OFFICIAL REPORT BELARUS sustainable economic growth

OFFICIAL REPORT PUBLISHED BY FIRST HE ALEXANDER LUKASHENKO, PRESIDENT OF THE REPUBLIC OF BELARUS We’re expanding internationally, to serve you globally.

At FRANSABANK, we’re expanding our network so that we can be right by your side wherever you choose to go, providing you, as always, with the best banking services. OFFICIAL REPORT BELARUS sustainable economic growth Offi cial Report published by FIRST to mark the Belarusian Investment Forum and the visit of HE Sergei Sidorsky, Prime Minister of the Republic of Belarus

Published by FIRST, 56 Haymarket, London, SW1Y 4RN Tel: +44 20 7389 9650 Fax: +44 20 7389 9644 Email: [email protected] Web: www.firstmagazine.com Chairman and Founder Rupert Goodman Chairman, Advisory Council Rt Hon Lord Hurd of Westwell CH CBE PC Chief Operating Officer Eamonn Daly, Consultant, Public Affairs Sir Patrick Cormack FSA MP Non-Executive Directors Timothy Bunting, Hon Alexander Hambro, Executive Publisher and Editor Alastair Harris Head of Corporate Business Andrew Tweedie, Regional Publisher Declan Hartnett, Production Manager Helen Fordham, Marketing Administrator Chris Cammack, PA - Chairman’s Office Hilary Winstanly Editorial Consultant Jonathan Gregson, Secretariat Gil Pearson, Design Consultant Stanley Glazer, Senior Staff Writer Nicholas Lyne Award Advisory Panel Rt Hon Lord Woolf of Barnes, Lord Dahrendorf KBE, Rt Hon Lord Howe of Aberavon CH QC, Hon Philip Lader, Lord Plant of Highfield, Chief Emeka Anyaoku GCVO TC CFR, Marilyn Carlson Nelson, Sir Robert Wilson KCMG, Dr Daniel Vasella, Lord Marshall of Knightsbridge, Morris Tabaksblat KBE, Ratan Tata and Howard Schultz. Special Adviser, China, Lord Powell of Bayswater KCMG, Special Adviser, Russia Sir Andrew Wood GCMG Special Adviser, Latin America Jacques Arnold, Special Adviser, International Emily Kendall Special Adviser, Global Issues Professor Victor Bulmer-Thomas CMG OBE, New Business Advisers Charles Meyer, Amy Easterbrook

FIRST MAGAZINE IS COMPOSED OF THE OPINIONS AND IDEAS OF LEADING BUSINESS AND POLITICAL FIGURES. ALL INFORMATION IN THIS PUBLICATION IS VERIFIED TO THE BEST OF THE AUTHORS’ AND PUBLISHERS’ ABILITY, BUT NO RESPONSIBILITY CAN BE ACCEPTED FOR LOSS ARISING FROM DECISIONS BASED ON THIS MATERIAL. WHERE OPINION IS EXPRESSED, IT IS THAT OF THE AUTHORS.

© FIRST 2008 FIRST MAGAZINE GRATEFULLY ACKNOWLEDGES THE ASSISTANCE OF HE ALEKSANDR MIKHNEVICH, AMBASSADOR OF THE REPUBLIC OF BELARUS TO THE UNITED KINGDOM AND THE STAFF OF THE EMBASSY OF THE REPUBLIC OF BELARUS COVER IMAGE, HE ALEXANDER LUKASHENKO, PRESIDENT OF THE REPUBLIC OF BELARUS, PROVIDED BY ANDREI STASEVICH FIRST

BELARUS

t is right to welcome the visit active the flow of trade and investment, to this country of the Prime the stronger will be the chance of a Minister of Belarus, Mr fruitful meeting of minds. I Sergei Sidorsky. From this point of view it is good We are glad to see him here where news that, for the time being at least, he will see our political system in there has been a relaxation of the action and interact with it, and we will European Union rules about visits enjoy our discussions. The European from Belarus. I hope that circumstances Union is a group of twenty-seven will be right for this relaxation to be democratic states whose systems are sustained and extended. Belarus has based on the principles of free market shown that it is determined to pursue economics, free elections and the its own foreign policy independent open expression of views. of others. It has achieved in recent We all believe that these are years a remarkable level of economic natural and sound foundations for any growth and possesses a highly Introduction by European country. But this does not skilled workforce. This report shows The Rt Hon Lord Hurd mean that we presume to impose out how these assets can be married to of Westwell ch cbe pc of our own experience the pace or form corresponding qualities in Europe, of political or economic development which should make possible Chairman, FIRST in Belarus. On the contrary, the closer increased trade and investment to Advisory Council the contacts and in particular the more the advantage of all sides. F

3

FIRST Glassworks Neman since 1883 The followers of masters from the famous Diatkovo factory. J. Stolle and V. Kraevski organised the production of glass on the picturesque bank of the river Neman.

OJSC NEMAN Glassworks is an enterprise with 125-years story and traditions

Types of production: • manual production of 24% lead crystal articles, clear and colored soda-lime glass articles; • mechanised production of clear soda-lime articles by two machine lines; • production of individual boxes of corrugated cardboard; • construction of a modern furnace for melting of lead crystal; • production of glass package (bottles, jars) since 2010; • glass wool production since 2009.

OJSC «NEMAN Glassworks» 8 Korzuk str., 231306 Beresovka, Lida district, Grodno region, Republic of Belarus • Website: www.neman.by BELARUS

ear Participants and Our government guarantees the Visitors to the Forum, protection of investments, free I am extremely pleased disposal of profits, high quality Dthat we have succeeded service, comfortable and safe in attracting such an authoritative conditions for investors staying business audience to this event. We in our country. The energy, consider your participation to be transport, transit and tourist evidence of the increasing interest by infrastructure, the introduction foreign business in our country, and of new technologies into industry we will support this interest. and agriculture are our absolute The speed at which our economy priorities and the most profitable and revenues have grown during sectors for investing capital. recent years, our stable internal I am convinced that the Forum situation, our dynamic improvements will be a starting point for a whole to the investment climate, our range of projects that will attract Message from convenient geographic position, investors, develop the Belarusian HE Alexander Lukashenko our huge scientific, industrial and economy and improve the welfare President of the human potential – these are just a of its citizens. few of the features that characterise I wish you a fruitful, constructive Republic of Belarus modern Belarus. and interesting time together. F

5

FIRST BELARUS

An investor-friendly economy

BY HE DR SERGEI SIDORSKY PRIME MINISTER OF THE REPUBLIC OF BELARUS

would like to thank you for giving me the us to open up our economy and adopt an active opportunity to appear in the pages of this special foreign economic policy. The priority given to the edition of the authoritative FIRST publication, development of foreign trade and exports constitutes which is dedicated to the Republic of Belarus. the primary strategic aim of our economic policy for IThe Belarusian economy and the economic policy the foreseeable future. we have adopted to date are subject to intense We now have stable foreign trade relations with 180 scrutiny by the World Bank, the International countries on every continent, and 60 per cent of our GDP Monetary Fund and other global and European is connected to foreign markets in one way or another. As research economic institutions. a consequence we have a high degree of dependence on Belarus overcame the systemic crisis that followed global development trends. DR SERGEI SIDORSKY the disintegration of the USSR, on its own. When it The Belarusian economy traditionally had close ties graduated from the was the ‘workshop’ of the Soviet Union, the Republic’s to the economy of the Russian Federation. In the year Belarusian Institute of economy was predominantly industrial and was 2000 the Russian market accounted for over 50 per cent Railway Engineers in characterised by large-scale industrial conglomerates of our exports. But even the most stable relations may the faculty of electrical and mechanical engineering enterprises, oil refining, change over time. We currently export 36.6 per cent of engineering in 1976. In heavy metal, and chemical industries and other our manufacturing output to the Russian Federation, 2001 he became Deputy industrial sectors. In the critical years of the 1990s we and 43.8 per cent to countries in the European Union. Prime Minister of the preserved this industrial base for the national interest, The volume of foreign trade with the United Kingdom Republic of Belarus. From and it now constitutes the foundation of the Belarusian amounted to US$960.9 million in the first half of 2008. 2002-03 he was First economy, and is attracting increasing interest from The United Kingdom occupies seventh place among our Deputy Prime Minister, potential investors from around the world. main trading partners worldwide, and more importantly, then Acting Prime It is of primary importance for the government it continues to grow. Minister. In 2003 he was to devise an economic strategy to encourage further Mechanical engineering and metalworking are the appointed Prime Minister development and define the goals of the state apparatus strategic resources in our foreign trade activity. The of the Republic of Belarus. that are based on socialist principles. Our primary goal Belarusian mechanical engineering conglomerate He is an academician is to raise the living standard and quality of life of our has over 40 sectors, and accounts for around 20 per of the International citizens, and we are implementing an economic model cent of GDP. Tractors and agricultural mechanical Engineering Academy and with a socially oriented market economy as part of our engineering occupy the leading position and are more is an expert in vacuum- overall plan. export oriented than the other sectors. In recent years plasma technologies. He During the relatively brief period – in historical terms new, modern technology has been used to mass produce has written more than 40 – of the autonomous development of our country we cars and modern ‘MAZ’ coaches, energy-saving ‘MTZ’ scientific publications and have adopted a complex range of economic and social tractors with 250-300 horsepower, ‘BelAZ’ dumper monographs. Mr Sidorsky reforms. We have created a money lending system trucks with a freight-carrying capacity of 320 tonnes, and was honoured Workman that meets modern standards, we have strengthened combine harvesters with a capacity of up to 14kg of grain of the Industry of the fiscal discipline and we have substantially improved volume per second. It is the extensive use of this kind of Republic of Belarus. the financial position of the organisations in the real technology that is turning Belarus into a major global economy. We have saved our companies from mass manufacturer of machine-engineering equipment. bankruptcy and various forms of government assistance The implementation of an innovative development have been provided to increase the output of individual programme is accompanied by the transition to the new organisations. These measures have played a positive Belarusian economic model, its adaptation to global role in stabilising the economy. energy prices, raising the research and development Belarus entered the 21st century, having already activity of our companies to meet European standards, overcome its most pressing problems, and it was from substantially raising the level of competitiveness of our this period that we began to build our socially oriented manufacturing output and consolidating our position market economy, which is a continuing process. The among our global competitors. existence of large-scale industrial enterprises with In past years Belarus was frequently criticised 6 limited raw materials and energy resources compelled because our rapid economic development was largely

FIRST sustained by Russia subsidising our economy with for conducting business is one of the main aims of the In 2007 the cheap energy resources. We did not regulate the Belarusian Government. Accordingly, we expect to prices of such resources as we considered, and still increase investments in fixed assets by over four hundred Republic do consider, the people of Russia and Belarus to have per cent during the current five-year period, which will very close ties based on their shared history, language, total around US$80 billion for the said period, and at of Belarus culture and economics. least US$17 billion in the current year. In 2007 the Russian Federation unilaterally withdrew The annual reduction of the tax burden is sending received from these agreements, and the prices for natural gas out a serious signal to investors. And the dynamics from Russia increased by over two hundred per cent are good. For example, in 2006 the tax burden was US$5.4 billion from one day to the next. Our economy withstood this reduced to 0.7 per cent of GDP, in 2007 to 0.8, and blow, however, and our GDP soared to 108.2 per cent; in the current year to 0.9 per cent; there are plans to in foreign our stability on the currency markets was wholly due reduce it to 1.2 per cent of GDP in 2008. to the social commitments and programmes I have Foreign investors have far more rights in the investments, already mentioned. country now. We have adopted and strictly adhere to The prospect of obtaining energy supplies at the Investment Code, which is designed to stimulate which is 23.8 global prices was also accompanied by the necessity investment activity with government support. of changing our economic policy. We realised that we This new measure to stimulate business was adopted per cent more had to implement an ambitious innovative programme last year in a comprehensive government programme to improve the investment and business climate aimed at developing small and medium-sized towns. than in 2006 in the country. This allows us to allocate essential Businesses in these settlement areas would be given intellectual and financial resources to modernising preferential treatment, mainly in the area of taxation, the national economy by implementing efficient giving them the opportunity to acquire a reasonable investment projects. amount of unused assets under European legislation. With this in mind, during the last six months we A further improvement in the investment and have adopted a series of specific measures designed business climate is linked to the measures that we to radically reform economic legislation and improve are adopting with a view to modernising our national the business climate in the country. These changes economy. We realise that there are still no visible focus on shareholder issues and the privatisation of benefits in the area of taxation; we lack economic state-owned property, functioning of stock markets freedoms, an economy that allows goods and finances and finance markets, taxation, simplification of many to flow freely, minimal government interference in administrative procedures for setting up and closing business activity, development of finance and stock down businesses. markets and other institutions. We have taken decisive steps towards liberalising There is talk of a lack of competitiveness in our the regulatory investment regime, we have abolished business environment. One of our first concerns the ‘golden share’ institution; we have simplified the is therefore, rather than looking at modernising foreign trade regulations, we have made the working our physical capital and technology, to develop and conditions for residents in the free economic zones more improve our economic institutions and our economic stable and attractive. These measures have received organisational mechanisms. international recognition. Belarus has managed to We are simultaneously concentrating our efforts on improve its international business rating for the way it making more efficient use of our existing potential in terms does business by 30 points in one year and is now one of distinct competitive advantages. There are many of them. of the 5 top reformist states. In 2007 the Republic of But the best bet would be to use the transit opportunities Belarus received US$5.4 billion in foreign investments, that our country offers. A significant transport and which is 23.8 per cent more than in 2006. logistics development programme is therefore envisaged, I am pleased to state that almost 16 per cent of these and we consider it to be a very promising opportunity funds, or over 860 billion dollars came from investors for investment. We have also looked at accelerating the in the United Kingdom. Only Russia invested more development of the service sector, including the creation in Belarus with US$1.8 billion. Foreign investments of a modern tourist infrastructure. This sector of the continue to grow in the current year. The country economy also needs investors. has over 4,500 commercial organisations with foreign We are convinced that the Belarusian Investment investments from over 100 countries. Forum in London will provide a good opportunity to We will continue to play an active role in liberalising present the economy and its future opportunities. I hope the investment climate in Belarus. The real improvement that European and British investors alike will gain a in the investment climate in Belarus and the decision to better and more intimate understanding of our economy approach 30 countries and offer them special conditions and will find it attractive. F 7

