Belarus' Government has developed a package of measures to create a basis for planned GDP's increase in 2010

In recent months of 2009 Belarus' Government prepared a package of measures providing a basis to reach planned GDP's increase by 11-13 per cent in 2010, as stated by the Prime Minister Sergei Sidorsky during the extended meeting of the Council of Ministers on 29 December.

"The main thing is that the enterprises' business plans for 2010 were developed. These plans envisage creating new and modernizing current production capacities", Sergei Sidorsky stressed.

Analyzing the work of the Government in 2009, Sergei Sidorsky focused on business projects to establish new productions and upgrade the existing ones. "We emphasized closer cooperation between the production and science, studied innovation programs of each ministry and agency," he said. Research institutions of the National Academy of Sciences put forward proposals to set up state-of-the-art productions in the fields of biotechnologies and nanotechnologies in Belarus. "This program was adopted by the Government and in 2010 the implementation of this program will be launched," Sergei Sidorsky said.

A set of measures to support private sector in Belarus will be adopted in 2010, Prime Minister said.

"We have analyzed the development of the private economic sector and adopted a number of measures. The Government signed a resolution for 2010 to support the private sector, including entrepreneurs," the Belarusian head of Government said.

According to Sergei Sidorsky, it is necessary to harmonize the programs introduced to the 2010 budget with the real economic sector. "First of all, it is aimed to support the real economic sector. It is important that the budget we have adopted and affirmed by the President will be executed actively beginning next year," Prime Minister said.

In 2010 Belarus' GDP energy intensity should be lowered by 10%, Sergei Sidorsky said.

In 2009 most of the ministries and departments failed to meet the targets in energy saving and energy efficiency. "On the whole we have to slim down the GDP energy intensity by 10%. Our energy policy will be based on this figure", Prime Minister said.

Sergei Sidorsky charged the local authorities, ministries and departments to accomplish the tasks in energy saving and energy efficiency.

The ministries and departments should reflect the concrete figures on energy saving and energy efficiency in their programmes alongside with the measures that are necessary to implement these programmes, added the Prime Minister. "I demand that every ministry and department should fulfill this task, because the energy saving is very important for Belarus' economy," Sergei Sidorsky said.

The Government of Belarus has developed a set of measures to increase the average wages to Br1.5 million by the end of 2010, Deputy Prime Minister of Belarus Andrei Kobyakov said at a session of the Council of Ministers.

This target is secured in the draft resolution of the Council of Ministers and the National Bank "On the joint action plan of the Government of the Republic of Belarus and the National Bank to achieve the targets set out in the social and economic development forecast, budget and the monetary policy guidelines of the Republic of Belarus for 2010".

According to Andrei Kobyakov, the document zeroes in on economic liberalization measures and promotion of business and management initiative. Certain solutions are suggested in price formation, financial, investment and innovation policy, foreign trade and consumer market development. The document also suggests the measures to ensure the financing of housing construction, streamline the state property management and to encourage small and medium business.

Andrei Kobyakov noted that the joint action plan will become a supplement to the 2010 programmes on import substitution and export development, to the plans on advancing to the top thirty countries with the best doing business conditions and harmonizing the Belarusian legislation with international financial reporting standards.

Presenting the document, the Deputy Prime Minister spoke of the state assistance which is provided in the form of compensation for interest rates on loans. According to him, especially it will be important in early 2010 when the loan rates will remain rather high. Andrei Kobyakov reminded that Belarusian legal entities can apply for the refund of some part of the interest rates providing they implement state budget programs, investment projects distributed through tenders, energy-effective projects, and business development plans. Any legal entity may apply for this kind of the state support. At the same time, not only the amount of the loan is important. Equally important is the cost of the loan as it directly influences the price of a product and its competitiveness, Andrei Kobyakov said.

"As far as monetary management goes, we should adjust our steps to those of the Russian Federation, our main foreign trade partner. We do so in matters relating to foreign exchange policy. Why should we lag behind in matters of the refinancing rate and interest rates for bank loans?" wondered Andrei Kobyakov.

He reminded that since April 2009 the Central Bank of Russia has been consistently reducing the refinancing rate every month. Over the time the refinancing rate was reduced from 13% to 9%. It stands at 8.75% as from 28 December.

"This is why I believe that in matters of interest rate reductions the National Bank should follow not only the Major Monetary Management Guidelines. It should also coordinate its actions with the policy the Central Bank of Russia pursues," stressed the Vice Premier.

According to Andrei Kobyakov, it will help the Belarusian industry a lot in hitting next year's development targets and reaching export volume goals.

The interest rates in Belarus' financial market will depend on the general economic situation in the country, Chairman of the Board of Directors of the National Bank of the Republic of Belarus (NBRB) Piotr Prokopovich said at a session of the Council of Ministers.

"We have been working on reducing the interest rates. Yet, everything depends on the state of affairs in the economy. To attract a cheap resource is more important than to issue a cheap one. Today the resources are expensive. For example, the rates on deposits reach 25%," Piotr Prokopovich said.

At first we need to gradually reduce the rates on the deposit market and then start working on the interest rates on loans, Piotr Prokopovich noted.

The rate of inflation is also important. "In 2010 we seek to stay within the 8-10% projections. Yet, if in January -February the inflation is high, we will not be able to reduce fast the interest rates in the financial market," said Piotr Prokopovich.

There is also the need to address the issue of the foreign trade deficit, first of all, by dint of raising foreign direct investments.

Piotr Prokopovich assured that the National Bank will be taking every effort to reduce the interest rates much earlier than the 2010 year-end.

In 2010 Belarusian banks are expected to increase the money of non-residents in their resources by 80% to billion, Piotr Prokopovich told. It will substantially increase the lending potential of the Belarusian banking system.

He reminded that in 2010 the lending to the economy is supposed to increase by 40%. It will require the relevant resources. The NBRB head said that the state budget could support state-run banks. The state budget and the Finance Ministry have the resources to ensure normal operation of state-run banks, said Piotr Prokopovich.

Speaking about increasing the resource base of non-state banks, Piotr Prokopovich said that the ongoing efforts aimed at attracting foreign investments to banks should pay off in 2010. The NBRB expects that banks with a share of foreign capital will get the bulk of the attracted resources.

As an example the NBRB head mentioned the recent deal sealed to attract Sberbank, one of Russia's largest banks, into the Belarusian banking industry. The bank has undertaken specific investment goals and other ones.

"The question is whether there will be a demand for these resources. So far the need for crediting investment projects is inconsiderable. It does not meet the targeted figures," noted the Chairman of the Board of the National Bank of Belarus.

Stability and predictability of the national currency in 2010 will be ensured, Chairman of the Board of the National Bank of the Republic of Belarus said.

"The stability and predictability of the national currency in 2010 will be ensured. It means that the basis for the stable work of economy in the next year has been created," Piotr Prokopovich said.

He said that in 2010 the Belarusian ruble will remain pegged to the basket of foreign currencies within plus/minus 10% of the value. "It is the extreme limit. We should not overstep it. We should work the same way as we work today," said Piotr Prokopovich.

In December 2009, the exchange rate of the Belarusian ruble remained almost unchanged to the basket of the foreign currencies. In line with the NBRB forecasts, in January 2010 there will be some fluctuations towards the strengthening of the national currency. But on the whole, in early 2010 and during Q1 of the next year the Belarusian ruble will remain stable, according to Piotr Prokopovich. He is confident that Belarus has provided all the necessary economic prerequisites for this purpose: in H1 Belarus' export revenues increased 1.5 times. And in 2009 Belarus' gold and foreign currency reserves raised 1.8 times.


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