Belarusian Economic Research and Outreach Center

Seminar on restructuring state enterprises and investment attraction to develop regions held in Minsk

On May 16, a republican seminar was held in Minsk for representatives of state bodies “Restructuring of state enterprises and regulatory aspects of attracting investments for the development of regions. Practical basis for Belarus ”. The event was organized by the National Agency of Investment and Privatization with the support of the Ministry of Economy of the Republic of Belarus, the World Bank Group, and BEROС.

On May 16, a republican seminar was held in Minsk for representatives of state bodies “Restructuring of state enterprises and regulatory aspects of attracting investments for the development of regions. Practical basis for Belarus ”. The event was organized by the National Agency of Investment and Privatization with the support of the Ministry of Economy of the Republic of Belarus, the World Bank Group, and BEROС.

International experts with experience in restructuring state enterprises and attracting foreign direct investment including in Central and Eastern Europe were participate as speakers at the seminar –  Nicola Saporiti, Senior Investment Officer of the International Finance Corporation (IFC), Stefka Slavova, Lead Economist at the World Bank , Former head of Social Insurance Inspectorate of the Kingdom of Sweden, Per Molander, Head of IFC Representative Office in the Republic of Belarus Olga Scherbina, Director on the management of the European Bank for Reconstruction and Development (EBRD) for Ukraine and Belarus Olyana Gordienko.

Representatives of ministries and concerns, the State Control Committee, the State Property Committee, local authorities and deputies of the House of Representatives actively participate in the seminar.

During the meeting, the participants discussed best practices in attracting direct investments to state-owned enterprises, prospects for the development of the private sector, as well as conditions and investment issues in the Republic of Belarus.

As noted at the opening of the event, Deputy Minister of Economy Alexander Chervyakov, foreign direct investment should be the basis for the construction of any economic policy, be it industrial or regional development. At the same time, in order to ensure long-term economic development, it is necessary to focus on attracting foreign investment in the creation of primarily export-oriented industries.

 “The importance of the topic being raised is difficult to overestimate, as a purposeful work to attract investment and improve the efficiency of the real sector is one of the primary tasks for ensuring the growth and development of our economy. And now these processes are difficult to imagine without restructuring the public sector, which forms about half of our country's GDP,” said Deputy Director of NAIP, Sergey Vaganov. “In addition, today the state sector is entrusted with many different functions that do not always contribute to the development of modern, efficient and competitive industries.”

During the seminar experts discussed the experience of restructuring state-owned enterprises abroad, as well as shared recommendations on its conduct in Belarus.

 “It is extremely important for Belarus to demonstrate to the world community that it is possible to carry out restructuring with the involvement of a foreign investor in the country. To do this, it is necessary to identify several suitable enterprises in respect of which to begin the process of restructuring. If it is carried out correctly, this will lead to an increase in efficiency, and, consequently, profitability of the enterprise,” stressed leading economist of the World Bank Stefka Slavova.

In addition, within the framework of the seminar, the issues of the efficiency of the management of state enterprises were touched upon. “The state should act as an active and informed owner, thereby ensuring the management of its enterprises on the basis of transparency and accountability with a high degree of professionalism and efficiency. The state should formulate a “property policy” – namely, clearly explain why it owns the enterprise, what role it plays in governing it and what  its responsibility,” Oliana Gordienko emphasized.

Head of the IFC Representative office in the Republic of Belarus Olga Scherbina noted in her speech that despite the existing investment risks in the country influencing the decision on investing, experience of positive examples of investment deals with major players has been gained in Belarus, including repeat ones (Kronospan, Austria Telecom, Danone, Laktalis, Stadler, etc.), and a corresponding investment infrastructure has been created.

She also stressed the need for joint work to diversify investment partners, improve investment legislation and the investment climate, promote competition, new technologies, and modern management methods.

At the end of the event, Head of the World Bank's representative Jan Chul Kim noted that Belarus has a great potential for attracting foreign investors, so the main task today is the competent positioning of the country abroad as an investment-friendly country.

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