FIRST Stavcom JSC Launches MAJOR Retail/Entertainment development project in Belarus

he Trading House ‘Stavkom’ JSC spearheads a branded goods, administrative offi ces, restaurant areas, Tgroup of companies including Decorum, DECO casino, hypermarket and multi-level parking space. and others, and has been active since 1989. The objective is to create a retail centre using Stavkom JSC has won a number of awards the latest technology. All the relevant permissions including the 2004 Winner ‘Brand of the Year’ in two have been granted and extensive consumer market categories and in 2007 was the recipient of a ‘Trade research has also been conducted. The projected Leader’s Club’ International Award for both its high investment is some g46 million. growth and business excellence. We are currently seeking world famous retailers The rapid development of infrastructure in Minsk and and would be delighted to hear from potential throughout the Republic of Belarus has resulted in a international partners. We are ready to discuss very active construction market. In 2002 Stavkom JSC proposals for co-operation and to provide further constructed a hypermarket of 7,000 square metres, detailed information. For those interested in selling more than 35,000 different branded goods. participating we look forward to This venture has enjoyed considerable success and welcoming you to Minsk to see the turnover has more than doubled. project fi rst hand. Stavkom JSC, with a partner, has also commenced First Deputy Chairman, Stavkom JSC the construction of a retail and entertainment complex Irina Maiseenko of 130,000 square metres. This will include stores selling [email protected] BELARUS

Encouraging signals

BY DR SUPACHAI PANICHPAKDI SECRETARY-GENERAL OF THE UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT1

he preliminary findings of UNCTAD’s mechanisms, an effective land titling system, a competitive ongoing Investment Policy Review fiscal regime, and non-discrimination in access to (IPR) of Belarus are encouraging. The raw materials and industrial inputs. A comprehensive Reviewers believe the Government’s private sector development strategy, forged together reformsT are heading in the right direction to deliver a with business and academia, could set out a roadmap for more transparent, predictable and competitive business reaching agreed solutions on these and other issues. environment - indispensable for attracting high-quality Policy stability and coherence are also important investors. However, challenges remain. objectives. It is widely recognised that transparent and predictable legal environments play a crucial role in On the right track making an economy competitive. Since 2007, Belarus has SUPACHAI Belarus has a lot to offer investors: a sizeable internal introduced many policy initiatives, laws, decrees and edicts PANITCHPAKDI market, a privileged location between Russia and the as part of the reform process. The challenge will be to began his four-year term European Union, well developed transport infrastructure, ensure that these lead to better business conditions. This as Secretary-General of a highly skilled work force and a strong commitment to will require highly effective and targeted consultation, UNCTAD in September reform. Both domestic and foreign entrepreneurs agree coordination and implementation. Events such as 2005. He previously that the Government’s reforms of the past two years the Belarus Investment Forum address some of these served as Director-General have clearly reduced the regulatory and administrative challenges by communicating a better understanding of of the WTO. Dr Supachai burden on business. They cite the streamlining of the overall reform and development strategy. began his professional business regulation processes, abolishment of the ‘golden Attracting high-quality, competitive investors is one career at the Bank of share rule’, simplification of the tax system for small of the biggest challenges facing any country. It is also Thailand in 1974. He and medium enterprises, and new incentives schemes one of the most important strategies a government can was elected a member of to attract investment to the least developed areas of the activate. The right investors can bring new management the Thai Parliament and country. Moreover, the World Bank’s 2009 Doing Business techniques, technology, skills, markets and value- was appointed Deputy Report showed a marked improvement in the ‘ease of chain integration opportunities. They can test-market Minister of Finance in doing business’ in Belarus. Belarus goods and services, and help transform existing 1986. In 1992, he became competencies into competitive skills and products. Deputy Prime Minister. Tackling the challenges However, FDI, like trade, is not a magic potion for The Government’s commitment to reform will be an development. It exposes local producers to competitive important factor in delivering further improvements. pressures and may generate short-term shocks. The UNCTAD’s IPR has identified a number of areas Government has an important role to play in mitigating where determined and coordinated action will enhance these risks and maximising the beneficial impacts for the Belarus’s competitiveness and increase its attractiveness embryonic private sector. It can do so by accelerating as an investment location. reforms, fostering innovation, providing education and For example, weaning the economy off subsidised training to fill gaps in the skills base, and encouraging 1 The United Nations Conference energy by 2011 and exposing the mostly state-owned foreign investors to develop local sourcing networks. on Trade and Development (UNCTAD) is the main UN agency productive sector to international competition will be Government can also remove obstacles and distortions dealing with trade and development an important part of creating a competitive economy. that reduce competitiveness in terms of time, cost, issues. It serves 193 Member States This will go hand in hand with Belarus’s accession to the quality, value-added, etc. The policy review will present as a forum for intergovernmental WTO and harmonisation with the multilateral trading a number of suggestions in this regard. consensus-building on trade and system’s openness, transparency and non-discrimination development policy. It undertakes research, policy analysis and data principles and rules. Commitment, engagement and persistence collection, and facilitates debates Fostering a sustainable and dynamic private sector is Foreign direct investment can play a key role in enhancing among experts to identify good another key area for action. To date, the private sector competitiveness and encouraging private sector practices and policy advice. And it has played only a minor role in the economy, primarily in development. UNCTAD believes that with commitment, provides technical assistance to help the services sector. The Review has identified regulatory engagement and persistence, the Government can deliver countries implement international commitments, enabling policies and and administrative reforms that could assist business the right enabling environment and attract the right FDI good practices. development and productivity. These include fair pricing to help it achieve Belarus’s considerable potential. F 9

FIRST BELARUS

A multidirectional foreign policy

A PROFILE OF HE ALEXANDER LUKASHENKO PRESIDENT OF THE REPUBLIC OF BELARUS

Belarus has he Soviet Union may have collapsed almost economic mutual relations. We also want to take steps to two decades ago, but Europe and the United facilitate border crossing for individuals and to promote the potential States have, until recently, largely regarded interpersonal contacts,” said Mr Mingarelli. Belarus as operating within Russia’s sphere Alexander Lukashenko represents a new generation Tof influence. However, over the last year, the President of post-Soviet politicians. He belonged neither to to become of this most central of European nations, Alexander the Communist Party and never occupied any posts a base for Lukashenko, has been making significant moves towards in its hierarchy of power. He attended Mogilev State strengthening ties with the West. University in the 1970s and the Belorussian Agricultural foreign This growing rapprochement comes at a time when the Academy in the 1980s, and served in the Soviet Army. In EU is also eager to bolster ties with neighbours that share the late 1980s he managed a collective farm, and in 1990 investors a border with a newly resurgent Russia. “Belarus does not he was elected to the parliament. After the collapse of want dialogue with the West through the ‘iron curtain’ it the Soviet Union, President Lukashenko made a name seeking to has built on its border,” President Lukashenko told foreign for himself fighting corruption, and on 10th July 1994 correspondents ahead of September’s parliamentary polls. he was elected to his first term as president. enter the new “We want dialogue in all areas. We want you to accept us President Lukashenko says he would like to see the and to recognise our elections,” he said. West engage more with the former Soviet Union, citing and promising Lukashenko won the 2006 presidential elections with Washington and Brussels’ influence as one of the main 82 per cent of the vote. His ticket was simple: his economic reasons why former Soviet states like Belarus declined to markets of CIS record, based on a refusal to accept the economic ‘shock follow Russia in recognising Abkhazia and South Ossetia therapy’ that he says has impoverished Russia and much when they split from Georgia. countries of the rest of the former USSR for a decade. In the “If Europe makes one step forward in political and process, President Lukashenko has managed to preserve economic cooperation, we will make three steps,” the social safety net of the old system while at the same President Lukashenko recently told reporters. Security time maintaining steady economic growth, a winning cooperation would also be helpful. There are no plans combination that has earned President Lukashenko for Belarus to join NATO in the immediate future–even genuine popularity since first winning elections in 1994. though it is arguably more qualified for membership During his time in office he has steered the country than Georgia, given its recognised boundaries. Now, the through the confusion and financial crises of the upcoming Czech EU presidency is considering inviting 1990s, bringing stability and raising incomes to more President Lukashenko to an extraordinary EU summit than twice those of Soviet levels. The economy grew in the first half of 2009. This would involve Belarus 8.2 per cent last year and expansion is forecast to slow first becoming a member of the European Eastern only a little to 7.1 per cent this year, according to the Partnership, a joint Polish-Swedish plan to accelerate International Monetary Fund (IMF). Over the last year, EU integration with its post-Soviet neighbours, floated the European Commission has begun cooperation with before the Russia-Georgia conflict earlier this year. Belarus on a range of issues aimed at strengthening Located at the crossroads of the main rail and motor ties. On 5th November, the Deputy Director General routes, systems of oil, gas and product pipelines, of the European Commission’s Directorate General communications systems between Western Europe for External Relations, Hugues Mingarelli, met with and Russian regions as well as Asian countries, Belarus Belarus’ Deputy Prime Minister Andrei Kobyakov. has the potential to become a base for foreign investors “It will be our first step to resume full-fledged seeking to enter the new and promising markets of CIS relations with your country. Belarus is such an important countries. Belarus is a fast moving emerging ‘frontier’ neighbour for us that we are ready to do much more market with high levels of GDP growth, talented and to make it possible,” said Mr Mingarelli in the capital, well educated human capital and a highly encouraging Minsk. “We have serious political intentions to develop investment climate. Following the accession of Opposite: HE Alexander relations with your country so that Belarus can become a Ukraine to the WTO in May 2008, Belarus now Lukashenko, President of full-fledged participant of the European neighbourhood shares frontiers with three WTO members, and is 10 the Republic of Belarus policy, within which we can develop our trade and increasingly developing trade and investment links

