Dean of the Faculty ERI BSEU
Where is it – the place of the Belarusian economy in the world economy? In the state of a Belarusian goods to press on the world market the products of foreign competitors? Make us what we can, we do not, do we have a potential for growth or all the really bad? How to survive in global competition? How to find your place in the world market?
The choice of a strategy to exit our country to foreign markets and finding niches in the market in the domestic air TUT.BY said Dean of the Faculty of International Economic Relations of the Belarusian State Economic University Galina Shmarlovskaya.
Belarus has found its place in the world economic system? Among which countries and specializes in what our country? Belarus belongs to the category of countries with small open economies. Given the resource base available to it, we can not produce so many products, which could influence the situation on world markets and, consequently, the formation of world prices. To have everything you need, we have to import some goods, and this exchange requirement. Hence, we need to develop national production in excess of domestic needs and export-oriented national products abroad. Because of this feature of Belarus as a country with a small open economy is oriented towards international specialization. These indicators of the openness of our economy as export and import quota, with some fluctuations are sixty percent. This is quite high. However, the problem of openness of the Belarusian economy still exists. International specialization suggests that we have both a subject and an object of the international division of labor. We specialize primarily predetermined by a significant number of manufacturing industries. In view of global trends is very good for Belarus, as we not only extract raw materials, but also and we will handle the complex. The predominant industries in our country are machinery, petroleum refining, chemical and timber industries. Moreover, the share of machinery and metal processing in Belarus is more than 25 percent. This figure corresponds to international standards. Republic of pursuing a multi-policy. We cooperate with the European Union, the United States, Latin America, as well as with the Asia-Pacific region. During the current 2010 set new and interesting projects with China, Vietnam. Of course, we cooperate with Russia. But over the last ten years the share of trade with Russia is shrinking and with foreign countries – is increasing. If you look at ratings of trading partners, followed by Russia are EU countries.
Can the creation of the Customs Union to change this situation in the opposite direction? The Customs Union will make our exports more expensive in the region due to the reduction of customs duties due to the introduction of the Common Customs Tariff. This will facilitate the trade between Belarus, Russia and Kazakhstan, and will benefit all the members. But it does not cease cooperation with other countries.
I would like to clarify on what could specialize in Belarus and if we have more untapped reserve? Elected innovative way of development which is intended to increase the emphasis on the development of new technology-intensive industries. In turn, this implies the existence of highly qualified personnel that we have. And here we are also in line with global trends. In large Belarusian enterprises for a long time started the process of transfer of individual units of production outside the country to create a variety of assembly, as well as joint ventures. For example: Tractor Plant, MAZ, BelAZ. This suggests that opportunities are created for the release of labor and financial resources and shift them to produce more high-tech products.
The basis of the Belarusian economy are industrial giants. What strategies are used or may be used for their integration into world economic relations? Are they ready for this, and does not come from this integration is a threat to Belarusian giants? Occurrence problem and find its place in the world market and the global economy remains. We must become equal partners. Our major businesses use many technologies to enter the international market. And it’s not only the export of finished products. The practice of developed countries has shown that use only the export of finished products is not always effective, especially in the context of high import duties. The economic crisis has reinforced the protectionist tendencies. National enterprises, except for manufactured exports, went to the export of capital, which is being created through assembly plants in different regions of the world. This is one of our strategies – the transition on the basis of international production networks on the export of goods to the export of capital and the organization of productive activities. The development of productive activities in one country or another, firstly, allow to consolidate the position in the developed markets. Second, our businesses have the opportunity to enter the markets of neighboring countries. That is, there are solved two problems. Also actively used by the fragmentation of production, for example, when exported vehicle sets. In this case develops specialization not only in the production of finished products, but also in the production of components and assemblies. They come in a country where there are specific users of these products. An example is the Minsk Tractor Plant, which supplies finished products and components in China, Venezuela and other countries. Overall, goods-producing network operates by means of which is increasing scope for exports. What about threats for large enterprises in Belarus? Yes, the more a country opens its borders, the greater the probability increases and threats to national security. There should be a reasonable compromise at the opening of borders to the flow of imported goods. Thus, the customs union entails a certain risk due to increased numbers of shipments from Russia. For example, in the integration of a large competitor for MAZ KAMAZ is. There are growing problems for the realization of national production, but the integration and creates conditions and opportunities for cooperation. Lawfully determine which components of each of these specialized companies. Threats of integration exist, but you can always find a compromise.
