Every Fourth Family to Fail With Payments For Utility Services

Growth of rates will undermine the budget of 25-30% of Belarusians.

The Belarusian authorities announced their intention to increase the average reimbursement of costs of all utilities from 48.5% in 2015 to 100% in 2018. Thus, they plan to cover 75% of costs in 2017. The report of the IMF informs.

According to the IMF, public utilities rates for Belarusian households do not reach the level of full cost recovery and are lower than in other countries in the region.

Meanwhile, the level of income of Belarusians falls. Can it cause mass failures of payments?

Zlotnikau: Payment crisis may arise

Economist Leanid Zlotnikau in an interview to Zautra Tvaye Krainy recalls that in Belarus since the beginning of the year decree No.78 provides for state support for families whose utility bills exceed a certain percentage of income. But the expert doubts that the state has enough money to assist all such families.

- The situation will aggravate, the expert believes.

His arguments are as follows: income decreased compared to a year earlier, and the tendency will continue in the near future.

- Belarusians will be sliding into poverty, Leanid Zlotnikau says. - 25 or even 30% of people will suffer problems with payments for utility services. Payment crisis will arise, the economist predicts.

At the same time, experts note that in a normally organized residential sector with services provided by private enterprises, costs and expenses of the population are less by quarter or third than at an organization.

- Private capital is more effective than the state one, Leanid Zlotnikau believes.

Uladzimir Kavalkin: The quality of services will fall

Head of the Kosht Urada project Uladzimir Kavalkin is convinced that the problem is the state monopoly for utility services.

- A monopolist has no motivation to enhance the quality, only to raise prices. Especially in the situation when 75% of costs are covered by citizens, while the remaining 25% are taken from the budget, which consists of taxes, Uladzimir Kavalkin stresses.

According to the economist, the quality of services starts to improve only when the market will have independent commercial organizations.

- But the prices will be commercial as well, the interlocutor says.