Russia Remains Main Investor For Belarusian Economy
By Elena Novozhilova
Belorusskie Novosty
Russia puts more money into the Belarusian economy than any other country – in 2007 it contributed 33.5% of all foreign investments in the country. This fact was announced to BelTA by Belarusian Minister of Foreign Affairs Sergey Martynov.
The Minister said that apart from Russians, there are some other nations keen on investing in Belarus: the British invested 860.7 million US dollars last year (15.9% of the total); Swiss – 606.4 million dollars (11.2%), Austrians – 594 million dollars. The total foreign investments in 2007 are 5.4 billion dollars, said Martynov.
Interestingly, the country of precise watches and delicious chocolate, Switzerland, has been our main direct investor for several years. In 2007, Swiss direct investments totalled to 580.3 million dollars or 44.2% of all direct investments.
“Offers from foreign investors don’t just come from nowhere – it’s the result of the systematic work the government does to improve the business climate in the country,” pointed out the Foreign Minister. “Belarus is the only CIS country that has the Investment Code which facilitates investments, ensures governmental support, and protects the rights of foreign investors in the country. There is the Foreign Investments Consultation Council chaired by the Prime Minister, which aim is to improve the business climate. The National Investments Agency has been founded; there are six free economic areas with business preferences.” The Minister also said that Belarus is the leading CIS country for economy growth rates.
Sounds pushy, doesn’t it? If it concerns the GNP rates, then last year, and today we are third in the Commonwealth. The CIS Statistics Committee said that GNP growth in January 2008 in Belarus was 8.3%, while in Azerbaijan it was 11.3%, Armenia 9.9%. The GNP growth in Russia was 7.9%, Kyrgyzstan 7.4%, Ukraine 4.9%, Kazakhstan – 3.8%, Tajikistan – 1.5%.
The industrial output growth of 12.1% is in fact the biggest. But it can be explained by seasonal holidays as is the case in Russia, and by slower economic activity in the beginning of the year.
We also come third with wages – after Russia and Kazakhstan. The Belarusian Ministry of Statistics said that Russians on average earn 529 dollars a month, Kazakhs – 434, Belarusians – 326, Ukrainians – 268.
If Belarus is the best at something in the post soviet area, then it is the depreciation of the national currency. BelaPAN made this conclusion after examining the official dollar exchange rates on 1 January 2008 without taking into account money reforms and direct denominations of the national currencies.
Turkmenistan comes second, Georgia – third. The Belarusian ruble depreciated against the US dollar 6.9 times more than the national currency in Turkmenistan; 13.5 times more that in Georgia; 16.7 times more than in Uzbekistan, 42.6 times than in Ukraine; 62.1 times more than in Tajikistan’s; 353 times more than in Armenia; 357 times more than in Kazakhstan; 509 times more than in Azerbaijan; 876 times more than in Russia; 1,899 times more than in Moldova; 3.028 times more than in Kyrgyzstan; 91,210 times more than in Lithuania; 202,102 times more than in Estonia; and 22.107 times more than Latvian lat!
Various international business ratings that are not appreciated in this country, also keep quiet about any progress in the Belarusian economy. For instance, the annual rating of economically free countries ranked Belarus the 150th out of 157 countries featured.
The Heritage Foundation American Research Fund and The Wall Street Journal also regularly evaluate national economies in 10 nominations, including, investment freedom, trade liberalisation, the size of the government, etc. “Belarus’ low position in the rating is explained by the fact that the country refused to carry out post-soviet reforms,” explained the experts. “If compared to last year, Belarus’ rating fell down by another 1.8 point primarily because of the diminishing freedom of trade.”
Foreign experts also found other indexes low in Belarus – for instance, financial freedom, the right of proprietorship, freedom from corruption. They said that the country comes last in the European economic freedom rating.
In fact, economic freedom was something that the Belarusian government did not really need in the past. In his speech at the Russian Duma the other day, Russian Minister of Finance Sergey Shatalov stated that Russia had been subsidising the Belarusian economy for the past several years by supplying cheap gas and by “not making the final decision about the export duty for crude oil particularly when Belarus sells on oil processed products. However, we have solved the issue with export duties a couple of years ago, and undertook a programme to increase prices in gas”. Shatalov also said that the trade balance between Belarus and Russia has consistently been in Russia’s favour despite the fact that Belarus sells 40-45% of all its good to Russia.
So, Russians for us are not just the main investors – they are the main suppliers, and the main customers.