OREANDA-NEWS. Belarus' industrial groups, which were expected to become the engine of economic growth in the country, have not started working yet, because the government used the wrong approach to establishing those industrial groups.

Belarus' Prime Minister Mikhail Myasnikovich made a statement to this effect at a government meeting focused on assessing the country's economic performance in Q1 2014, as reported by the government's press-service.

The premier accentuated the importance of optimizing the management system and cutting costs. The industrial groups have not started operating yet, as most of them were created by physically merging several companies together, which was the wrong approach, Myasnikovich said.

Starting 1, 2015 industrial groups should implement the consolidated payer principle in order to exempt the internal turnover from taxes, the premier said.

Myasnikovich has called the government to take action to deal with the bottlenecks of economic growth.

Belarus' GDP growth in Q1 2014 meets the parameters of the forecast (1.1%-1.3%), the premier said.

“The results of the previous year and the first four month of this year testify that the traditional model of industrial development has exhausted itself,” Myasnikovich said. In his words, state-run industries are becoming less significant as a source of economic growth and their share in the country's total industrial production has reduced from 20.3% to 14.8% over the last 15 years. In January-March 2014 this indicator went further down to 12.8%.