Are there examples of correct selection and successful implementation of an exit strategy and work in foreign markets? As I said, it’s goods-producing operation of the network. For example, foreign goods-producing network of the Ministry of Industry according to the 2009 operated in 63 countries, including the work of more than 1200 dealership structures, 92 of the subject goods-producing network with Belarusian investments, 54 assembly production in 15 countries. As of April 2010, the goods-producing network is already 94 enterprises, and for the current year is planned to create 28 more assembly plants – in Russia, CIS countries and 10 foreign countries.
Can small and medium businesses to be links in the production chains of large international companies? International experience confirms the validity of this. When it comes to big business, and taking into account international practices, we must continue the idea of further enlargement of the enterprises with the cooperation with small and medium-sized businesses. During the twentieth century was a period when big companies of developed countries, demonstrating the advantage, a policy of strangling small businesses. In the 80 years in developed countries began a renaissance of small business, a period of cooperation. Large enterprises become economically more profitable to finance a small business to those engaged in medical research. It was during this period appears venture capital. We can also occupy this niche. We have the technology parks and enough qualified experts who can engage in research activities. The more that transnational corporations are often very keen interest in the transitive countries. In the early days of perestroika, they used the transitive countries mainly as a distribution network for selling its products. Now the situation has changed, and they are considered from the perspective of the possibilities of using locally produced, standardized products, including manufactured at the Belarusian enterprises, development of research and development. There is an opportunity to occupy a niche for national small and medium companies, to become a link in a chain of large companies.
Practiced abroad participation by small and medium-sized business forms in the production process of large enterprises for the manufacture of parts and components. Is it possible introduction of such practices among us, in our economy? After all, we have a socially oriented economy. Do not have time to close some lines on these large companies? Small business soon rebuilt, and responds to changing needs and tastes of consumers. We are not talking about all industries. For example, in the light industry with small and medium-sized businesses can close many of the issues such a plan.
Why then have not done it? For several years it is impossible to solve all problems at once. You can certainly make the thesis of the closure of large enterprises and splitting them into smaller ones. Do not forget about the mass of social problems. In this case, I am a variant of evolutionary transition and business transformation. Take, for instance as an example of a Belarusian large enterprises of their network structures, in which part of the production is driven out of the country. This is the opportunities to free resources and the commencement of an entirely new high-tech products with small and medium-sized businesses. At the time, I was surprised that 80% of the newly developed sample does not reach mass production. In this case, small and medium-sized businesses can have a large very substantial assistance. Through the development of scientific research and the establishment of pilot plants aprobiruemaya products can go into production or it simply will not have to be put on stream. It is through the elements of collaboration, cooperation, and taking orders from large enterprises and small medium-sized companies. It is clear that the tractor they will not release, but the use of new technologies for the production of certain items quite be possible.
