OREANDA-NEWS. On 02 April 2009 was announced, that a full assessment of the operation of the Belarusian economy in the conditions of the world financial and economic crisis will be made at the end of H1 2009, said President of the Republic of Belarus Alexander Lukashenko on 17 March during his tour of the JSC Vitebskdrev.

The President visited this company to get a picture of the current situation in the Belarusian timber industry.

Before embarking on a tour of the company’s production facility, the President had a meeting with Alexander Kosinets, Governor of the Vitebsk Region, to get a brief on the current economic situation in the region, the situation at certain companies and on the current tendencies in the region’s industrial and agricultural sectors. The Governor informed the Head of State on the economic situation and overall state of affairs in the region in this time of the world financial crisis. The President drew the attention of the region’s government to two key objectives that should be met: jobs should be saved, and goods produced in the region should be sold at acceptable prices.

In July 2006 the President toured a number of Bellesbumprom companies in the Ivatsevichi District, Brest Region, and gave specific tasks to local officials regarding further development of the woodworking industry. Sometime after that, a set of critical measures was taken at the level of the President and the Government to move the industry forward. If implemented in full, these measures could have brought stability to the industry regardless of today’s hard times. What was done in this area and what was not and why where the things President Alexander Lukashenko was interested to find out today.

JSC Vitebskdrev is a company specialising in a range of areas from wood harvesting and transportation to production of wood-based panels for various purposes. Vitebskdrev was steadily increasing output and exports for the past five years. In 2008 the company reported a 15 per cent production growth from 2007; and a return on sales equal to 14 per cent. Most products are supplied to businesses inside the country, but a large portion of the output is exported to Russia and the other CIS member states, as well as countries outside of the CIS (the latter account for 34 per cent of the company’s export supplies). Nearly 1,600 people work for Vitebskdrev, and the number of jobs was rising in recent years due to the company’s production diversification initiatives.

But in November 2008 there began a sharp decline in the demand for Vitebskdrev products. As of 1 November 2008, the manufacturer’s unsold products piled up in its warehouses accounted for 42.2 per cent of the company’s average monthly output; by the end of the year that figure skyrocketed to 97.2 per cent and finally came to 130.8 per cent on 1 February 2009.

The President acquainted himself with the technological process used in production of fibreboard, with modern equipment to process wood and with the technological process used in production of high-quality joinery (windows and doors account for around 21 per cent of Vitebskdrev’s aggregate output).

On closing the tour of the company’s production facility, the President said he believed it was still too early to make any assessments regarding the operation of the country’s woodworking industry as a whole, and said he intended to make them after seeing the results of the industry’s performance in H1 2009. ‘To analyse the situation, you have to see the dynamics and the trends’, he said.

After touring the company’s production facility, the Head of State answered some questions of reporters.

On his recent visits to Serbia and Armenia, Alexander Lukashenko said that main attention during the visits was placed on attracting investors to Belarus.

‘There is a need to understand that talking about investments in general, which used to be the case before the world financial and economic crisis, is now useless. Today one should search for investors, for rich people, in a deliberate and purposeful manner, to hold negotiations with them and reach points of agreement’, said the Belarusian leader.

One and a half dozen of Serbian businessmen who participated in the meeting with the Belarusian President expressed their willingness to work in Belarus.

Alexander Lukashenko said that advantageous business conditions would be created in Belarus for foreign investors who, among other things, would be exempt from paying taxes for three years so that they could recoup their investment. But for this, they should agree to certain conditions. ‘We tell them: Do not think that when you come [to Belarus] we will sell you our factories and plants for a song, that we will allow such privatisation. To participate in privatisation [in Belarus], one should first earn trust. Come [to Belarus], show what you can do, work for about three years, prove that you are better than others, and maybe we will begin privatisation, and you will have an advantage in this process’, said the President.

As for his visit to Armenia, Alexander Lukashenko said that during the talks with the Armenian President the two had discussed many issues from co-operation in economy to co-operation in the field of military and technology. Belarus is very interested to work with Armenia and has opportunities for expanding the bilateral trade. ‘We do not have closed topics for discussion with Armenia’, said the Belarusian leader. Armenia and Belarus are partners within the framework of the CSTO. Belarus welcomes Armenian investors, he added. Negotiations with leading Armenian businessmen are evidence of the big interest on their part in co-operation with Belarus, said the President.

Commenting on the recently signed currency swap agreement with China, the President called it ‘a colossal victory’. Under the agreement, CNY20 billion and Br8 trillion (approx. USD 2.8 billion) will be made available. The maturity period of the agreement is three years, and it can be prolonged further providing there is mutual consent on both sides. In fact, the agreement is designed for a long-term, during which funds will be made available to help expand the bilateral trade between Belarus and China.

‘It took us three years to negotiate this agreement. It is a real breakthrough. It is what we have been talking about with Russia for so long, with determination and persistence, namely to do our bilateral trade in Russian roubles. The Chinese – I want to say a big thank you to them – have taken the lead in this’, said the President.

Today Belarus can buy goods in China for the Chinese currency, and China can buy in Belarus everything it needs for Belarusian roubles, said Alexander Lukashenko. ‘If China has a goal to have a bigger influence on Europe via Belarus, by competing with Russia and other countries for the presence in the heart of Europe, we welcome it. I have been offering this strategic partnership to the Chinese for a long time’, said the Belarusian leader.

According to the Head of State, it is obvious that the Chinese economy will be the leading economy in the world in ten to twenty years from now. ‘Therefore Belarus will only benefit from this co-operation’, he said. As the President recalled, as long ago as while being a parliament deputy he spoke about the Chinese economic model as of a model worth copying. ‘Many people say today that China has already begun to revive, and I am confident that the Chinese may be the first to overcome this crisis’, said the President.

‘We are proud of our relationship with such a large country as China’, added the Belarusian leader.

The President welcomed further suspension of the European Union’s sanctions against Belarusian officials.

He added, however, ‘If they think that they can have us on the hook, receiving signals from our opposition freaks, that we can be harassed and told what to do–we will not engage in a dialogue if their position is like that’.

Recalling Javier Solana’s visit to Belarus, Alexander Lukashenko said the EU Secretary-General and he had found mutual understanding and he saw a commitment on the part of the Europeans to co-operate with Belarus. ‘And how did our opposition activists react to Solana’s visit? They now consider him almost as their personal enemy!’ said the President.

‘If Europe is fundamentally willing to co-operate with Belarus following the principles we have identified with Solana, and sees Belarus as a member of this European family, we are prepared to it’, said the Belarusian President. The main thing is that the sides should respect each other and never lose sight of the basic co-operation objectives.

Although such countries as Great Britain or the Netherlands are not willing to support us, today Belarus is supported by some of EU’s largest countries. ‘We have been supported, for the first time ever, by such neighbouring countries as the Baltic states and Poland. The dialogue with Ukraine is developing excellently, which is considered a litmus paper for the EU. These are good signals, a good breakthrough’, said Alexander Lukashenko.

The President reiterated that in no way was Belarus expanding co-operation with the European Union to the detriment of its relations with Russia. ‘Belarus should play the role of a linking bridge between the East and the West. It is good for Europe, too: Europe is not going to make war on Russia, but rather to co-operate with it. And we should play our role in this co-operation’, concluded the President.