Vasili Matyushevski, first deputy prime minister

Q: This is a time of great economic uncertainty in the region – both economically and politically. How confident are you that Belarus can be protected from any potential economic crash in Russia, or from any turbulence caused by armed conflict in Ukraine?

Advertisement

A: The situation in the region is extremely unstable from all perspectives. There are many factors which considerably complicate the economic situation: from global fluctuations in oil prices to issues related to the Ukrainian economy and the sanctions imposed upon Russia. And it is happening at a time when we are still feeling some effects of the global economic crisis. The critical situation in Ukraine, caused by an armed conflict in the east of the country, has not only done considerable damage to the Belarusian-Ukrainian economic co-operation, but also poses a serious threat to regional stability and security.

Moreover, as far as the geopolitical aspect is concerned, the threat of new division lines being drawn in Europe has emerged, and the prospect of Belarus finding itself in the 'fault line’ is extremely undesirable.

Our economy is open, which means that more than 60% of our production is exported. More than 40% of national goods are exported to Russia, with about 30% to EU countries. We are interested in the constructive development of co-operation with Russia as well as the EU. We are aiming to build an innovative economy, and Belarus is interested in attracting Western investments and technologies.

In this context it would be overly optimistic to suggest that our country is protected from serious internal economic threats. However, for the past couple of years we’ve been doing our best to liberalise our economy and to diversify our exports through finding niches in other markets – not only in Europe, but also in more remote regions. We are paying particular attention to the developing economies of Latin America, Africa, east and south-east Asia, as well as the Far East. We have already made some progress in this field. In 2014, by expanding into other markets, we managed to make up for $1bn-worth of losses [caused by] our falling exports to Russia.

The present political and economic crisis in Ukraine – with the withdrawal of economic obstructions and limitations which, by the way, are typical of our relations with the EU – are of great importance to Belarus.

And in the future [Belarus can look towards even greater] economic co-operation with the main European [bodies] – the EU and the Eurasian Economic Union – as we take steps towards putting the idea of the ‘integration of integrations’ into practice, which give us access... to the real economic co-operation that we lack so much today.

Alexander M Zaborovskiy, first deputy minister of economy

Q: How do you see the current economic situation in Belarus?

A: If I were to explain the current situation in one word, it would be ‘stable’. The strategy we are implementing is based on four main pillars: flexible exchange rates, budget consolidation, tight money policy and accompanied by economic structural reform.

In January this year we had a big surplus in the trade balance – more than $500m. In previous years we had a substantial trade deficit because of excessive domestic demand. But due to exchange rate flexibility and a tight macroeconomic policy, which led to the deceleration of domestic consumption and investment, Belarus is now experiencing macroeconomic adjustment. 

So we have a stable macro situation and it is providing the basis for improvements in our institutions, and for bringing about structural changes in our economy, this year and in the coming years. In 2016-17 we will see a strong economic [performance that will] support economic growth and offer new routes to growth.

We understand the challenges that our economy faces but we are trying to solve these problems, and find opportunities to... discover new drivers of growth. This is our [aim] – to find possibilities even in times of extraordinary changes.

Q: What is your economic outlook for rest of this year?

A: This year we do not expect expansion in the Belarus economy, so obviously we do not expect much economic growth. It depends on developments in Russia and Ukraine, and the efficiency of our strategy of trade diversification, but we do not expect growth. It should be close to zero. However, we are using this time to create new competitive factors for development, and to activate new sources for sustainable economic growth in the future.

Kiryl Rudy, economic advisor to the president of Belarus

Q: What are the most pressing economic priorities for Belarus this year? What is top of the agenda for the president?

A: Last year, in November when the government presented forecasts for 2015, the president announced the number one priority was not to allow the real income of the population to fall. We are facing problems in raising the income. We should also increase competitiveness through other methods – by changing government regulation, by improving corporate regulation, by decreasing the costs faced by companies, by changing the investment plan for the next few years to stabilise the real income of the people of Belarus.

Q: What are the plans for privatisation? There have been various announcements over years but many are frustrated by the slow pace of development. 

A: Previously, there were different plans and announcements, and we are now [suffering because of this]. So now we don’t want to announce something until it is ready. We are working on this issue. But right now hard to say [too much on this issue].

Q: From your point of view, what reforms are needed to attract more investors to Belarus?

A: Investors should be confident about their capital in the country. This is the number one priority for us, [to instil] confidence for different types of investors. For some [they need convincing over our] legal system, others [need reassurance from] the leader of the country. So we are open to any kind of investment and ready to provide any type of guarantee. 

As our president once said, if foreign investors put money into our country, it is [then] the money of both of us, so we treat, guarantee and defend this money as our own.