FIRST with the international business community. ‘credit crisis’ than its neighbours in Eastern Europe. Privatisation Belarus is a part of a common customs area with Russia. As a result of the global financial crisis, it is talking For potential investors this means access not only to to the IMF about a possible US$2bn (£1.2bn, €1.5bn) is on the Belarus, but to Russian markets. The country is currently loan as a ‘security cushion’ in case of further turbulence. negotiating membership of World Trade Organisation, Belarus, which has a relatively underdeveloped financial agenda, with and enjoys good relations with multilateral financial sector, was not affected by the initial shock of the crisis, organisations like the IMF, the International Financial but it has been affected by turmoil in Russia, its main up to 100 per Corporation, and the European Bank of Reconstruction trading partner, and neighbouring Ukraine. According and Development. The country has kept state enterprises to the World Bank’s Doing Business 2009 report, Belarus cent stakes in place much longer than other former communist states, moved 30 positions up in the doing business rating and but President Lukashenko says privatisation is on the now occupies the 85th position among 181 countries. for sale agenda, with up to 100 per cent stakes for sale. That said, Its goal is to be one of the world’s thirty countries he warns the price must be ‘fair’. Greenfield investors are most attractive for doing business. This will involve also welcome. In September the country increased the improving the tax system and removing bureaucratic permitted foreign stake in local banks from 25 to 50 per barriers. At the same time, the National Investment cent. The government is planning to sell off four state- Agency will become a one-stop shop for investors. owned banks and other state-owned enterprises. President Lukashenko says that closer ties with Europe Vasily Matyushevsky, the deputy chairman of the have always been a key policy goal for central bank, said in October that the country was taking his government, pointing out steps to improve the business climate of the country to that the country is the ensure a continued inflow of foreign direct investment. geographic centre of Belarus attracted more than US$7 billion (bn) in foreign the continent. And as investments in 2008, compared to US$5.4 bn in 2007. its economy expands, The previous year it brought in almost US$4 bn. At Lukashenko says that present Russia is the largest investor, making up 33.2 per Belarus will continue cent of gross foreign investments in January-June 2008. to look outwards, Russia is followed by Switzerland with 20.2 per cent, the pursuing what the United Kingdom with 14.2 per cent, and Austria with president calls a 10.7 per cent. In early 2008 the number of joint ventures ‘multidirectional and foreign-owned companies exceeded 4,200, 10 per foreign policy’. F cent up on the previous year. The country enjoys stable inflation and exchange rates, and offers tax and customs advantages for foreign investors, a developed banking system, and a burgeoning financial and insurance services market. Measures introduced by the government to boost investment include setting up six Free Economic zones offering a range of tax and other incentives to investors. Belarus has become increasingly attractive for foreign investors thanks to its political and economic stability, rapid economic growth, and favourable geographical location. In addition, Belarus boasts a highly qualified workforce. The Belarusian Government is eager to attract further investment, but in the current financial climate, credit has become more difficult. However, Belarus has low levels of public and private debt, and has less exposure to the international

BELARUS

Liberalising trade and investment

BY ANDREI KOBYAKOV DEPUTY PRIME MINISTER, THE REPUBLIC OF BELARUS

n behalf of the Government of the Belarus has moved up from 115th to 85th place in the Republic of Belarus I very much welcome league table of 181 countries. this special FIRST report on Belarus. I would like to point out the major reforms which This important initiative is evidence we are undertaking: the abolition of the ‘golden ofO the growing mutual interest of Belarus and Europe share’, the transition to the principle of registering in developing extensive commercial and economic economic entities, granting substantial tax and customs cooperation in a variety of sectors. concessions to companies in rural areas and small towns, I wish to emphasise the positive approach to our granting micro credits at extremely advantageous international trade relations. Belarus has become rates, considerably simplifying the land acquisition considerably more attractive for international business procedures, establishing nil rate customs duties on ANDREI KOBYAKOV in recent years and we will build on this. imports of a wide range of technological equipment, graduated from the After overcoming the systemic crisis in the 1990s, increasing the tax advantages for residents in the free Moscow Aviation the economy of Belarus is recording high, stable rates economic zones and giving them guarantees that the law Institute in 1983, and of growth. From 2000-07 GDP grew by 170 per cent. governing this beneficial tax regime will not change. from the Belarusian State In the course of implementing the five-year social I would emphasise that these are only some of the Economic University and economic development plan for 2006-10, GDP measures that are designed to liberalise the Republic’s and the Institute of increased by 19 per cent in the first two years, and economy and its external trade and investment climate. Political Science and industrial production by 20.9 per cent, investments There are also plans to pass laws designed to accelerate Social Management of in fixed assets rose by 52.2 per cent, real earnings the privatisation process, develop the securities market, the Communist Party increased by over 35 per cent. improve the tax payment system and promote the sale of Belarus (CPB) in This year the upward economic growth trends are of state property. 1991. From 1983-95 continuing across the board with, the majority of major The facts and figures that I have provided on the Mr Kobyakov occupied social and economic growth parameters experiencing volumes of trade and investment not only confirm the various positions at the rapid rates of growth. importance of continuing our trade development and Vavlilov Mechanical Works The latest report Doing Business 2009 by the World economic relations, but are further evidence that the in Minsk. From 1996- Bank and the IMF places Belarus in the top ten leading potential of cooperation is by no means exhausted. 2000 Mr Kobyakov was reformist states in the area of legal regulation. As a I would like to conclude by thanking FIRST and the Deputy Chairman, result of its endeavours to simplify business legislation wishing the organisation every success. F then Chairman of the State Control Committee of the Republic of Belarus. In 2000 he was made First Deputy Prime Minister of the Republic of Belarus. Mr Kobyakov became Deputy Prime Minister of the Republic of Belarus in 2001.

Infrastructure investment includes the development of tourist facilities 13

FIRST BELARUS

A policy of mutual advantage

INTERVIEW WITH HE SERGEI N MARTYNOV MINISTER OF FOREIGN AFFAIRS, THE REPUBLIC OF BELARUS

What are the key aims, objectives and guiding strategic interest. We are heavily involved with the CIS, principles of the foreign policy of Belarus, given the EurAsEC and CSTO. The multilateral format brings growing importance of Eurasia to the global economy? maximum results in enhancing this co-operation. The overriding strategic objective pursued by the Another priority is to promote political and economic Republic of Belarus in the international arena is to relations with the countries of the Southern hemisphere. defend its national sovereignty, rights, freedoms and We have embarked on a system of efforts to shape a the legal interests of Belarusian citizens, public and state wider arc of Belarusian foreign policy. Its pivotal points interests. That is the natural ideological foundation are China, Venezuela, Cuba, South Africa, Iran, the Gulf underlying our foreign policy. countries, Vietnam and India. We also work to have To deliver on such wide-ranging objectives makes it meaningful cooperation with such countries as Japan, SERGEI N MARTYNOV necessary to manage such strategic interests as ensuring Malaysia, Indonesia and the Republic of Korea. Graduated from Moscow the safety of our country in the widest sense of the word An assessment of our foreign policy priorities would State Institute of – including military and political, economic, energy, not be complete without mention of our multilateral International Relations, transit, environmental; the shaping of favourable external diplomacy that is such an important tool of our foreign summa cum laude (1975). conditions to encourage steady economic development policy. We intend to continue pragmatic cooperation From 1975-80 he was and growth in people’s well-being; active involvement in with international organisations, the UN, OSCE, Non- at the Department of the international agenda based on the supremacy of the Aligned Movement, principally to defend and promote International Economic law, equal opportunities , rights and obligations of each our national and common interests. Organisations, Ministry of participant in the international process. Such are the Foreign Affairs. He held goals set for the Ministry of Foreign Affairs by Alexander Global security is a key issue for government and senior positions including Lukashenko, President of the Republic of Belarus. policy makers. What role can the UN and NATO play in maintaining stability? What part can the Deputy Permanent These give rise to our foreign, political and economic Commonwealth of Independent States and other Representative of the priorities that focus primarily on the neighbouring regional organisations play in this context? Republic of Belarus to the countries. Our closest ally and partner is the Russian United Nations, Charge Federation. Our interaction is stable and profound, The founding nations of the United Nations which d’Affaires to the USA evidenced by the strength and dynamism of our co- include Belarus, sought to create an efficient international becoming Ambassador to operation in trade and economic matters. Belarus structure to coordinate the efforts of the international the USA in 1993. Between continues to be one of the major trading partners of community in maintaining and upholding international 1997-2001 he was First the Russian Federation and the results of the first half peace and security. However, the efficiency of the UN, in Deputy Minister of of 2008 places Belarus in sixth place in foreign trade practice, has been far from being perfect. Clearly, quite Foreign Affairs becoming with Russia. Over the past seven months of this year, the a number of Security Council decisions are not fulfilled Head of Mission to the turnover between our countries grew by over 60 per cent and some economic and military powers seek to use the European Communities, compared to last year to reach an expected US$40 billion UN platform to their own advantage. Head of Mission to by the end of the year. As the world undergoes dramatic geopolitical the North Atlantic We are aware of the importance of the development transformations with new global challenges and threats Treaty Organisation of relations with the EU – a global stakeholder in today’s emerging, it has become even more important to reform and Ambassador to the system of international relations, with its significant all areas of UN activity. We are confident that fostering Kingdom of Belgium. market and massive technological and investment base. the UN’s role in maintaining stability and security will Since March 2003 he has For Belarus, the EU is our natural partner, especially require the international community to fulfil two things. been Minister of Foreign in terms of exports. There are a number of areas where Firstly, the Security Council members, particularly the Affairs of the Republic of we have mutual advantages in fostering co-operation permanent members, should understand and remember Belarus. between Belarus and the EU – energy, transport, visa that they are acting not only to pursue their own national regime simplification, illicit migration, human trafficking, interests but also on behalf of all UN member states. organised crime, and the environment. Belarus seeks to Secondly, the resolutions of the UN Security Council forge an efficient and practical dialogue with Brussels and should be respected and fulfilled by all countries. other European partners on these important issues. Belarus has always pursued a consistent and 14 The post-Soviet space remains an area of special responsible policy to develop its co-operation with

FIRST NATO, within the Euro-Atlantic Partnership science and research, and so on. I sincerely Council, with the aim of strengthening European Furthermore, efficient co-operation between us and international security and reducing the spread of will give real impetus to Europe’s role and profile in hope that weapons of mass destruction and conventional arms. international affairs. I am confident that the creation of It is beyond doubt that NATO will continue playing a an economic co-operation zone for the whole of Europe despite the significant role in ensuring international security. Belarus will be helpful both for Belarus and for the EU. The is ready to co-operate with the alliance here and in areas long-term interests of our nation lie strongly with the different advantageous both for our country and for NATO. formation of a safe, stable and consolidated Europe. It These might include minimising the consequences is also obvious that an independent, strong and thriving approaches of emergencies, man-made and natural calamities, Belarus is an important factor for stability in Europe. combating human, arms and drug trafficking and other Recently, Belarus and the EU have cautiously drawn in Belarus cross-border crimes. We are certain that joint efforts nearer. In April 2008, a European Commission office to combat todays challenges and threats enhances co- commenced operations in Minsk. We are actively co- and the EU operation between Belarus and NATO. It is a principle operating with the EU in energy, transport, environment that NATO military activities should not place our and customs. However, despite initial successes it is across many security and that of our partners in jeopardy. obvious that we are at the start of the path, politically. We advocate the development of a multipolar world, There should be political commitment and will, from political and this is where we have to look to the potential and both sides, not only Belarusian, to make further steps. I ever-growing authority of the Collective Security sincerely hope that despite the different approaches in issues, a great Treaty Organisation. Belarus and the EU across many political issues, a great The CSTO is part of a unified and indivisible system future lies ahead for our co-operation. future lies of security across the entire Euro-Atlantic space. Over a relatively short period, this organisation has already What is the current status of The Union of Russia ahead for our accumulated priceless experience in such areas as counter- and Belarus? terrorism, combating drug and human trafficking, and The status of the Union of Belarus and Russian is clearly co-operation mitigating the effects of emergencies. We think that the defined by the Treaty of Creation of the Union State of CSTO should be transformed into a multifaceted military 8 December 1999. The two states have the task to create and political organisation and is well-placed to become a a common economic area securing free movement of real force for good that can actively maintain international goods, services, capital, labour, and providing equal security. We believe that political dialogue and practical co- conditions and guarantees for economic entities, equal operation along the CSTO-NATO lines will undoubtedly rights for citizens in employment and payment of work, meet the interests of the entire international community. education, healthcare, and other social guarantees. During the years of integration, a legal basis covering How are Belarus’s relations with Europe developing? all spheres of life and enabling both states to realise the How important is Europe to Belarus as a diplomatic potential of cooperation has been developed. and trading partner? When talking about the status of the Union, it is Belarus is a European country and should not be split from important to underline that the Republic of Belarus Europe as we are an important part of it, geographically, stays committed to the idea of the creation of the Union historically and economically. I assume, when asking this State with all participating countries preserving their question, you meant to say the European Union, implying sovereignty and independence. We advocate the creation Europe, and I will answer therefore from this context. of the Union State on the principle of equality, and view The Belarusian relations with the EU are developing this principle as a basis for developing our relations. strongly, in trade and economy, in particular. Over the The union relations are built primarily on a business and past few years, the European Union has become a major rational approach to all aspects of cooperation. Because of importer of Belarusian commodities and is the largest this approach our union remains both the most developed consumer of our goods for the third year in a row. and the most enduring integration structure in the post- Between 2000 and 2007 the turnover between Belarus Soviet area. Much has been done, and is being done, in and the EU has soared eight-fold, Belarusian exports the areas of defence and security, law-enforcement, and to the EU countries increased fifteen-fold. This trend other areas of development in The Union. continued in 2008. The European Union is our neighbour with What role will Belarus play in ensuring Europe’s the longest shared border and, therefore, shared continuing prosperity and stability? How are understanding of the need to develop co-operation in relations with your neighbours developing? such areas as energy supplies, transport infrastructure, We are a predictable and responsible partner, a net illicit migration, environment, customs regulation, supplier of stability and security in the region, u 15

FIRST BELARUS – THE GATEWAY TO GREEN GOLD

Belarus has over 50,000 square kilometres contaminated by fallout from the Chernobyl disaster

Unusable for 22 years Until now

Greenfi eld has a triple-win solution

Backed by the Government of Belarus, our biorefi neries will use the continued harvesting of biomass for fuel to cleanse the soil of radioactive particles. Research indicates that the time taken to remove the radioactivity can be cut to decades, rather than the centuries nature alone will require.

