Publication: Structural Challenges for SOEs in Belarus : A Case Study of the Machine Building Sector
Date
2012-03
ISSN
Published
2012-03
Author(s)
Favaro, Edgardo
Smits, Karlis
Bakanova, Marina
Abstract
Are Belarus's state owned
enterprises positioned to grow in 2011-2015 as successfully
as in 1995-2006? State owned enterprises account for 55
percent of Belarus's output and two-thirds of overall
employment; economic growth in 1995-2006 was the result of
capacity expansion and productivity improvements in state
owned enterprises. These sources of economic growth
originated in policy decisions that preserved the
functioning of the command and control economy and allowed
the country to exploit preferential commercial access to the
Russian market in several goods and services. Are the same
reasons likely to facilitate the performance of state owned
enterprises and overall economic growth in 2011-2015? This
paper concludes that this is not likely to happen. Times
have changed: the slowdown in production and exports in
2009-2010 was unquestionably associated with a transitory
decline in demand for durable goods in Russia. But there
have also been more permanent market forces at work: a
steady increase in competition in Russia and other
Commonwealth of Independent States markets resulting from
low-price Chinese and Russian-produced capital goods; and a
shift in demand from low-quality/low price to high-quality,
high-price transport equipment demand in Russia and other
Commonwealth of Independent States markets. And these forces
are there to stay. This conclusion leads to the following
questions: Would state owned enterprises be able to adapt to
observed market changes? What reforms would be relevant to
facilitate the necessary adaptation?
Link to Data Set
Citation
“Favaro, Edgardo; Smits, Karlis; Bakanova, Marina. 2012. Structural Challenges for SOEs in Belarus : A Case Study of the Machine Building Sector. Policy Research Working Paper;No. 6010. © World Bank, Washington, DC. http://hdl.handle.net/10986/19871 License: CC BY 3.0 IGO.”
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