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Belarus-Economy 2017.Indd 2 General Information Business Climate The economy of the Republic of Belarus is open and export-oriented. The major branches of the Belarusian economy include the processing industry, agriculture, construction, trade and transport. Belarus ranks among the world's largest exporters of potash fertilizers, 106.1 % 102.3 % 101.0 % 98.6 % 100.3 % freight vehicles, tractors, road-building and utility machinery, and it 97.4 % 96.8 % 94.8 % occupies an increasingly prominent position in the sphere of software development and computer services. Belarus adheres to the socially-oriented model of the market economy when selective state control over some spheres of economic activity is maintained. In recent times the Belarusian economy has been functioning against a backdrop of external economic environment. However, macroeconomic stabilization has been achieved in Belarus due to stern measures in monetary, fiscal and budgetary policy. Analysts Gross domestic Industrial Retail Freights carried express cautious optimism on coherent and gradual solution of major product production turnover index problems the national economy faces. January—June 2016 as compared to January—June 2015 January—June 2017 as compared to January—June 2016 There is a tendency to restore economic growth, which is facilitated Dynamics of Major Macroeconomic Indicators by the gradual recovery in external and domestic demand against (in comparable prices)* a backdrop of the gradual easing of conditions on the nancial markets. * According to Belstat In 2017, in ation has declined below the in ation target, the positive dynamics in the balance of payments has been achieved. The Republic runs a budget surplus. Economic growth is predicted to accelerate. Despite signi cant obligations in relation to foreign currency debt servicing, the National Bank of the Republic of Belarus manages to increase international reserves. In 2010—2016, the country's GDP went up 3.2 % in comparable prices, while the growth of labor productivity in that period was 10.2 %. GDP per capita based on purchasing power parity (PPP) increased from $ 15 400 in 2010 to $ 17 500 in 2016. In GDP (PPP) per capita, Belarus ranked 4th among the CIS countries, outpacing Armenia, Turkmenistan and Ukraine. According to macro reviews of the Eurasian Development Bank, the country's GDP growth of 1.2 % is expected in 2018—2019. Business Climate 3 Stimulation of Business Initiative Banking System In 2010, Belarusian authorities adopted policies aimed at the creation Belarus has a two-level banking system consisting of the National of most favorable environment for local and foreign businesses. Bank of the Republic of Belarus (the central bank) and second-tier In 2017, President of the Republic of Belarus Alexander Lukashenko commercial banks. As of 01.07.2017 it is instructed the government to prepare a package of documents to comprised of 27 banks and non- stimulate business activity. bank nancial institutions, that provide banking services. This is not the rst step towards business community: in 2016, Belarus adopted a number of legal acts aimed at creating favorable conditions The Development Bank for doing business. Every year these e orts are recognized by the of the Republic of Be- World Bank in Doing Business ranking. larus operates in Further liberalization of the economic environment involves funda- the country with mental reforms of relations between the government and business the main goals community/organizations regarding the encouragement of deve- to nance go- lopment, export promotion, development of tender infrastructure, ver nment pro- measu res of control, payment of taxes, etc. grams, imple- ment socially Tax, customs duty and other concessions are provided to small significant businesses in rural areas and small towns. For example, when investment using a speci c tax regime, small enterprises may pay only one tax projects and (amounting to 3—5 % of the revenue), and maintain records according export credi- to the simpli ed procedure. ting. Free Economic Zones There are 6 free economic zones in Belarus Belarusian (FEZs). They are aimed at fostering high- Free Economic Zones tech manufacturing. "Brest" The core objectives of FEZs are to attract foreign and local investments to develop "Gomel-Raton" and promote export-oriented industries; "Minsk" create jobs; promote exports. Like all over the world special customs, registration "Vitebsk" and tax regimes of FEZs provide "Mogilev" enterprises with an opportunity to work in particularly favorable conditions. "Grodnoinvest" Main Privileges for FEZ Residents Income tax exemption for a period of 5 years from the date of profi t declaration, then a 50 % discount of the standard tax rate applies; 50 % VAT discount for