The agricultural cycle of investment/cultivation/food cannot function in the affected regions. By substituting instead an industrial cycle of investment/cultivation/green fuels, our biorefi neries will provide carbon positive biofuels and a solution to the blight of Chernobyl.

• No competition with food crops • Green bioethanol, biodiesel, biogas and electricity • Agrofuels sector will be strongly carbon positive, cutting greenhouse gases signifi cantly • Petrol/ethanol blends will meet EU needs under its climate change directives • Economic development — a sector as large as 6% of Belarus’ GNP • And the Chernobyl lands decontaminated in decades rather than centuries

We are in partnership with the Government. We have the technologies. We have the institutional support. We have the scientifi c research backing.

Our fi rst project is under way. The possibilities are vast, with investment opportunities to match.

To learn more, visit www.greenfi eldpartners.eu Greenfi eld Chairwoman Anne McClain (standing, centre) and Prime Minister Sergei Sidorskiy watch as Deputy Prime Minister Ivan Bambiza (right) and Greenfi eld CEO Michael Rietveld sign the Framework Agreement between the Greenfi eld: Let’s make the world a greener place Belarus government and the Irish company in December 2007. On Ms McClain’s right is Andrei Aleinikov, Head of the Greenfi eld Representative Offi ce in Minsk BELARUS

t a guarantor of uninterrupted transit of energy and Kazakhstan are leaders in the formation of a customs I am confident resources. Our contribution to nuclear and conventional union within the EurAsEC. We expect other EurAsEC disarmament in Europe is well-known and indisputable. member states will join the customs union, as soon as it that Belarus Belarus is a responsible European partner in fighting has been formed. international terrorism, trans-national crime, drug Secondly, we should facilitate the development and will not turn trafficking and the slave trade. These are not just empty implementation of priority interstate special-purpose words. They are backed by concrete deeds and examples programmes within the area of EurAsEC member states into a ‘buffer’ of cooperation. focused on microelectronics, innovation biotechnologies, This country has no territorial disputes with its and healthcare, based on the initiatives which were put zone between neighbours. This is our deliberate choice, despite the forward during Belarus’ chairmanship of the EurAsEC. difficult and centuries-old history and in contrast to Thirdly, we believe it is necessary to engage the the two poles a multitude of contrary examples in the former USSR Eurasian bank of development in funding a number of area. Given the conditions of our interconnected world, integration programmes and projects. of power, but the EU cannot disregard the interaction with Belarus in such areas as the development of transport infrastructure, How would you define Belarus’ role in the world in will become a protection of the environment, customs regulation, the coming decade? scientific and technical cooperation, and many others. Belarus is located in the middle of Europe, and there will strong bridge And the final, but no less important point. Belarus is be no complete Europe without this country. Belarus a country with a successfully developing economy and is not isolated. In the era of globalisation, the process between the a steadily improving standard of living of its population, going on outside this country cannot fail to affect us. hence it is beneficial for the EU to have such a neighbour. That is why the mid-term perspectives of Belarus will be West and It is impossible to imagine a stable and prosperous defined, to a large extent, by externalities, global trends Europe without friendly and mutually beneficial relations and regional development. the East between European neighbouring states. Belarus is not Today, we have firm foundations. We mobilised our an exception. None of Belarus’ neighbours – Lithuania, economic, technological and labour resources in time. Year Latvia, Poland, Russia, Ukraine – is alien to us. We have after year, we have consistently moved along the path to enormous experience of co-existence and cooperation. strengthen our independence, economic modernisation, All these states host large Belarusian diasporas, and ethnic and improve the wellbeing of our people. So I have Russians, Latvians, Lithuanians, Poles, Ukrainians are law grounds to believe that in the coming five to ten years abiding and respected citizens of Belarus. Belarus will complete its development as a strong state Economics, politics, culture, science, sports, and, with a vigorous innovative economy, modern production primarily, human contacts and relations between our and a high level of social protection for its citizens, which citizens make a firm basis for the development of Belarus’ will enjoy respect on the international stage. bilateral cooperation with the neighbouring countries. Belarus has all it needs to establish a proper role in world politics and economics in the 21st century. How important is regional integration to Eurasian Our unique geopolitical location in the middle of development? What mechanisms are helping to the continent, at the junction of the Eastern and the reinforce the objectives of a Eurasian market, such as Western economies and cultures; our transit role in the the Eurasian Economic Community? supply of energy resources (today, over 30 per cent of gas Regional integration is one of the key issues in the and more than 40 per cent of crude oil exported from development of the Eurasian area. Despite the differences, the Russian Federation to the European Union flows the state parties support the integration process and through Belarus) gives us an important role. Our status underline that with concrete actions. In particular, a as the largest corridor between Asia and Europe is also customs union and a common economic area are being important. I am confident that Belarus will not turn into formed within the EurAsEC, a solid legal basis has, a ‘buffer’ zone between the two poles of power, but will therefore, already been created. become a strong bridge between the West and the East. The following mechanisms are vital for achieving the Today, we have the best Internet access levels in the CIS, objectives of Eurasian regional organisations. and our infant mortality rate is at the level of the leading Firstly, it is important to create a valuable customs European states. union within the EurAsEC, including the formation Belarus has no global geopolitical ambitions, and is of a free trade regime, creation of a common customs unlikely to have any by the year 2018. We maintain a tariff and a common system of measures of non-tariff sober assessment of both our needs and strengths. But we regulation with regard to third countries, creation have our national interests, primarily trade and economic of a common customs area and the development of a ones, and our scope is expanding. And we will continue to common economic area. Belarus, the Russian Federation uphold these interests. F 17

FIRST THE REPUBLIC OF BELARUS

The following companies have assisted in the production of this report:

JSC Grodno - Azot

JSC Belagroprombank

JSC Belpromstroibank

RUE BelAeroNavigatsia

Traiple Ltd

PRUE Belcommunmash

PA BelavtoMAZ

PA Belarusian Metal Works (BMZ)

Administration of the Free Economic Zone “Vitebsk”

Administration of the Free Economic Zone “Gomel-Raton”

JSC Priorbank

JLLC Mobile TeleSystems (MTS)

JV CJSC Milavitsa

Fransabank

Decorum

Neman Glassware BELARUS

The bison and the lion

BY HE ALEKSANDR MIKHNEVICH AMBASSADOR OF THE REPUBLIC OF BELARUS TO THE COURT OF ST JAMES’S

espite the fact that our planet is inhabited the levels of rapid decision making. Taking this into by more than 6.7 billion people, state- consideration, the foreign-economic policy of Belarus of-the-art technology makes the Earth has become more aggressive in the positive meaning of increasingly small. It now takes less than that word. The representative office of the Belarusian threeD hours to travel from London to Minsk and I am Oil Company is about to open in London and London delighted that British and Belarusian businessmen are representations of Belarusian banks such as ‘Belarusbank’ taking advantage of this fact! and ‘Belpromstroybank’ are also due to open. Belarus – UK trade relations are growing steadily. “How is it that Belarus is 40 per cent covered with Over the past five years bilateral trade has increased by forests, and we hardly see any Belarusian furniture or more than threefold: from £500 million in 2002 to more other wood products in the British Isles!”, Prince Charles ALEKSANDR than £1.7 billion in 2007. This is a significant figure and noted in conversation with me at a reception. This MIKHNEVICH is backed up by hundreds of contacts and contracts. advice has been taken on board: Belarusian woodwork is the Ambassador of the In trade volume the UK occupies 6th place among is finding its way into the British market. We also export Republic of Belarus to our trading partners after Russia, the Netherlands, the Belarusian food stuffs (one of the most ecologically pure the Court of St James’s. Ukraine, Germany and Poland. In export volume the in Europe) and this is about to enter the UK market. He is a physicist by UK takes 3rd place after Russia and the Netherlands. There is a long list of other such initiatives. training as well as an Our main exports to the UK include oil products, Scientific and high-tech cooperation deserves a economist, specialising metal products, tyres, textiles, optics, timber including special mention. As an example, Belarusian and French in foreign economic furniture and tractors to name but a few. We purchase research institutions cooperate efficiently within the relations. A champion the UK Cummins engines for our machine-building framework of a bilateral programme. Why not launch of international industry, as well as automobiles, pharmaceutical and a similar project in the British Isles? Especially in areas trade he has been cosmetic products, computers and much more. such as programming, nanotechnology, bio and genetic instrumental in The United Kingdom is one of the key investors in engineering where Belarus has particular expertise. expanding international the Belarusian economy with more than 100 British- Belarusian business is ready to learn about the latest trade and investment owned enterprises active in Belarus including modern trends; issuing IPOs, exchange transactions, investment with Belarus. Exports to industrial manufacturers. This is of special importance funds, infrastructure for business – all those aspects the EU have increased and we hope to see considerable further investment in of modern economic development. We are diligent dramatically and some key sectors such as manufacturing, industry, energy, students and also have our own know-how to impart. 3,000 foreign investors high-technology and infrastructure. It is also important to establish cooperation at all have located in Belarus. London is considered to be one of the foremost levels. I am delighted, for example, to welcome the financial and business capitals of the world. It is a first steps taken by the British-Belarusian Chamber of very interesting and challenging place to work given Commerce. Despite the fact that the activities of the Belarusian Council on Economic Cooperation were frozen some eight years ago, might we not bring this Council back to life? Quite recently under the initiative of European and Belarusian businessmen, the Belarus-EU Business Council (BEUBC) has been formed and British companies play an active role. These institutions are vital to our cooperation in trade and investment matters. It is probably well-known to the readers of FIRST that Belarus is the native habitat of the European bison, called ‘zubr’. This sturdy and proud animal is one of the symbols of my country. Being very powerful the bison remains very friendly. I am sure The Belarus the Belarusian Bison could make excellent neighbours bison, ‘zubr’, a with the British Lion. So British business is most symbol of Belarus welcome in Belarus! F 19

FIRST Winner, 2000 Winner, Winner, 2001 Winner, Lord Browne, Group Chief Marilyn Carlson Nelson, Chair & Executive, BP CEO, Carlson Companies Winner, 2002 Winner, Winner, 2003 Winner,

Sir Robert Wilson, KCMG, Dr Daniel Vasella, Chairman and Chairman, British Gas CEO, Novartis AG Winner, 2004 Winner, Winner, 2005 Winner,

2000 WINNER Lord Browne of Madingley, Group Chief Executive, BP presented by Rt Hon Gordon Brown MP, Chancellor of the Exchequer

2001 WINNER Morris Tabaksblat KBE, Alan Wood, Chief Executive, Marilyn Carlson Nelson, Chair and CEO, Carlson Companies Chairman, Reed Elsevier Siemens Plc presented by Rt Hon Jack Straw MP, Secretary of State for Foreign and Commonwealth Affairs 2002 WINNER Sir Robert Wilson KCMG, Executive Chairman, Rio Tinto presented by Rt Hon Patricia Hewitt MP, Secretary of State for Trade and Industry Winner, 2006 Winner, Winner, 2007 Winner, 2003 WINNER Dr Daniel Vasella, Chairman and CEO, Novartis, AG presented by Most Rev and Rt Hon Dr Rowan Williams, Archbishop of Canterbury 2004 WINNERS Morris Tabaksblat KBE, Chairman, Reed Elsevier Howard Schultz, Chairman, presented by Rt Hon Lord Woolf, Lord Chief Justice of England & Wales Ratan Tata, Chairman, Tata Sons Starbucks Coffee Company Jaime Zobel de Ayala, Chairman, Ayala Group presented by Rt Hon Lord Howe of Aberavon CH QC IRST Magazine instituted the Award for Responsible Capitalism to mark 2005 WINNER the Millennium. The panel of judges is chaired by Lord Woolf of Barnes Alan Wood CBE, UK Chief Executive, Siemens and includes Lord Dahrendorf KBE, Rt Hon Lord Howe of Aberavon CH QC, presented by General Sir Mike Jackson GCB CBE DSO ADC Gen, F Chief of the General Staff Hon Philip Lader, Lord Plant of Highfield, Chief Emeka Anyaoku GCVO TC CFR, Lord Marshall of Knightsbridge and Sir Patrick Cormack FSA MP. Previous winners, 2006 WINNER Marilyn Carlson Nelson, Sir Robert Wilson KCMG, Dr Daniel Vasella, Morris Ratan N Tata, Chairman, Tata Group presented by HRH The Princess Royal Tabaksblat KBE, Ratan Tata, Howard Schultz and Thomas Bata have all joined the judging panel. In making the Award, the judges are looking for a business leader 2007 WINNERS who has demonstrated social responsibility as an integral part of commercial Howard Schultz, Chairman, Starbucks Coffee Company Lifetime Achievement Award: success; someone who has run a company in a clearly responsible way. What has Thomas Bata, Chairman, Bata Shoe Foundation commended the recipients to the Judges was their concern for the environment presented by Rt Hon Alistair Darling MP, Chancellor of the Exchequer and for the local communities in which their companies are active.