The principle of the international division of labor is not contrary to the adopted in the orientation of Belarus on the issue of import substitution? What is import substitution to Belarus? Belarus defined model of export-oriented and import substituting production. Many newly industrialized countries went through such a model. But first we must define the concept. Most think that import substitution is used to ensure that we possibly did not buy goods abroad, and to produce themselves. This is not quite correct understanding of the idea of import substitution. First, one of its aspects – the rationalization of imports, that is, if we can produce quality products using the latest technology, we have to do it. Second, import substituting production – is manufacturing and exports. Why was the idea of import substitution? To date, the global economy there is a network organization of production. Developed countries, in order to focus on the development of knowledge-intensive high-technology manufacturing, it was necessary to free up resources and capacities. The technological process has been split into parts, and the developed countries have begun to carry mostly resource-and labor-intensive industries to developing – mainly Asian and Pacific region. In the newly created company transferred technology and trained personnel. Specialization was defined for the production of components and spare parts. But over time, becoming an export-oriented import-substituting products. Need to develop import substituting production, which is different and new technologies that will eventually become export. And if we consider the same newly industrialized countries, there are quite high, exports are not finished products, and those components and parts that they produce – goes up to 70-80%. It was one of those niches, which allowed them to rise to more higher level. If the original orientation of the developed countries has been developing the use of cheaper labor, then as the training due to staff training, there already were transferred to processes at higher levels. The development of import-substituting production – a normal process that does not contradict the world practice. But what possible danger? No need to strive to make all. Such luxuries can not afford any state because of limited resources. Necessary to determine the opportunity costs to compare – how much cost for us to develop import-substituting production compared to if we buy a similar finished product. There must always be calculated.
Is there a Belarus international practice of mergers and acquisitions? Including – cross-border. And the subject or the object of these acquisitions may be Belarusian enterprises? Would not this be yet another threat to the national economy? Strategy of mergers and acquisitions is one of the newest. Although from the beginning of the twentieth century centralization or consolidation of production based on small and medium based precisely on mergers and acquisitions. Beginning of the XXI century was marked by a surge of mergers and acquisitions. Moreover, these processes are affected by major transnational corporations. In order to survive in the competition, despite their power, they went on mergers and acquisitions. We also need to use such a strategy. But today we are the subject of mergers and acquisitions. Mostly it concerns the scope of banking business. To survive in the competition, we have become the subjects of mergers and acquisitions. Only this will allow us to create a horizontally and vertically integrated organizational structure in the form of clusters. Export-oriented nature are clustered petrochemical, machinery, forestry and food industries. In the future, taking into account what is being done at the rate of AIC, and possibly in those industries. Suppose we are dependent on the inflow of raw materials, do not get some kind of raw material, and we’re having problems. Through mergers and acquisitions can go on the acquisition of companies, which for us are the suppliers of raw materials and / or connect to our largest export-oriented enterprises to companies that are our customers. This is a way of creation of clusters, including by bringing in companies abroad. It will also strengthen the position of our businesses are becoming international, and not just because the export or import goods, but also by the nature of activities.
Since you represent the Belarusian State Economic University? I would like to talk a bit about him. The University specializes in training, including for foreign trade. How do you assess the level of the today’s managers and leaders? What has changed in the preparation of professionals in recent years? The faculty, which I represent, is preparing for a new educational standard of the specialty “World Economy”. Within its framework, we are preparing economists in foreign trade activities, as well as about seven years, provide training for specialization, “International Investments”. Given the challenges of attracting investments is clear that these experts we really need. Students focus on the new level of theoretical training. They are ready for production activities at the enterprises in the relevant departments, ministries, concerns and so on. However, beginning with the fourth course, a private business, “buying” our boys. And sometimes it becomes a shame that when the process of distribution, private industry, knowing how hard it is on the market, placing increasing demand and try to “buy” our boys. The more so than non-knowledge of foreign trade, finishing university, students are fluent in two foreign languages. Upon delivery of final exams, they receive a certificate and another assistant and interpreter. In addition to the global economy at the Faculty are trained in the specialty, “Business Administration” as the study of two foreign languages. Also on “Economy”, which allows students to receive a diploma, which is the right job, not only as an economist, but also a teacher.
How does the number of students wishing to enroll in the Faculty of Economics? Does growing popularity of the profession? Popularity is growing. As for our faculty, the highest pass rate last year was just us. It is very nice. So, come only the best. The needy in exchange for labor graduates of our university there. I think this is also an indication of the level of student training.
We wish to continue your university’s alumni not joined the ranks of labor exchanges, so that they are in demand in the labor market in our country and that they have raised including our economy. Korovayko Andrew, TUT.BY