OREANDA-NEWS. Belarus will find it hard to procure financial resources for production upgrade.

Deputy chairman of Belarus’ Industrial Scientific Association Georgi Grits made a statement to this effect at an economic conference organized by the Kunyavsky Business Union of Entrepreneurs and Employers.

The government of Belarus has declared a plan to create 400,000 new jobs, which will require EUR19 billion in investments, with USD 3 billion to be invested annually. According to the Economy Ministry, the plan will be financed with companies’ own resources, foreign investments and banks.

According to Grits, companies’ own resources are made up from profits, which should be at least 25%. At the same time, 70% of companies report a profit rate below 5%, which means companies will hardly cover 35% of the investment portfolio needed for the upgrade. There is no hoping for foreign investments either, Grits said.

All real economies depend on credits. Belarus’ refinancing rate is expected to reduce to 12%, but it is still too high in comparison with Russia and the EU, where credit interest rates stand at 8% and 2%, respectively. All Belarusian companies, which are forced to take loans, become uncompetitive on foreign markets, Grits said.

The expert reminded about the pressure to reduce government subsidies for industries. Belarus currently lives up to WTO regulation, Grits said with reference to President Lukashenko’s latest address to the nation. The problem is that Russia’s WTO commitments are superior to its commitments in the framework of the Customs Union, the expert said.

Grits noted that Belarus will have to abolish tax preferences for FEA resident companies in 2017. In his words, Belarus’ industries are two technological levels behind the world’s leading economies. Belarus needs to set priorities, concentrate resources and develop a strategy, the expert said. The strategy is not available so far, he said.