For further information on the 2008 Award please contact Rupert Goodman on: +44 (0)20 7389 9640 or email: [email protected] BELARUS

Maximising economic resources

INTERVIEW WITH NIKOLAI ZAICHENKO MINISTER OF ECONOMY OF THE REPUBLIC OF BELARUS

What are the main aims and objectives of attract foreign investment and to develop the export economic policy in the Republic of Belarus? potential of the Republic of Belarus. Any country, in its economic policy, seeks to achieve The results of these measures include, simplifying certain strategic goals. To develop a socially oriented the process of property registration, using unused innovative economy, we pursue an economic policy, government property, improving accounting procedures, which takes into consideration our traditions and the providing special licenses for certain activities improving experience of economic models in other countries. customs clearance procedures and modifying the rules of On social issues, it means that the state provides the foreign trade regulation. The burden of bureaucracy has right conditions for the growth of salaries and wages, and also been reduced. maximises employment. We avoid wide gaps between In the Doing Business 2009 joint analysis, carried out NIKOLAI ZAICHENKO rich and poor: currently, the ratio between the incomes by the World Bank and the International Financial was born in 1948 in of the 10 per cent of the most highly-paid and the most Corporation (IFC), it was noted that Belarus had Pogranichny settlement low-paid is about 5.5. To provide the prerequisites became one of the leaders in the area of legal reform, of Primorski krai. In for salary and wage growth, we pursue a policy which especially reform intended to simplify the environment 1971 he graduated promotes incomes and improves productivity. for entrepreneurial activity. from the Belarusian The prime objective of our economic policy is a Polytechnical Institute system of measures intended to provide sustained Belarus wishes to attract direct foreign with a qualification as economic growth with financial and social stability. With investment. What special measures can increase an engineer economist. this in mind we have implemented tax reform, including this investment inflow? He is a candidate of simplifying the regime and reducing the tax burden. We have seen a significant increase in foreign investment: Economic Sciences. A high level of welfare expenditure requires significant about US$300 million (mn) in 2002, US$750 mn in From 1997 he was the financial resources from the budget. However, in 2006, and US$1313.5 mn in 2007. However, we consider first Deputy Minister of developing a new budget policy, we are gradually that the total amount of direct foreign investment is Economy of the Republic implementing a more rational pricing and tariff policy still too low. of Belarus. In 2003 in housing and social services. In the first six months of 2008, the inflow of he was appointed the investment was US$1,232 mn, that is, 36.9 per cent of Minister of Economy How important is the role of the private sector the total amount of foreign investment (compared to of the Republic of for the future economic growth in Belarus? How 22 per cent in the same period of 2007). Belarus. He was awarded important is the small business sector? How is Of course, these amendments to the Belarusian the development of small enterprises promoted? the medal ‘For Labour legislation, which regulate entrepreneurial activity, Achievements’. The Belarusian model of a socially-oriented market will encourage growth in direct foreign investments. economy depends on entrepreneurial activity as an Recently, more than 30 legal acts were passed, intended integral component. to improve the investment climate. As a result, The development of the Belarusian economy has Belarus has risen from 115th to 85th position in the been dynamic, to a large extent, as a result of the business conditions rating, amongst 181 countries entrepreneurial sector. Today, the contribution of (see the World Bank and the International Financial added-value in the GDP, provided by the private sector Corporation Doing Business 2009 report). is about 60 per cent, that means that the rate of reforms In addition special areas with preferential conditions in the Belarusian economy remains positive. have been established. These territories include free The development of the small business sector is also economic zones, the High Technology Park (Minsk) and dynamic. By the end of 2010, the share of the small and any settlement with populations of up to 50,000 people. medium sized corporate sector to GNP will be at least 30 Today, Belarus is interested in the development of its per cent, and a quarter of the total number of employees regions. Therefore, foreign investors, ready to establish in the economy now works in this sector. new manufacturing plants in areas with small and In 2007-08, measures were implemented to improve medium-sized populations, are exempt from entrance business conditions, provide incentives to promote customs duties and VAT for manufacturing equipment, entrepreneurial activity in the real sector of economy, components and spare parts. There are also other u 21

FIRST BELARUS

The economy t benefits for these territories including exemption from including for the expansion of functionality and profit tax for five years from the day of establishment, for increasing the number of users of EV-DO services (this of the manufactured products. technology has important advantages in comparison Government support is provided for the residents with GSM operators in high-speed wireless data Republic of of the High Technology Park including exemptions transmission services) and expanding telecoms coverage from profit taxes, VAT, entrance customs duties, real in the Republic of Belarus. Belarus has, estate tax, offshore duty, and from taxes, duties and other compulsory payments associated with the state During the past few years, the Republic of Belarus for a number budget. A number of similar benefits, are provided for has achieved significant growth in GDP, reaching 7 the residents of the free economic zones. per cent in 2007. How do you plan to maintain this of years, level of growth? What are the opportunities for investment in The economy of the Republic of Belarus has, for a demonstrated infrastructure projects (airports, bridges, roads number of years, achieved high rates of economic and telecommunication facilities)? What are growth. For example, during the period from 2000 to the terms and conditions for foreign companies 2007, GDP growth was 1.8 times; in 2007, the growth high rates participating in these projects? was not 7, but 8.2 per cent. In 2008, the GDP growth of economic Currently, the building of airports, roads, bridges, will be at least 10 per cent; for 2009, the forecast is flyovers and tunnels is financed mostly by the state. about 10-12 per cent. growth However, the Republic of Belarus is interested in To achieve such rates, various economic reforms have any proposals for investment in innovative projects been implemented. These include improved international including developing transport infrastructure, integration, investment growth and increasing domestic highways, waterways, airports, railroad electrification, demand. All these areas are supported by the state. power- and resource-saving, traffic control systems and In 2005, we initiated the strategic state programme traffic safety improvement. We are also interested in for the revival and development of the rural areas. This investment that reduces the share of motor transport by programme provides investment in manufacturing and the development of rail, water and electric transport, the social services, for six years, totalling US$30 billion. development of multi-modal transportation, recycling For the Republic of Belarus, with its population of resources, renovating water treatment facilities and around 10 million, this is a significant amount. At a initiatives to reduce atmospheric emissions. time, when the world is affected by food shortages, we To attract private capital for building and reconstructing have a food surplus. motorway service facilities, a number of tax benefits Domestic demand for goods and services is are provided to investors: the cost of motorway service supported by the policy of increasing the real income facilities is not liable for real estate tax for the first two of the population and optimising pricing levels. years; the profit from these facilities is not liable for tax These investments and innovations are, responsible for five years from the date of commissioning and it for these high rates of economic growth. From 2003, is recommended that local administrations halve land the annual growth of investment in the basic capital of tax rates and rent for land plots. Building and (or) the the Republic of Belarus has been more than 120 per reconstruction of motorway service facilities are not cent. We hope that the Investment Forum in London subject to recovery payments for the loss of agricultural will encourage further inflows of investment. and (or) forestry production, resulting from withdrawal of this land. What has been the progress in foreign trade As for investment in telecommunications, it should liberalisation and what is the relationship with be noted that four cellular communication operators, the World Trade Organisation (WTO)? which are foreign owned (from 49 to 100 per cent), are Overall, the harmonisation of legislation in accordance now doing business in the Republic of Belarus. Three with WTO rules is now complete in Belarus. of them, the Velcom Foreign Enterprise, the MTS To harmonise Belarusian legislation in accordance Joint Limited Liability Company and the BeST Closed with WTO requirements, more than 20 laws, edicts Joint-stock Company have demonstrated sustainable and decrees of the President have been passed, including development and enjoy stable finances. basic laws in the areas of foreign trade regulation, The fourth cellular communication operator, the technical standardisation, establishing the conformity, BelSel JV Joint-stock Company, established by the quality and safety of food and food-stuffs which promote Beltelecom Republican Unitary Enterprise of the human health and life. Republic of Belarus, and the CommStruct International The standard of intellectual property protection in Byelorussia BV (CIBBV), from the Netherlands, needs Belarus is now better than in many WTO member 22 additional external financing for investment projects, countries. In all, Belarus has submitted about 400 legal

FIRST acts for expert examination by the WTO. A fixed list of payable taxes and duties is guaranteed The primary Belarus has also completed negotiations with ten for the FEZ residents for a period of seven years. WTO member countries (Moldova, China, Cuba, constraint Armenia, Turkey, Kyrgyzstan, Bulgaria, India, Panama What is your view of the potential for further and the Dominican Republic). Negotiations with three economic development and expansion in the on progress other countries (South Korea, Brazil, Malaysia) are Republic of Belarus over the next decade? now in the final stages. The primary challenge for the next decade is to towards WTO To complete the bilateral negotiations, our achieve a breakthrough in development and to achieve discussions with eight further countries (Australia, EU, European growth levels. The introduction of new membership Canada, Chinese Taipei, Norway, USA, Switzerland technologies will enhance business culture, education, and Japan) all of whom have expressed their interest sport and other social areas. is the position in negotiations with the Republic of Belarus, are still The framework of this new modern infrastructure to be carried out. development will comprise the industrial parks, of the USA Throughout the negotiation process, the position business incubators and technology transfer centres. of the Republic of Belarus, with respect to joining For this purpose, an increased integration between and EU the WTO, remains clear: the conditions of Belarus science, industry and financial organisations will membership of the WTO must promote economic be required, that will take the form of technological development, support our export potential and ensure clusters of financial industrial groups. that Belarusian goods and services are more competitive These innovative developments will make it possible in the international market. to adapt our economy to world market prices for energy The primary constraint on progress towards resources. This will be a challenge over the next few WTO membership is the position of the USA and years, and this, perhaps, will be the most complicated EU, blocking the negotiation process for politically aspect of these transformations. motivated reasons or setting conditions which are so In the area of economic structural change, the The development of severe that they are unacceptable to Belarus. contribution of the service sector will grow significantly. a socially orientated However, in spite of these constraints, Belarus Special attention will be paid to the development of economy includes considers WTO membership as a top priority in its transport, that will make it possible to take greater the provision of foreign economic policy. We believe that, sooner advantage of the transit potential of Belarus. F sanatorium facilities or later, the Republic of Belarus will become a full member of this organisation.