import-substituting goods sold on the territory of Belarus; The residents are entitled to an exemption of real estate taxes on the property located on the territory of FEZs. 4 Manufacturing The manufacturing sector accounts for a quarter of the gross domestic product, about 35 % of all capital assets are concentrated in this segment, and 23 % of the population is employed in the sector. Manufacture of chemical products 9.5 % Manufacture of rubber and plastic products, 8.8 % other nonmetal mineral products Manufacture of coke and petroleum products 15.0 % Metallurgy. Manufacture of fi nished metal products, 7.1 % except for machinery and equipment Manufacture of machinery and equipment, 6.4 % Belarus ranks 37th not included in other groups in the Competitive Industrial Manufacturing Performance Index ranking Industry Structure, Manufacture of textile products, 4.6 % clothing, leather and fur products 2016* Manufacture of wooden and paper products; * According to Belstat 4.5 % printing industry and distribution of recorded media Manufacture of foodstuff s, beverages and tobacco products 29.6 % Manufacture of other fi nished products; 4.3 % repair, installation of machinery and equipment Manufacture of main pharmaceutical products and drugs 1.4 % 3.8 % Manufacture of transport vehicles and equipment Manufacture of computer hardware, electronic and optical products 1.8 % 3.2 % Manufacture of electric devices Top 10 Belarusian Products Freight vehicles, road-building Refrigerators Meat and construction machinery Fuel Flax fi ber and domestic appliances products Tractors and agricultural Chemical fi bers Dairy machinery Fertilizers Furniture and yarns products Chemical Mechanical Engineering and Petrochemical Belarus specializes in the manufactu- Key Enterprises ring of freight vehicles, buses and spe- of the Industry Industry cial-purpose vehicles. Agricultural ma- chinery is manufactured here as well. Minsk Automobile Plant, Belarus specializes in the pro- Key Enterprises OJSC duction of potash, nitrogen of the Industry Minsk Automobile Plant is among the and phosphate fertilizers, fuel world's leading producers of quarry Belarusian Automobile and other petroleum products, Belaruskali, OJSC equipment. It accounts for a third of Plant, OJSC (Žodzina) the global market of rock haulers. which are in high demand GrodnoAzot, OJSC Minsk Tractor Works, in foreign markets. Minsk Tractor Works exports its' OJSC Naftan, OJSC pro ducts to markets of more than Enterprises of the petroleum- Amkodor, OJSC refining industry are modern Mozyr Oil Refi nery, OJSC 60 countries and has assembly complexes that specialize in plants in di erent counties all over Belcommunmash, OJSC the manufacture of high quali- the world. ty petroleum products exported to the EU and EAEU countries. Road building machinery by Amkodor, trams and trolleybuses by Bel- Key enterprises of the industry, including those specializing in plastics communmash, electric trains, which Belcommunmash manufactures and synthetic resin manufacturing, are members of Belneftekhim (Be- together with Stadler (Switzerland), are widely known outside Belarus. larusian State Concern for Oil and Chemistry). Belarusian State Concern for Oil and Chemistry Metallurgical Complex Over 60 enterprises The metallurgical complex includes enterprises which produce Compliance with the requirements of ISO 9000 standard steel pipes and tubes, cast sections, bars, wire rod for various of QMS applications, steel cord, metalware, etc. The largest manufacturer of ferrous products in Belarus is Belarusian Steel Works, OJSC Products exported to more than 100 countries (Žlobin). Manufacturing 5 Electrical Fuel and Energy Engineering Sector The industry is represented Key Enterprises This sector includes systems of production, transportation, storage and by several large holdings and of the Industry manufacture of all kinds of energy resources. enterprises specializing in The decision to build in Belarus a nucle- manufacturing of high qua- Minsk Electrotechnical Plant ar power plant with the capacity of up to About lity electrical equipment, i.e. named after V. I. Kozlov, OJSC 2.400 MW (2 × 1200) was made in 2008. elec tric transformers, cabling The NPP will allow reducing the prime cost and wiring products, electric Mogilevliftmash, OJSC 85 % of energy produced by up to 20 %. of energy resources engines, elevator equipment, Belaruskabel, OJSC involved in the electric energy meters and The rst nuclear power plant unit is expect- national economy is imported electricity distribution equip- Brest Electrotechnical Plant, ed to be put into operation in 2019, and the ment. OJSC second will be launched in 2020. Construction Sector Instrument Making and Optical Mechanics Construction materials production enter- Construction prises
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