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Market reforms
Reform of public property in the Republic of Belarus was begun in
1991 and is going on now. The basic legislative acts for conducting the
reform of public property in the Republic of Belarus are the following laws:
"On Destatisation and Privatisation of Public Property in the Republic of
Belarus", "On Joint-Stock Companies, Limited Liability Companies and
Additional Liability Companies", "On Personal Privatisation Vouchers", "On
Enterprises", "On Property", "On Shares", the State Programme of
Destatisation and Privatisation and other legislative acts of the Republic
of Belarus.
Policy of privatisation and transformation of public property is
based on two main principles: growth of efficacy of production through
gradual and balanced reforms and account of social factors. In reforming
public property, the Republic of Belarus proceeds from the fact that
accelerated transformation of public enterprises into non-governmental
economic entities may result in a sharp reduction of personnel and social
tension in the country. The Government of the country sticks to this
approach and does not force processes of reformation of public property.
This careful approach makes it possible to check one"s actions against the
changes taking place and prevent shocks in the country.
As for 1 January 2002, the number of transformed enterprise in the
country was 3474, which was 18.4% of the total number. These enterprises
were transformed to form 1418 joint-stock companies (41% of all transformed
enterprises); 1334 facilities were sold through auctions; and 722 entities
were bought out by leasing and labour collectives. In so doing, 3294
facilities have been reformed in industry, 241 in construction sector, 1108
in trade sector, 243 in public meals sector, 402 in public services, 595 in
agro-industrial complex, and 489 facilities have been privatised or
incorporated in other sectors of national economy. The number of employees
at the transformed enterprises is 753,000, which constitutes about 21% of
all personnel employed in the country.
The process of reformation of public property in 2002 will be based
on the following approaches:
-
ensuring efficacious operation of transformed
enterprises;
-
differentiated approach to privatisation of
enterprises depending on liquidity, competitive selection results and
expertise of long-term business projects, and control over the
fulfilment by new owners of assumed commitments;
-
combining policy of privatisation with investment
through organisation of combined auctions (including by the method of
diminishing the initial price for privatisation facilities), and
investment contests;
-
expanding privatisation tools, including sale of
facilities for freely convertible currency, as well as sale at auctions
with conditions or contests of enterprises whose financial debts are
equal to the active part of the balance or exceed this part (with up to
100 jobs).
In 2002, priority privatisation methods will be
auction or sale through contest of small-size facilities, facilities of
incomplete construction cycle, including by diminishing the initial price.
Priority in destatisation and privatisation including bankruptcy procedure
will be given when dealing with inefficient operating state-owned
enterprises. It is planned to work out special measures that should be
applied during bankruptcy procedure to legal entities classified as
important or especially important public facilities.
During the period up to the year 2005, it is planed to complete,
mostly, destatisation and privatisation of unprofitable enterprises and
enterprises with the number of staff up to 200 persons, to conduct
destatisation of large industrial enterprises and, above all, enterprises of
the petrochemical complex involving foreign investors, which will serve as a
transition stage to a large-scale privatisation in the future. Facilities of
priority privatisation in the country include also facilities of the
services and trade sectors, small enterprises and a significant part of
medium-size enterprises of the agro-industrial and the construction
complexes.
Incorporation of the petrochemical complex
Work is being completed on preparation of projects aimed at
organization of open joint-stock companies on the basis of the following
Republic"s Unitarian Enterprises (RUE): "PA "Polymir", SPA "Azot", "BTC
"Belshina", "Svetlogorsk PA "Khimvolokno", "PA "Naftan", and "Mogilev PA
"Khimvolokno". It is planed to conduct incorporation of the Grodno
Production Amalgamation (PA) "Khimvolokno" at a later stage. Evaluation of
state property at the enterprises has been completed. Open joint-stock
companies will be formed, at the initial stage, with 100% state capital,
followed by subsequent sale of a part of shares at investment contests. The
second stage is planned for selling a part of state-owned shares at
investment contests with subsequent investing of capital directly into
incorporated enterprises according to agreed terms and conditions. For all
enterprises, lists of essential investment projects have been developed and
such actions are to be held in the near time.
Liberalisation of economic relations
Use of stimulating role of taxes, a step-by-step reduction of
their number and tax burden, and simplification of collection mechanism
To lower the tax burden on the economy of the Republic, the rate of
the tax on profits was reduced from 30 to 24% as from 1 January 2002
(Article 7 of the Law of the Republic of Belarus "On Making Amendments and
Additions in Certain Legislation Acts of the Republic of Belarus on Issues
of Taxation" dated 8 January 2002, No. 86-3).
Regulation of the procedure of registration and liquidation of
economic subjects
The draft Decree of the President of the Republic of Belarus has
been prepared that stipulates substantial simplification of the procedure of
registration and liquidation of economic subjects by transition to the
declarative principle of registration. In so doing, economic subjects must
inform in writing the respective registration and tax authority about those
types of activities they are planning to perform. Informing about exercise
of the types of activities indicated in the certificate of state
registration of the individual businessman or in foundation documents of
commercial and non-commercial organisations is not required. It is provided
that private unitary enterprises shall be registered at the domicile of
their founder.
Reduction of licensed types of activities
The House of Representatives of the National Assembly of the
Republic of Belarus considers the draft Law of the Republic of Belarus "On
Licensing". Taking into account that licensing of certain types of
activities in the Republic is within the competence of the President of the
Republic of Belarus, it was decided to draft the Decree of the President of
the Republic of Belarus which should reflect types of activities liable to
licensing and other issues concerning licensing. Standards of this decree,
after it has been adopted, will be reflected in the draft Law of the
Republic of Belarus "On Licensing". It is envisaged to reduce the number of
types of entrepreneurial activities liable to licensing from 165 to 42 at
the first stage and, finally, to 10-12.
Introduction of the tax code of the Republic of Belarus
On 29 November 2001, the House of Representatives of the National
Assembly of the Republic of Belarus passed the first (general) part of the
Tax Code of the Republic of Belarus (in the first reading). It is planned
that the second and third parts of the Tax Code of the Republic of Belarus
will be considered by deputies at the next 2002 spring session of the House
of Representatives of the National Assembly of the Republic of Belarus.
Price liberalisation
During 2002, it is planned to take steps towards further
liberalisation of prices (tariffs): reduction of the list of regulated
prices (tariffs) while preserving state regulation in relation to
commodities (work and services) of monopolist enterprises, as well as
individual socially important commodities and services. Work will be
continued in the sphere of regulated price formation aimed at regulating
prices and tariffs in fuel and energy sectors, housing and communal sector,
transport, communication, and agro-industrial complex with a view of cutting
subsidies, including cross subsidising, within the price formation system,
minimising load on industry and budget, liquidating disproportion and
disparities in sectors and spheres of economy. It is planned to implement
the Concept of reduction and liquidation of cross subsidising of housing and
communal services.
Completion of small privatisation
The plans of the Government envisage completion, in 2002, of
destatisation and privatisation of enterprises of trade, public meals and
communal services. As for 1 January 2002, the following percentage of
enterprises had been transformed in the sectors of trade, public meals and
communal services for different cities: Brest 47%, Vitebsk 54%, Gomel 76%,
Grodno 38%, Mogilev 81%, and Minsk 82%.
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