Please describe the benefits and opportunities of the economic free zones. To expand our export potential and to promote the development of the regions, six free economic zones (FEZ) have been established in Belarus: Brest (1996), Gomel-Raton (1998), Minsk (1998), Vitebsk (1999), Mogilyov (2002), Grodnoinvest (2002). Now, 269 foreign companies (from Germany, Great Britain, Russia, Poland, etc) are registered in the free economic zones. The legal entities and the individual entrepreneurs are registered as FEZ residents by the FEZ administrators. The most significant benefits of the economic free zones are as follows: • FEZ residents’ profit, obtained from selling products (works, services), is exempt from profit tax for five years from the day of its declaration; • after five years, FEZ residents will pay profit tax at a rate reduced by 50 per cent from the established rate and not more than 12 per cent; • FEZ residents are exempted from entrance customs duties and VAT for goods, imported for their own manufacturing, subject to their finished products being exported. 23

FIRST BELARUS

Financial and social stability

INTERVIEW WITH ANDREI KHARKOVETS MINISTER OF FINANCE, THE REPUBLIC OF BELARUS

What do you consider to be the main objectives of policies under a number of integration agreements that financial policy (fiscal and monetary) in Belarus? Belarus is party to. Belarus’ chief fiscal policy objectives are to ensure financial and social stability and a macro-economic environment What are the key challenges in establishing high necessary to promote an efficient and competitive and sustained economic growth rates in Eurasia and economy. Another essential goal is to improve overall how are you stimulating domestic economic growth in Belarus? living standards for Belarusians. In the long run, our taxation policies will aim to foster Eurasian economies are currently characterised by sustainable economic growth, building up the framework unsustainable development patterns, susceptibility for investment and innovation and increasing labour to global crises, energy difficulties, and increasing ANDREI MIKHAILOVICH productivity while honouring our fiscal commitments. inflation. In its endeavour to maintain positive trends KHARKOVETS Belarus’ system of taxes and duties differs very little from in economic expansion, Belarus focuses on enhancing was born in Minsk, foreign levy systems. We charge direct and indirect taxes, the investment environment through improvement to Belarus, on September property taxes, natural resource taxes and social taxes. the legal framework, tax concessions for new companies 16, 1963. A graduate of The key objective of our fiscal policy is to improve and the free economic zones. The government facilitates the finance and credit the efficiency of budget spending by implementing borrowing by providing guarantees and placing available faculty of Belarusian a management-by-objectives budgeting strategy resources with commercial banks. State University of and introducing medium-term financial budgeting. I also believe production and the export of services Economics and the As a result, the key preconditions for improving the should be a top priority. Services, which make up around Presidential Management quality of public services and further increasing labour 70 per cent of the gross domestic product (GDP) in most Academy (he majored productivity in the public sector will be created. Belarus of the developed countries across the globe, remain an in national economic will prioritise the social aspects of the state budget in the untapped resource in Belarus. administration). He has longer term. Expenditures to meet state social standards worked in the Finance will be an essential part of the budget, thus ensuring fair To what extent has macro-economic stability and Ministry of the Republic compensation, pensions, educational scholarships, social development been achieved in Belarus? Please of Belarus and since then allowances and other social payments. outline the latest trends in GDP growth, inflation and real interest rates over the past three years. moved from the position When it comes to intergovernmental financing, we of senior economist, local focus on the social and economic development of the Belarus’ major macro-economic indices reveal steady economies financing regions, emphasising their financial autonomy and growth – despite the serious energy price hikes in recent office, up to Minister of underlining the responsibility of local government months, the economic situation has remained stable. Finance of the Republic institutions to ensure efficient budget spending. Economic expansion is impressive, with January-August of Belarus. The taxation system of the Republic of Belarus is similar 2008 GDP growth recorded at 10.6 per cent more than to those in European countries and the Commonwealth the same period in the previous year, which compares to of Independent States (CIS) as far as the range of levels 8.2 per cent annual GDP growth in 2007 and 10 per cent of taxation are concerned. Traditionally, the main sources growth in 2006. of tax revenue in Belarus are the profit tax and income Inflationary pressure has, however, also grown stronger. tax collected from corporate entities and individuals, The annual average consumer price index increased 7 per value-added tax (VAT), excise taxes, property tax, land cent year-on-year in 2006, 8.4 per cent in 2007, and 8.3 tax, and customs payments. Belarus’ method of budget per cent in January-August 2008 (from December 2007). revenue distribution via the Treasury system was ranked The rise in inflation is for the most part attributed to among the most effective in the former Soviet Union by natural gas price increases in 2007, when Russian fees for the International Monetary Fund (IMF) and is seen as a Belarus more than doubled, causing cost increases and model for the Russian Federation. higher manufacturing prices. Belarus’ customs regulations, especially the customs The rising energy prices also led to a drop in return tariff and payment procedures, fully comply with World on sales (to 12 per cent in 2007 from 13.6 per cent in Trade Organisation (WTO) standards and fulfil the 2006) and affected competitiveness. However, the figure 24 country’s commitments on customs and tax harmonisation soared to 15.8 per cent in the first seven months of 2008;

FIRST a clear indication that the measures launched by the the tax burden on the payroll bill and the convergence Belarus is government enabled the national economy to adapt to of bookkeeping and fiscal accounting rules, the adoption the new energy price levels. of International Accounting Standards (IAS). I hope this interested in package of measures will enable us to optimise the tax What are the key challenges in ensuring continuous collection system. both foreign and sustained economic growth in Belarus? Being an open economy, the Republic of Belarus is Much of the Belarusian economy remains State and domestic sensitive to external economic factors, including raw controlled – what effect does this have on economic material prices, higher inflation rates, financial crises efficiency? What is the policy on privatisation? investment and others. The situation is exacerbated by the lack of Ongoing privatisation is under the control of the fuel and energy resources. government, which is a logical way to reduce risks and inflows In these circumstances, it is important that the country’s ensure that new owners meet all the investment and fiscal policy ensures that the budget deficit and national social commitments. debt are maintained at sensible levels while supporting Since 1991, Belarus has reformed 4,129 state property sustainable economic growth. Back in 2006, Belarus units, or about 41 per cent of the total number of enterprises. achieved a budget surplus of 1.4 per cent of GDP; a year The country has made considerable progress in the retail later, a surplus of 0.4 per cent of GDP. Belarus’ national sector, public catering, and consumer services, with over 70 debt amounted to 8.8 per cent of GDP in 2006, with per cent of all enterprises successfully transformed. The list foreign and internal debts standing at 2.3 per cent of GDP of reformed enterprises includes over 200 large businesses and 6.5 per cent of GDP, respectively. The national debt each with more than 1,000 personnel, some of them being increased to 11.6 per cent of GDP in 2007, with foreign of strategic importance to the country. and internal debts as high as 5.2 per cent of GDP and Once major changes were introduced to the 6.4 per cent of GDP. The target for the state budget is a denationalisation regulations in April 2008, a new phase deficit of 3 per cent of GDP and for the state debt is 40 of privatisation started with even greater vigour. The per cent of GDP, or 20 per cent of GDP for the internal Belarusian government adopted a programme of privatising and foreign debt respectively. state assets for 2008-2010, which envisages the privatisation of 519 unitary enterprises and the sale of state controlled How do you assess the relative importance of foreign shareholdings in 147 open joint-stock companies. Another direct investment versus domestic investment with 500 state-run communal enterprises are expected to change regard to Belarus’s economic stability? their ownership structure in this period. Belarus is interested in both foreign and domestic Privatisation remains an efficient way to attract private investment inflows. The Investment Code offers foreign investment in enterprises currently controlled by the state. investors and corporate entities, established with foreign I also believe Belarus’ legislation is, in effect, quite liberal capital, the same legal treatment as Belarusian companies in investment matters. To promote foreign investment and individuals, and equal commercial opportunities. inflows, the President and the Government of Belarus Businesses with foreign investments are subject to the tax have passed a number of regulatory acts to phase out the laws of the Republic of Belarus, including tax abatements. A moratorium on the sale of shares acquired by citizens clear example is the exemption of all companies, whether or during preferential privatisation. Also in 2008, the state not with foreign investment, from all basic taxes and duties waived its pre-emptive right to acquire shares in corporate within five years of their inception, provided they are entities that enjoy state support and abolished the ‘golden located in communities with less than 50,000 inhabitants. share’ rule, a blocking minority ownership of the state. Importantly, Belarus’ laws impose no bans or restrictions on foreign investors’ gaining tax remissions and investors What is your vision for Belarus’s economic are not liable to additional commitments. development over the next decade? With socially oriented budgetary policies implemented How effective is the tax collection system and in the medium and long run, the state will aim to further what challenges lie ahead in this area? increase living standards and improve the quality of life, Belarus’ tax administration system ensures a very establish high levels of social security, education, culture, high level of tax compliance. Proper tax receipts are and healthcare standards, pension benefits and provide encouraged by special taxation departments and these support for lower-income households. measures also minimise tax evasion. Budget policy is among the most efficient instruments to We make every effort to simplify the taxation system regulate socioeconomic progress in the country, therefore in order to balance the interests of the state budget and budget funds will only be used to improve living standards taxpayers. The government’s tax action plan includes the for all population groups by strengthening social security abolition of taxes imposed on revenues, the reduction of and by adopting the necessary economic reforms. F 25

FIRST ch a4 ad:Layout 1 17/3/08 09:58 Page 1

When a meeting, or part thereof, is held under the CHATHAM HOUSE RULE participants are free to use the information received, but

neither the identity nor the : Luca Galuzzi - www.guluzzi.it, 10 Downing Street, : HM Treasury, UN/DPI, Fabian Society, PA Photos. affiliation of the speaker(s), SECOND ROW LEFT TO RIGHT

nor that of any other FOURTH ROW LEFT TO RIGHT participant, may be revealed : US Federal Government, UN/DPI, US Federal Government, US Federal Government; : public domain under Indian copyright act 1957, J Russell & Sons, US Federal Government, US Federal Government; THIRD ROW LEFT TO RIGHT OP ROW LEFT TO RIGHT PHOTOS COURTESY OF: t Government of the Kingdom of Jordan; ANC;

For over eighty years, Chatham House members have known what world leaders are really thinking.

Isn’t it time you joined us?

www.chathamhouse.org.uk BELARUS

Creating conditions for growth

INTERVIEW WITH ANATOLIY RUSETSKIY MINISTER OF INDUSTRY OF THE REPUBLIC OF BELARUS

What are the main responsibilities, functions and In many countries our automotive products including objectives of the Ministry of Industry? ‘MAZ’ trucks, ‘BelAz’ quarry dump-trucks and ‘Belarus’ The Ministry of Industry is the state body of the tractors are highly regarded. The export of products Republic of Belarus which coordinates the activities from ‘Gomselmash’ and ‘Amcodor’ are also increasing of more than 300 organisations in machine-building, at a rapid rate. Metal cord and other products from the metallurgy, radio electronics, electro-technical, optical- Belarus metallurgical factory are manufactured to the mechanical and a range of other industrial fields. strictest quality criteria and are doing well. The main functions of the ministry are as follows: The Ministry of Industry has developed a strategic • establishing favourable conditions for the effective plan for the development of exports which is regularly operation of these companies with the aim of developing updated. It establishes the main goals, tasks and ANATOLIY RUSETSKIY their export potential, fulfilling the requirements of the objectives of export development, including analysis graduated in 1973 from national economy and satisfying domestic demand in by country and region. Belarusian Polytechnic goods and services; With the aim of diversifying exports, the ministry has Institute and obtained • developing and implementing innovative investment taken measures to preserve traditional markets in the the qualification of programmes designed to advance the scientific- Russian Federation and other states of CIS, as well as ‘mechanical engineer’. technical base, modernise and develop production accessing others. We aim to increase competitiveness, Following a number of facilities and increase the competitive nature and increase the sales and marketing efforts, introduce important posts he has sustainability of the products. modern systems and develop an effective service become. From 1997-2002 The Ministry of Industry carries out other functions network. Our enterprises enjoy a distribution network was the deputy minister in accordance with legislation. comprising more than 1,000 dealerships, 23 assembly and then the first deputy lines and 34 trading houses and representations. minister of the Minister How is export-led industrialisation being stimulated? Many companies have attained ISO 9,000 standard and on Industry are highly What policy measures have been proposed and have gained the right to mark their products with CE. regarded. In 2002-03 implemented to diversify exports? Given the recent modernisation of many of our he was the Chairman More than 60 per cent of production by organisations plants, Belarus organisations have enjoyed increasing of the Committee on operating under the Ministry of Industry is sold in 125 success in export markets in Europe, Asia, Latin science and technologies. countries around the world. Exports have increased by America and Africa. He became Minister of nearly 140 per cent in the past eight months. Industry of the Republic Do you have a policy of economic diversification away of Belarus in 2003. from heavy machinery and agricultural products? Anatoly Rousetskiy is The Government of Belarus aims to increase the share a doctor of technical of the service sector as a proportion of GDP. sciences, professor and State prize laureate. What is your vision for the commercial and He was awarded with industrial landscape of Belarus in the medium term? Honoured Diploma of the Foreign trade and development will be focused Council of Ministers the on our traditional strengths; automotive, tractor and ‘service in work’ medal. agricultural machinery, metallurgy, instrumentation, He is the author of more electrical engineering, electronics and optical products. than 60 scientific works. We are also building new plants, modernising existing ones and thereby attracting leading international corporations to locate their factories in Belarus. An important objective for the Government of The economic Belarus and the Ministry of Industry is to increase the modernisation of life sciences sector as well as other sectors including Belarus focuses on micro electronics, telecoms, optical, information traditional strengths technology and nano-technology, F 27

