A high rate of economic growth in Belarus – an average of about 8% annually from 2001 to 2011 – has helped reduce poverty almost seven-fold. A favorable external environment supported the economic growth in Belarus.
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OpinionsConsumer perceptions:"Whether payments are fair or not depends on how well the houses are heated. My place is heated well, so I am satisfied with the payments.""I pay an unfair ... Show More +amount, as it is cold at my place, and I think that there are heat losses, and I have to pay for them. See how much heat is lost: cats and dogs lie along heating pipelines, and there is no snow.""Usually, people know meters installed in their apartments. And we do not go down there… None of the residents goes and checks them. Thus, we do not trust the way they measure.""If we have a controller in the basement, it will ensure equal temperature for everyone. But I like it when it is warmer. I will increase the temperature for myself… Yes, I will have to pay more, but I will feel comfortable. Others like it when it is cooler. Why should these people pay the same?""All these energy saving measures (heat insulation, replacement of windows etc.) help us keep the heat, but we cannot reduce the expenses on heating. Only individual meters will allow us to save.""Based on our salaries, we pay a fair price for heating services. Judging on the expenses, we pay less.""Expenditures on public utilities, say, in the amount of BYR 200 000, are comparable to a single visit to a grocery store.""I do not have to save heat. My neighbor saves energy and pays BYR15 000 – 20 000 less than I do but he has to wear warm clothes while I can wear a T-shirt.""If the public utilities would cost, say, $100 but my salary would enable me to pay for them and still have money left for food and other expenditures than it should be OK.” (Middle-income household)"If the public utilities costs increase by 100 000 rubles and the salaries increase by 100 000 rubles, then we would be able pay the bills." (Household receiving social assistance benefits)Focus group discussion, Qualitative social impact analysis of district heating tariff increase, 2014 Show Less -
Minsk, July 25, 2014 - The current heating tariff system in Belarus is inefficient, unsustainable in the long run, and undermines industry competiveness and risks macroeconomic instability, says... Show More + a World Bank’s study Belarus: Heat Tariff Reform and Social Impact Mitigation.The report analyses the social, sectoral and fiscal impacts of the heat tariff reform considered by the Government and provides recommendations for developing a sustainable district heating sector and working out measures to mitigate adverse impacts of the heat tariff increases on the households.According to the report, underpriced residential heat tariffs for district heating, that are currently at 10-21 percent of cost-recovery level, place an increasing fiscal burden on the budget and industrial producers. Because of the cross-subsidies from industrial to residential consumers, Belarusian manufacturers do not benefit from the low import price of natural gas. As a result, the tariff set for the industries is higher than the European average.The report warns that the current system of subsidies to the population is poorly targeted. Instead of identifying the poorest households and providing subsidies to them, the subsidies are provided to all households regardless of their income. The existing social protection mechanisms need to be adjusted to support the poor and vulnerable groups in the event of a tariff reform. “An effective social assistance package provided along with the elimination of subsidies would enable the Government to protect the poor, without jeopardizing the reform,” noted Young Chul Kim, World Bank Country Manager for Belarus. “Investment in energy efficiency could also significantly reduce consumer energy bills. The analysis shows that energy efficiency measures could reduce household heat consumption by up to 35 percent compared to the present.”In order to build momentum for the heating tariff reform the report recommends (i) enhancing customer communications and engagement to address the existing knowledge gap among residential consumers on tariff setting and the proposed reform; (ii) improving social protection mechanisms, and (iii) encouraging investments in energy efficiency both at production and consumption stages.The current World Bank investment lending portfolio in Belarus includes 5 operations for a total amount of US$ 647.51 million. Since the Republic of Belarus joined the World Bank in 1992, commitments to the country have totaled USD 1.14 billion. In addition, grant financing totaling USD 25 million has been provided to programs including those with civil society organizations. Show Less -
What Are the Belarussian government’s plans for the district heating (DH) sector?National and energy sector programs outline specific investments and targets for the DH sector, such as increasing the ... Show More +use of biomass in heat generation, increasing cost-recovery levels, improving supply side energy efficiency, and restructuring the DH sector.Why is tariff reform necessary?Residential tariffs are well below the cost of service, and cross-subsidies are used to fill most of the gap between residential tariffs and actual cost, undermining the competitiveness of industries and increasing prices of consumer goods and services. Subsidies also create a growing fiscal burden, significantly increase fiscal risks and macroeconomic vulnerabilities, while being highly regressive and unfair to poor customers.What is the likely impact of tariff reform?The impact of tariff reform depends on how it is implemented. The financial burden on households, especially those who are poor, will increase both in rural and urban areas, and especially during the coldest times of the year when people are forced to cut spending on other essential goods. However, tariff increases