Belarus - Overview
To make a call from: 810
To make a call to: +375
Even today, Belarus' economy remains an economy in transition, inherited from the former Soviet bloc. After its independence in 1991, Belarus slowly adopted market-economy reforms, and in particular numerous privatizations. The country has always maintained close relations with Russia. Since 2005 and the accession of Loukachenko to the power, the country, which had adopted a "market socialism", has re-nationalized many private companies and the pressure from the part of the government has become stronger in the business field: arbitrary changes in regulations, numerous inspections, arrest of businessmen and factory owners.
Belarus obtains gas and oil from Russia at a reduced price and its growth comes largely from the re-exportation of Russian oil at market price which has created a source of tension with Russia. Trade with Russian, by far its largest trading partner, fluctuates according to the tensions between these two countries.
Despite the financial crisis the country is experiencing, the Belarusian GDP has been growing steadily in recent years, reaching 2.1% in 2013 (after 3% in 2012). However, the effects of the global crisis have been deeply felt, especially in the industrial sector.
In great difficulties economically and financially since 2011, the authorities have had to agree to a significant devaluation of the currency, the Belarusian ruble losing over 50% of its value within only a few months. Minsk was been granted a loan of $3.5 billion from the anti-crisis fund of the Eurasian Economic Community to support the economy: inflation reached 35% in 2013. Seeking external funding, Belarus also called on the IMF and requested the establishment of a new "Stand By" program for an amount of up to $ 8 billion. However, according to the IMF, the lack of progress in implementing the necessary reforms and recommendations - such as price liberalization, privatization, floating the currency and wage freezes - will not allow to resolve the situation in the near future. In a statement made in June 2011, the World Bank described the economic model of Belarus as "out of breath." 2013 has been relatively stable after the 2011 crisis but without structural reforms strong trade deficit are recurrent. Belarus, a "breathless country" according to the World Bank, was saved from bankruptcy thanks to the financial help of Russia, a country which help remains critical to the country in 2014.
The industry sector accounts for 38.5% of the GDP and employs over 35.5% of workforce. The main industries of Belarus are machine tools, agricultural equipment, fertilizers, chemical products, prefabricated construction material, motor vehicles, motorcycles, textiles and some consumer products (such as refrigerators, watches, televisions, and radios).
The tertiary sector contributes to 52.2% to the GDP and employs more than half of the Belarusian workforce (57%).
Foreign trade overview
The country's main import partners in 2013 were Russia, Germany, China, Ukraine and Poland. Belarus is an important transit country for oil from Russia, which has guaranteed supplies of oil and gas at below-market rates for many years.
Its main customers are Russia, the Netherlands, Ukraine and Latvia.
The country's sustained economic growth has nonetheless been accompanied by significant external imbalances, especially of its trade deficit, which has deteriorated significantly in 2011 before being reduced to around 415 million USD in 2013. Since spring 2011, the country has been experiencing a severe currency crisis. The devaluation of the Belarusian ruble in May 2011 has not been a sufficient short-term solution and continue to have a great impact on the country's foreign trade.
The trade balance remains largely negative, particularly because of the rising prices of oil sold to Belarus by Russia. In 2014, Russia remains the largest trading partner of Belarus, a country appearing more and more isolated and over dependant on its neighbor.
Foreign capital inflow has increased in the first half of the 2000s. However, it has been declining since 2008 due to the global economic crisis on the one hand, and the country's strong dependence on Russia, on the other hand. Belarus' five main investors are Russia, Switzerland, Austria, Germany and Latvia. The most attractive sectors to foreign investors are construction and metallurgy, consumer goods, chemical and petro-chemical products, wood, transport and the medical sector.
In 2013 FDI reached USD 1.442 billion. The recovery of FDI inflow into Belarus in 2014 will depend on the economic health of its Russian partner.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).