Structural Challenges for SOEs in Belarus : A Case Study of the Machine Building Sector

Favaro, Edgardo; Smits, Karlis; Bakanova, Marina

Structural Challenges for SOEs in Belarus : A Case Study of the Machine Building Sector

Autores

Favaro, Edgardo

Smits, Karlis

Bakanova, Marina

Editor

World Bank, Washington, DC

Descripción

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?

Palabras clave

AGRICULTURE, ASYMMETRIC INFORMATION, AUTOMOBILE, AUTOMOBILE INDUSTRY, AUTOMOTIVE INDUSTRY, AVERAGE PRICES, BANK POLICY, BENCHMARKS, BUS, BUSES, BUSINESS ENTITIES, CAPITAL ASSETS, CAPITAL INVESTMENT, CAPTIVE MARKET, CATERING, CIVIL CODE, COMPETITIVENESS, CONSUMER GOODS, CORPORATE GOVERNANCE, CUSTOM, CUSTOMS, DEBT, DEBTS, DECISION MAKING, DEPOSITS, DEVELOPMENT POLICY, DIESEL, DIESEL ENGINES, DIRECT MARKET, DISCOUNTED VALUE, DISTRIBUTION CHANNELS, DOMESTIC MARKET, DURABLE, DURABLE GOODS, ECONOMIC ACTIVITY, ECONOMIC ASSETS, ECONOMIC SECTORS, ECONOMIC VALUE, ELASTICITY, ELASTICITY OF DEMAND, ELECTRICITY, ENTERPRISE OPERATION, ESTABLISHED BRANDS, EXCHANGE RATES, EXPENDITURE, EXPENDITURES, EXPORT MARKETS, FINANCIAL CRISIS, FINANCIAL STRUCTURE, FINISHED PRODUCT, FIRM PERFORMANCE, FIXED ASSETS, FIXED CAPITAL, FOREIGN DIRECT INVESTMENT, FUEL, GDP, GOVERNMENT OWNERSHIP, GOVERNMENT POLICIES, GOVERNMENT POLICY, HEAVY TRUCKS, HOST ECONOMY, INCOME ELASTICITY OF DEMAND, INDUSTRIAL PRODUCTION, INDUSTRIAL STRUCTURE, INDUSTRIALIZATION, INEFFICIENCY, INFORMATION ASYMMETRIES, INNOVATION, INNOVATIONS, INSURANCE, INSURANCE SYSTEM, INTERMEDIATE GOODS, INTERMEDIATE PRODUCTS, INTERNATIONAL BANK, INVENTORIES, INVENTORY, INVENTORY LEVELS, INVESTMENT FUNDS, INVESTMENT POLICY, JOINT STOCK COMPANIES, LACK OF COMPETITION, LEVIES, LOCAL CURRENCY, LORRIES, MANUFACTURING, MARGINAL PRODUCT, MARKET ACCESS, MARKET BENCHMARK, MARKET CONDITIONS, MARKET DISCIPLINE, MARKET ECONOMIES, MARKET ECONOMY, MARKET FORCES, MARKET INFORMATION, MARKET NICHE, MARKET SEGMENT, MARKET SHARE, MARKET SHARES, MARKET VALUE, MATERIAL, MERCHANDISE, MERCHANDISE EXPORTS, MINISTRY OF TRANSPORT, MOTOR VEHICLE, NEGATIVE SHOCK, NEW TECHNOLOGIES, NEW TECHNOLOGY, OIL PRICE, OIL PRICES, OPEN ACCESS, OPPORTUNITY COST, OPPORTUNITY COSTS, ORGANIZATIONAL INNOVATIONS, OUTSOURCING, PRICE DYNAMICS, PRICE LEVEL, PRICE PRODUCTS, PRICE STRUCTURE, PRIVATE SECTOR, PROCUREMENT, PRODUCER PRICE, PRODUCER PRICE INDEX, PRODUCT CATEGORIES, PRODUCT CATEGORY, PRODUCTION COSTS, PRODUCTION PROCESS, PRODUCTIVITY, PROTECTIONISM, QUALITY OF SERVICES, RAILWAY, RELIABILITY, RESERVES, RESULT, RESULTS, RETURN, RETURN ON ASSETS, RETURNS, RETURNS TO SCALE, SAFETY, SAFETY NET, SALE, SALES, SALES CHANNEL, SHADOW PRICE, SHAREHOLDER, SHAREHOLDERS, SOFT BUDGET CONSTRAINTS, STATE GUARANTEES, SUPPLIER, SUPPLIERS, SUPPLY CHAIN, TARGETS, TAX, TAX SYSTEM, TECHNOLOGICAL INNOVATION, TECHNOLOGICAL INNOVATIONS, TOTAL COSTS, TOTAL SALES, TRADE DIVERSION, TRADING, TRANSACTION, TRANSACTION COSTS, TRANSPARENCY, TRANSPORT, TRANSPORT EQUIPMENT, TRANSPORT SECTOR, TRUE, TURNOVER, UNEMPLOYMENT, USERS, VALUATION, VALUE ADDED, VALUE OF ASSETS, VARIABLE RATES, VEHICLE MANUFACTURERS, VEHICLES, VERTICAL INTEGRATION, WAGES, WEB, WORLD MARKET, WTO