian market and become loss-making. Belarusians can save for a rainy day, but people found solution. They just leave the country. To all appearances, the government also counts on it, because the government's plans provide for laying off 150,000 workers without the employment programme. The authorities think people should solve their problems on their own,” Marholin summed up.

We remind that the analytical review of main economic tendencies released by the National Bank informs more then one third of Belarusian enterprises are insolvent.