FIRST BELARUS

Sustainable energy programme

INTERVIEW WITH ALEXANDER OZERETS MINISTER OF ENERGY

What are the key objectives in terms of energy ordinate energy networks with other European countries. policy in Belarus? We also believe in the importance of establishing electric The main goal of this Ministry is to achieve a reliable energy power markets in the CIS, EuroAsEu, the Baltic States supply for the benefit of domestic and business users while and other regional power markets. As part of this strategy taking account of environmental and ecological issues and we aim to conclude long term contacts for the supply and ensuring the efficient use of our energy resources. transport of energy, establish new and diversified suppliers Belarus has limited indigenous energy and power and organise joint ventures for fuel extraction and energy resources (sufficient only for 16 per cent of our needs) generation in Russia and neighbouring countries. and is therefore dependent on energy supplies from a single country – Russia. Natural gas represents the The issue of energy security and its impact on ALEXANDER OZERETS highest share of our fuel/power mix and we are therefore international relations is now top of the policy making agenda. How do you view this issue graduated from the sensitive to global fuel prices. These issues need to especially with regard to oil and gas transmission? Belarusian Polytechnical be resolved. In this context our key priorities at the Institute specialising Energy Ministry are; The diversification of the types Winston Churchill once said ‘The only solution to energy in ‘thermal electrical and suppliers of our energy requirements, increasing problems is diversification, diversification, diversification’. networks’. In 1993 he strategic energy reserves, improving energy efficiency, The current situation has demonstrated how right he was. graduated from the modernising our energy facilities, increasing the use of We aim to diversify away from a dependence on natural Academy of Management renewable and non-traditional energy resources and gas and we have plans to reduce its share of the energy in ‘economy and ensuring that the development of our energy sector mix by introducing coal, nuclear and renewables. The production management’. takes account of the environmental impact. Ministry of Energy is working closely with our neighbours From 1976-87 he worked We aim to reduce our dependency on natural gas with on the supply and transit of energy especially on the issue at the Vitebsk TPP. From the introduction of nuclear fuel and increasing the use of of supply routes, and the transit of oil, gas and electricity 1987-2000 he served coal. We also hope to develop competitive power projects, – we are looking at alternative energy supplies as well as as chief of the thermal given our increasing integration with the world economy. increasing energy transit across the territory of Belarus. technical equipment In terms of relations with the international energy These negotiations are taking place at the political level as service and was a market we aim to make use of the geopolitical position of well as between the energy companies. deputy director general Belarus and develop energy transport corridors and co- We have a well developed system for the underground for general issues. In April 2000 he became Director General of the Vitebsk Republican Unitary Enterprise of Power Engineering ‘Vitebskenergo’. He has been the Minister of Energy of the Republic of Belarus since May 2006.

The Lukoml Hydro Power Station – the biggest power 28 station in Belarus

FIRST storage of natural gas. There are plans to increase the policy. Within the strategic plan to 2020, clear measures We aim to underground storage capacity from 660 million cubic have been outlined for the introduction of renewable metres to 2 billion cubic metres by 2020 with further energy. The legal framework has been established to reduce our increases to 4.5 billion. This will create a three month allow renewable energy sources to be connected to reserve of natural gas in case supplies become limited. the power grid and financial benefits will be available. dependency Given our location at the centre of European energy Responsibility for renewable energy has been allocated flows- our power companies represent a reliable and to the Department of Power Efficiency – a State body on natural secure link in the network of international energy supply with the task of promoting the benefits of renewables. and transit. Belarusian companies are among the leading Renewable developments include a new hydropower gas with the European transport companies – they are reliable partners station and the reconstruction of existing ones. Wind with Russian oil, gas and energy supply companies and energy development has been analysed in a draft State introduction will provide the necessary energy transport expertise to programme. Solar energy is not considered a realistic EC countries and they are keen to develop and expand option in Belarus because of the particular meteorological of nuclear their co-operation in this area. conditions and the experience in other countries has not yet proved the economic benefits. fuel and How should risk be shared in the development of energy infrastructure? Environmental protection and social responsibility increasing the We are modernising and expanding the Belarusian are key issues in the energy sector. How are you energy generating capacity to reduce the risks of addressing this issue? use of coal supply and transit. This involves improving efficiency, Environmental protection and social responsibility are key augmenting infrastructure (including electricity and gas issues for the Ministry of Energy. A number of measures networks and oil and gas pipelines) to ensure ecological have been established to ensure environmental protection safety and reliability. and the prudent use of natural resources. The plan for As part of the plan for diversification we intend to use the period 2006-2010 is designed to reduce emissions of nuclear power, hydro resources, coal and wind farms. nitrogen oxides by at least 3.200 tons per annum, reduce Belarusian companies will also take part in oil and gas carbon dioxide by 1.2 million tonnes per annum, reduce extraction elsewhere – our companies are participating water consumption and the discharge of waste water, in oil extraction in Venezuela and soon Belarusian reduce surface and ground water contamination and to companies will be operating in oil extraction in Iran. reduce atmospheric contamination. Specific projects in oil transit and supply include The key environmental directives are; the transport of oil to Belarus and the European • Implementation of combined schemes of power Community via the ‘Odessa-Brody’ pipeline. With generation and steam/gas technologies. regard to gas transit we will reconsider the construction • Application of technological measures to reduce of a parallel ‘Yamal-Europe’ route and increase the nitrogen oxide formation. Modern Belarusian capacity of ‘Torzhuk-Dolina’ gas pipeline as well as • Modernisation of equipment at TPP and boiler plants. u electricity substation using spare capacity in the Belarus System. If these plans are implemented we will increase gas supply capacity to Europe by 70 billion cubic metres. Relations are being strengthened with the energy system of Poland with the construction of a power transmission line with a voltage of 400 KV as part of the Ross (Belarus)-Belostok-Narev (Poland) route with a DC insert. The annual volume of imported electricity along this line may reach 6 billion KWH. We are currently implementing a range of major projects to provide and increase transit volumes while safeguarding the physical safety of oil and gas pipelines, the widening of the electricity grid and strengthening electricity inter-connection with EC countries.

What is your position on the development of renewable energy resources including solar and wind power plants? What is the policy in this area? We fully understand the importance of renewable energy and this power source is the subject of State 29

FIRST The Free Economic Zone “Vitebsk” was founded on the 4th of August, 1999 with a projected lifespan of 30 years with the aim of attracting domestic and foreign investments. Currently more than 30 investment projects are being implemented on FEZ with the participation of investors from 13 countries, including Great Britain. FEZ “Vitebsk” has the benefi t of a favourable geographical position, developed infrastructure and preferential tax and customs regimes. FEZ “Vitebsk” covers 1,200 hectares and is located in Vitebsk city, with access to the most important trans- European highways. It is 50km from the border with the Russian Federation and less than 200km to the EU. At FEZ there is a preferential system of taxation for FEZ’s residents, that reduces the fi nancial burden by 30-40% and allows short term payback on investment projects. There are also customs benefi ts for residents as a result of the abolition of customs duty for the import of raw materials and equipment. The administration of FEZ “Vitebsk” invites cooperation from Belorussian and foreign businessmen, who are interested in creating domestic initiatives or joint ventures in FEZ “Vitebsk”. We have a number of long- term, innovative projects available.

Contact information: The Administration of FEZ “Vitebsk”, 210605, Vitebsk, PBrovki street, 50 Number/Fax +375/212/260 802, www.fez-vitebsk.com email: [email protected] BELARUS

t • Introduction of recycling schemes including investment requirements, the issue of environmental These cleaning of waste water. protection, infrastructure vulnerability, political • Reducing water use and contamination at power plants. instability, natural disasters and other threats. programmes • Controlling discharges, contamination and thermal The basic response to this situation is the pursuit heating. of a more reliable energy system with reduced carbon will require The Energy Ministry strictly controls contamination and emissions. I believe that we must aim for greater limits effluents to approved levels, using laboratories and transparency, predictability and stability in global an investment energy facilities. For example an automated contaminant energy markets, diversification of energy sources, an control system has been installed at the biggest Power improved investment climate and the provision of a of about Station in Belarus – the Lukoml Hydro Power Plant. viable energy infrastructure. By 2013 all boiler and combusting units above 50MW US$19 billion capacity will be equipped with these systems. What is your vision of the energy sector in Belarus over the coming decade? What are the key challenges and opportunities The development of the energy sector of Belarus is facing the global energy sector? outlined in our energy programme. This involves the The global energy sector is faced with a number of modernisation of existing power plants using the steam dilemmas. The global distribution of oil is a major and gas technologies as well as small TPPs at individual cause of geopolitical tension. The main consumers are plants. Work has started on the construction of hydro predominantly highly industrialised nations and the fiast power plants on the main rivers in Belarus with total growth economies of India and China while the world’s capacity reaching over 200 MW by 2020. hydrocarbon reserves are concentrated in a relatively We will also continue to build renewable power small number of developing and transitional economies. facilities including a nuclear power station with 2000 The energy sector is capital intensive and investment MW capacity, a number of thermal plants using coal has long pay-back periods. According to the International will have capacity of 800 MW. The electricity grid will Energy Agency, global demand for power will grow by also be updated and we are to construct more extensive 55 per cent reaching 17.7 billion barrels of oil equivalent underground gas storage facilities. by 2030. Developing countries will account for 74 per These programmes will require an investment of cent of energy consumption. about US$19 billion and there will be opportunities for The global energy is therefore faced with high and foreign investors. These development plans will reduce unstable oil prices, a growing demand for energy, an energy to 31 per cent of GDP by 2010, 50 per cent by increasing dependence on imported energy, greater 2015 and by 60 per cent of 2005 levels. F

3RD QUARTER 2007 EST. 1984 2ND QUARTER 2007 EST. 1984

FORUM FOR DECISION MAKERS FORUM FOR DECISION MAKERS PUBLISHING EVENT MANAGEMENT AWARD SCHEMES

SEEKING REGIONAL SOLUTIONS BUILDING A NEW CONSENSUS The African Union’s John Kufuor on governance, development and institutional reform Mexico’s Felipe Calderón on free trade, multilateralism and delivering change

ALSO IN THIS ISSUE ALSO IN THIS ISSUE Ban Ki-Moon hails UN-AU cooperation in Darfur Sandy Flockhart assesses the outlook for Latin America’s banking sector Jean Lemierre on Russia’s integration with the world economy Sami Khiyami makes the case for an expanded role for Syria in the Middle East Hifikepunye Pohamba highlights Namibia’s strategic role in Southern Africa John Agyekum Kufuor reflects on the lessons and legacy of Ghanaian independence To order back issues or for any James Moss-Solomon assesses the economic impact of the Caribbean Single Market Sheik Sabah Al-Ahmad Al-Jabir Al-Sabah explores the shared history of Britain and Kuwait One hundred and forty-five pounds sterling per annum One hundred and forty-five pounds sterling per annum information please contact:

FIRST, 56 Haymarket, OFFICIAL REPORT London SW1Y 4RN, UK GHANA political & economic stability

Tel: +44 20 7389 9650 Fax: +44 20 7389 9644 Email: publisher @firstmagazine.com

OFFICIAL REPORT TO MARK THE STATE VISIT OF HE JOHN AGYEKUM KUFUOR PRESIDENT OF THE REPUBLIC OF GHANA www.firstmagazine.com AND CHAIRMAN OF THE AFRICAN UNION

BELARUS

Economy and the environment

INTERVIEW WITH LEONTIY KHORUZHIK MINISTER OF NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION OF THE REPUBLIC OF BELARUS