will generate fiscal savings and boost utility revenues, while lower cross-subsidies will improve industry competitiveness.How can tariff reform be implemented in the best possible way? Improve communication and consumer engagement by developing a comprehensive communication strategy and improving consumer engagement and the governance of utility services.Improve social protection mechanisms by linking mitigation measures to the existing transfer program, re-introducing the Housing and Utility subsidy benefit, or adopting levelized payment plans.Foster investments in energy efficiency to realize large energy savings potential in the DH sector by improving incentives for supply-side energy efficiency uptake, investing in DH infrastructure and putting in place demand-side measures. Energy efficiency investment can reduce household energy costs, while fiscal surplus can fund social assistance programs. Show Less -
ST. PETERSBURG, July 21, 2014 – The introduction of pension mobility within the emerging Eurasian Economic Union is an essential step towards regional economic integration, according to the “Pension M... Show More +obility within the Eurasian Economic Union and the CIS” report, launched today in Russia.Initiated by the Centre for Integration Studies of the Eurasian Development Bank (EDB Centre) and the World Bank (MIRPAL regional migration program), the report introduces the concept of labor pension mobility between labor recipient countries (Russia, Kazakhstan, and Belarus) and labor donor countries (Kyrgyzstan, Tajikistan, and Armenia). Pension mobility is a process of inter-state reciprocal recognition of labor migrants’ pension rights. According to the report, introduction of pension mobility in the context of labor migration processes within the emerging Eurasian Economic Union can build on the EU countries’ best practice experience. “Providing the free movement of labor is one of the fundamental functioning principles of any economic union. However, lifting registration barriers and simplifying regulatory approvals for labor force migration between countries of the Common Economic Space and the Eurasian Economic Union could not be effective unless social guarantees are to be provided,” says Stepan Titov, World Bank senior economist and MIRPAL program head.International best practice proves that if donor and recipient countries use different social security systems, the issue of pensionary payments could be resolved through coordination of pension assignment rules. This coordination provides that pensionary assignments and payments are to be made by the pension fund of the country where the labor worker resides and applies for pensionary support. The pension fund of that country will then receive transfers (compensation) from the pension fund of the other country, where a labor migrant has worked. Compensation payments / transfers can be pro-rated based on the number of years that have been worked abroad. Today, overall coordination between countries and their pension funds has not yet been developed in the CIS countries, nor within the framework of the Common Economic Space. However, there is a necessity to improve living standards and provide a decent life for labor migrants as they get older. From the macroeconomics point of view, an efficient pension mobility system could help improve the mobility, flexibility, and efficiency of the labor force as a production factor, as well as help raise the global competitiveness of the Eurasian Economic Union.“Pension mobility should become part and parcel of the free movement of workers, as should concerted social policies within the emerging labor market of the Common Economic Space,” says Yevgeny Vinokurov, Director of the EDB Centre for Integration Studies. “In the long-term, formation of a common pension space in the countries of the Common Economic Space and the Eurasian Economic Union can mark a step forward to reducing the scope of illegal labor migration and to developing labor relations of a higher quality.”Introduction of labor migrants’ pension mobility is an important item on the agendas of the Common Economic Space and the Eurasian Economic Union. The proposed pension mobility mechanisms could help resolve problems related to labor migrants’ pension payments that are of vital importance to tens of millions of people.The full text of the study is available here.Background The Eurasian Development Bank (EDB) is an international financial institution set up by Russia and Kazakhstan in January 2006 to facilitate the development of the market economies of the participating countries, their stable economic growth, and the expansion of their mutual trade and economic relations. The EDB charter capital is over USD 1.5 billion. The EDB participating countries are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.More detailed information about the EDB is available at http://eabr.org/e/.The Centre for Integration Studies is a specialized analytical center of the Eurasian Development Bank with responsibility for organizing research and preparing reports and recommendations on problems of regional economic integration. Details of the Center’s projects and publications are available at http://eabr.org/e/research/centreCIS/aboutCIS/MIRPAL (Migration and Remittance Peer-Assisted Learning Network) is a community of migration and remittance practitioners and experts representing governmental and non-governmental organizations from nine CIS countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan, and Ukraine. The project, initiated by the World Bank in 2009, is widely recognized as a forum for successful cross-country collaboration in the area of labor migration policy. The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Working together in more than 100 countries, these institutions provide financing, advice, and other solutions that enable countries to address the most urgent challenges of development. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org Show Less -