Q: How would you characterise the current state of the Belarus economy and what is the outlook?
A: Modern Belarus is a stable state with a dynamic, developing economy, which takes a leading role among European nations and the Commonwealth of Independent States if we take into account the rate of GDP growth and the level of the development of society.
In the past decade, the stable nature of the development of the Belarussian economy is proved by the more than doubling of growth of its real GDP, the more than tripling of growth of its GDP per citizen, and the 10-fold lowering of the level of poverty among the country's population.
From 2006 to 2010, the average annual GDP growth was 7.3%. The aggregate of good results in the past five years – namely, GDP growth of 42%, the 47.3% growth of industrial production and a twofold growth of investments, together with the successful post-crisis growth of the Belarussian economy, which was 107.6% in 2010 – have brought the country closer to the level of the most dynamically developing countries in the world.
The country has made positive changes towards its goal of a more comfortable business atmosphere and accelerated socio-economic development over the next five years. Working on the state policies of the current five-year period, we assessed our strengths and weaknesses, setting goals and finding a way to achieve them using local reserves and growth opportunities of the global economy.
We recognise that the country, having achieved a number of economic results, has not yet been able to reach a competitive level of productivity. Therefore, today Belarus is on the verge of a new economic policy. The country has been given [a target] – consolidating itself among the 50 most competitive countries in the world. Reaching this kind of target is not [just about] rankings of competitiveness, but achieving world standards on a wide range of areas [within] society.
We are following a formula for the next five years: initiative, innovation and investment. Another [target] is the further development of foreign trade. We have a huge single market of 450 million people in the West – the EU-27; and in the East the Eurasian giants Russia and Kazakhstan hold a market of 160 million people.
We look forward to successfully completing our negotiations on accession to the World Trade Organisation. The next step is no less important – accession to the Organisation for Economic Co-operation and Development. In the future, [Belarus will target] an even more ambitious project – the creation of a common economic area with the EU.
What is happening today in our relationship [with the EU] is just... some politicians holding a desire to divert attention from domestic problems of freedom and true democracy. The reasonable arguments of economic efficiency will ultimately prevail.
Q: How open is Belarus to FDI and which segments of the economy are most in need of investment?
A: Belarus has always been and remains open and attractive to investment of foreign capital, with comfortable living conditions and a strong business environment. This is confirmed by the results of the past five years [from 2006 to 2010]: the amount of FDI into Belarus for this period increased 7.4 times.
The government pays great attention to the creation of favourable conditions for attracting FDI. We consider that it will bring the smooth internationalisation of Belarussian businesses and help us to share experiences with economies in the developed world.
The global share of FDI coming to Belarus is gradually increasing, from 0.13% in 2008 to 0.47% in 2010. In 2010, companies from the following countries invested in Belarus: Russia, Cyprus, Germany, UK, Lithuania, US, Switzerland, Latvia, China, Poland and Italy.
In the medium term, the investment policy of Belarus is to carry out structural changes to facilitate the entry of foreign business in the national economy. Within a given system of coordinates, in 2007 the government began a process of reform that defined a new political set-up to create a more transparent and competitive business environment.
Q: To what extent does Belarus’ negative international image hamper your attempts to attract investment?
A: The way Belarus is perceived in the international political arena naturally affects its attractiveness for foreign investments. However, as you know, business is interested in countries as a platform for investment projects and the indicator of success is profit. And with regards to that, a lot has been done already. Belarus offers favourable conditions for foreign investors. In addition, the government is improving the investment climate by taking advice from experts at international organisations.
The results of these attempts to attract foreign investment are telling. In 2010, the country's economy received some $5.7bn of foreign direct investment, which is 15% more than in 2009. This is more than 60% of the gross inflow of foreign capital. There is a gradual increase in FDI flowing into Belarus. More than 400 investment contracts have been signed, worth about $14bn. There is a growing number of registered companies with foreign capital: from about 2000 in the year 2002 to more than 5000 as of January 1, 2010. In 2010, investment came from 60 countries... We are open to mutually beneficial co-operation.
We hope that the measures taken by the government to liberalise the investment climate will continue to increase the inflow of FDI.