What are the main strategic objectives for your enhancing research and development and strengthening Ministry? The oil and natural gas sector accounts international cooperation. The issue of geological for a high percentage of Belarus’s trade with development, prospecting for minerals and the rational Russia. What is your strategy for ensuring the use of minerals are also given special attention. growth of this vital sector? Belarus has a history of The environmental policy is constantly developing re-exporting Russian oil at market price. Will this process be maintained? and improving, taking into account new socioeconomic conditions as well as the development of international The formation of the Republic of Belarus as a sovereign relations, accession to environmental agreements, new state and the transition to a globally integrated economy global challenges and threats to the environment. has resulted in our pursuing certain strategic objectives The Republic of Belarus has a well developed LEONTIY KHORUZHIK including global economic integration. industrial, agrarian and transport infrastructure and graduated from the Following the recommendations of the environmental large oil refineries and chemical enterprises form the Belarusian Institute conferences in Rio de Janeiro (1992) and Johannesburg basis of our industrial production. Big cattle-breeding of Agricultural (2002) the Republic of Belarus is making progress in centres and farms equipped with modern machinery Mechanisation finding solutions to socio-economic problems. Our aim form the basis of our rural economy. majoring in Mechanical is to use our scientific and technical expertise to allow When designing our environmental policy we take Engineering. His career our citizens to live in a healthy and safe environment. a systematic approach to balance the environmental, started in 1973 at the The economic development of Belarus depends on economic and social impacts. Our environmental Zhirovichi Agricultural the use of energy which impacts the environment and objectives are carefully considered by the Ministry of College where he ecosystems as a result of emissions and toxic pollution. the Environment, other Ministries, local authorities, became the Deputy These issues must be addressed with a coherent business groups and the public. A consensus is achieved Principle. Following a environment policy and a new thinking on the issue of and specific goals are agreed at the regional and local number of key posts economic development. level. Priority is given to solutions which achieve the he was appointed First The last decade has seen the active development best environmental results. Deputy to the Head of of our environmental policy, taking account of We place particular emphasis on solving global the Presidential Affairs sustainable development, the principle of ‘polluter and bilateral issues by developing international Management Department pays’, the importance of environmental assessments, cooperation and meeting our commitments to in 1994. Since 2001 he transparency and social justice. bilateral and multilateral agreements, at the European has been the Minister The strategic goals of our environment policy are; and global levels. of Natural resources and • Creating a sustainable environment Our long term aim is to strengthen environmental Environmental Protection • Ensuring environmental security policy in the following areas; of the Republic of • Improving health and living conditions • Solving environmental issues through the use of Belarus. In 2006 he was • Maintaining sensible use of natural resources the best available technology including improving awarded the medal «For • Improving the legal and economic framework of production processes, recycling, energy efficiency and Labour Achievements». environmental protection preventing land degradation and developing climate The most important objectives of our environmental change initiatives. policy, as stated in the National Strategy of Sustainable • Preserving ecological systems and species via Development for the period to 2020, and the National scientifically proven and efficient regulation. Action Plan on Rational Use of Natural Resources and • Introducing environmental protection in production Environmental Protection 2006-2010, include further and consumption processes. improvements to the regulatory framework, developing • Improving the efficiency of monitoring and new approaches and economic measures for nature environmental quality control. management, reducing air and water pollution, • Increasing the availability of reliable environmental developing waste management systems, enhancing information. biological diversity and conservation, protecting As far as oil and gas are the energy resources the land and landscapes, strengthening environmental most widely used in the economy of Belarus historically monitoring systems and hydro-meteorological activity, Russian Federation has been the major importer 33

FIRST BELARUS

When of these resources to our country. Nowadays while and has significant experience in mining minerals such maintaining this commercial relationship with Russia as potassium and rock salts, dolomite, raw materials for designing our the Republic of Belarus is following the global trends the cement and glass industries and has the production to diversify energy sources choosing among many facilities for various construction materials. environmental environmentally safe and economically efficient ones. On the basis of explored mineral deposits we have Since the times of the Soviet Union several large oil- facilities for peat recovery, production of potassium policy we take refinery plants have been operating in the Republic of and carbonate fertilisers, rock salt and a range of Belarus. Their total consumption of raw oil is about 20 construction materials. a systematic million tons per year. Annual extraction of oil in the To maintain the supply of mineral resources, the Republic of Belarus is not more than 2 million tons, Ministry of Environment has encouraged the search approach to thus the mentioned enterprises have to import the most and exploration of deposits. This exploration work of the raw from other countries, primarily from Russia. has had positive results: commercial development of balance the The surplus products of these oil refineries are sold by minerals including iron ores, gypsum, bentonitic clay, Belarus to third countries on the external market. phosphorites, glass sands and others has been initiated. environmental, To develop these deposits further the Government is What role can foreign companies play in the natural interested in attracting domestic and foreign private economic and Resource sector? The ownership and control of Natural investment and will provide equal conditions for both. Resources is a highly sensitive issue in many parts of Governmental investment policy is directed at the world. To what extent are these resources viewed encouraging investment in Belarus, including the social impacts as a strategic asset in Belarus? What are the guiding principles of Natural Resource policy in Belarus? development of minerals deposits and the creation of a in order to favourable investment climate. The sustainable economic development of the Republic Today we can offer foreign companies several set key of Belarus is not feasible without the balanced use of investment opportunities: the establishment of joint mineral resources, which is the basis for the well-being mining enterprises, the creation of private mining objectives of the population as well as ensuring national security. enterprises by means of investment contracts with the The policy that we pursue in the development Republic of Belarus and concessions on some deposits. and use of our own mineral resources is based on More detailed information on these issues can be consideration of national security and state interests. obtained from the Ministry of Natural resources and In other words, we try to satisfy our internal needs Environmental Protection, which has been appointed and are ready to export our mineral resource surplus by the Government as the concession body. There are while avoiding any possible loss for our current and also a number of opportunities to develop construction future generations. material deposits including sand gravel and ceramic clay The Republic of Belarus possesses sufficient reserves and the Ministry invites foreign companies to discuss

Protecting the natural environment is a key priority of 34 Government Policy

FIRST the exploration and processing of these minerals. as well as the Antarctic Treaty. On a bilateral basis we The Republic Today there are more than 50 sites of fresh, high have established a legal and institutional background quality ground water which is suitable for drinking and for cooperation with bordering countries (Russia, of Belarus is which can be commercialised. We are very interested in Ukraine, Poland, Lithuania, Latvia), Serbia, as well discussing with companies the possibility of extracting, as the EU states of Bulgaria and Slovakia. We are also party to 25 bottling and exporting this water. developing contacts with Sweden, Austria, Germany, The Ministry of Environment is ready to consider Czech Republic, Moldova, Azerbaijan, Armenia and international proposals concerning the development of potassium other states. salt deposits, the production of crushed rock as well as The Republic of Belarus actively cooperates with a environmental slate, coal, brown coal and other minerals. considerable number of international governmental To answer the question on the role of foreign and non-governmental organisations, including agreements, companies in our mining sector I would like to describe UNEP, where Belarus is a member of the Governing some examples: the Chinese company CITIC is helping Council. We participate in the process ‘Environment protocols and expand some cement plants, the Russian company for Europe’ and hold the permanent membership of the ITERA and the Iranian company AZARAB are investing Committee on Environmental policy of UNECE and amendments in the development of cement raw materials deposits and our representatives take part in the meetings of a special the construction of new cement plants. working group of OECD on environmental issues. The Republic of Belarus is also undertaking the We express our gratitude to those international expansion of geological prospecting services, improving financial organisations – Global Environment Facility, the exploration methods and investigating new mining the World Bank, as well as donor-countries, for technologies. We are interested in receiving proposals providing considerable resources for the implementation related to hydraulic borehole mining, in-situ leaching of environmental projects and we strongly hope for and the gasification of combustible minerals. further fruitful cooperation. Today we are very interested in the promotion The preservation of the environment and fragile and acceleration of the process of ratification of the ecosystems has become a global priority. How are you Belarusian Amendment to the Annex of the Kyoto addressing this issue in the Natural Resource sector? Protocol, in which Belarus assumes its obligations to A prominent challenge of the 21st Century is the reduce green house gas emissions considerably. controversy surrounding the relationship between Global challenges are also reflected in the national society and the environment – a global issue. Addressing plans and programmes of the Republic of Belarus, this matter requires the mutual effort of all countries including those on persistent organic pollutants, Oil refineries form regardless of their political and state structures. climate change mitigation, preservation of biodiversity the basis of chemical Within this international framework, this Ministry and many others. F production in Belarus aims to develop international partnerships, play its part in multilateral agreements and strengthen bilateral cooperation. We also aim to enhance links with international governmental and financial institutes, prepare project proposals to attract investment and provide technical assistance to enable the country to implement its environmental plans. Currently, the Republic of Belarus is party to 25 international environmental agreements, protocols and amendments. The country has ratified global agreements on climate change, the preservation of biological diversity, combating desertification, protection of the ozone layer and the reduction of persistent organic pollutants. The Convention on Long- range Transborder Air Pollution, the Convention on the Protection and Use of Transborder Watercourses and International Lakes (Water Convention) and the Aarhus Convention are among the European agreements to which we adhere. We maintain our interest in joining new agreements especially those relating to issues of strategic environmental assessment, water and health issues, 35

FIRST BELARUS

Security and reliability

INTERVIEW WITH PETR PROKOPOVICH CHAIRMAN, NATIONAL BANK OF BELARUS

What are your key aims and objectives in terms of the banking system. The share of foreign investment in monetary policy in Belarus? the Bank’s capital funds increased to 22.25 per cent in Monetary policy, as part of a comprehensive economic September 2008, compared to 7.84 per cent in January policy, is designed to maximise economic and social 2007. This process will continue and we are working development. The National Bank’s key goal is to ensure on the sale to strategic investors of Belarusbank and the stability of the national currency. Belagroprombank (10-20 per cent) and controlling Given the openness of the Belarusian economy, equity stakes in BPS Bank and Belinvestbank. foreign exchange policy is an important instrument In addition the credit checking bureau operational in maintaining exchange rate stability. In 2009 it since 2007 will collect data on credit agreements. is planned to fix the Belarusian ruble to a foreign We have also instituted a deposit guarantee scheme PETR PROKOPOVICH currency basket (Euro, US dollar and the Russian covering accounts of 5000 Euros or equivalent. graduated in 1966 ruble). We aim to establish similar monetary tools from the Construction- as deployed by the European Central Bank and the What is the currency exchange rate policy? Do you Engineering Institute Bank of England – recognised leaders in the field. We see changes in the system? of Dnepropetrovsk. He monitor banking liquidity and capital requirements The policy aims to ensure the stability of the Belarusian went on to manage a and are making increasing use of interest rates. We also ruble. In 2008 the National Bank maintained an official number of construction aim to strengthen and develop the banking system and rate fixed to the US$ in a horizontal corridor of plus/ organisations. In ensure a reliable and secure payment mechanism. minus 2.5 per cent. From 1st September 2009 a tie with 1996 he became the a basket of European currencies will be established first deputy to the How important is foreign direct investment to the within a level of plus/minus 5 per cent. Prime Minister of the Belarus economy and what policy initiatives are in This exchange rate policy will decrease macro Republic of Belarus. In place to promote this form of investment? economic risks, improve the investment climate and 1998 he was appointed We aim to attract foreign investment to help enhance competitiveness. Chair of the Board of finance the economy. This will enable Belarus to the National Bank. further promote economic expansion through new What is your vision for National Bank policy over During this period technologies, modern systems and full employment. the medium term? radical reforms were Economic measures to further improve the business In the medium term we aim to maintain economic instituted, the national climate are certainly making Belarus an attractive place stability and exchange stability. The aim of banking currency was stabilised, to do business. policy will be to; gold and foreign • Improve stability and bring overall banking standards currency reserves What role does domestic investment play in the up to European levels. were established and Belarus economy and what policy initiatives are in • Increase financial security through supervision, significant foreign place to promote this form of investment? technology and cutting edge systems. investment was Investment activity increased by 16.2 per cent in 2007 and The effective, reliable and secure functioning of attracted. For this constituted 27.1 per cent of GDP (compared to a global payment mechanisms is essential for financial stability important contribution average of 22.7 per cent). Between January to August in Belarus and will be based on the development of an to the development 2008, investment in the Capital base increased 21.8 per electronic cashless settlement. F of the economy, Petr cent compared to the same period in 2007. A range of Prokopovich was benefits to increase domestic and foreign investment Key policy goals awarded with ‘Hero of include; tax benefits, customs benefits and modernising Belarus’, the highest financial institutions such as the Stock Exchange, • Stability of National currency award of the state. venture capital, trusts and fund management. • Attract foreign investment The Banking sector is accelerating in Belarus. Do you see liberalisation in this area? • Increase supervision and security The National Bank, in co-operation with the • Utilise new technology 36 Government, is promoting a process of liberalisation in

FIRST BELAERONAVIGATSIA STATE-OWNED ENTERPRISE

Belaeronavigatsia Republican Unitary Air Navigation Service Enterprise (Belaeronavigatsia State-Owned Enterprise) was created in 1996 in accordance with the Decree of the President of the Republic of Belarus No.126 of 4th April 1995 and the Decision of the State Aviation Committee of the Republic of Belarus. The priorities of Belaeronavigatsia State-Owned Enterprise are improvement and rational use of airspace that are for the good of all departments interested in it ensuring of cost-effectiveness, regularity and safety of air traffic, continuous planning and control of air traffic. The enterprise employs more than 1400 highly qualified specialists, who provide security for more than 170 thousand domestic and international flights per year. The airports in Brest, Vitebsk, Mogilev and Grodno are parts of Belaeronavigatsia State-Owned Enterprise. In their disposal they have modern buildings and facilities, ATC Services. The airports are granted with the permission to provide service to all types of aircraft including foreign aircraft B767-200ER, B757-200/500, B737-200/500/800, A310-200/300. The aircraft operating in our airports carry out passenger and cargo flights.