[b]or Belarusian investment forum in the context of new partnership possibilities[/b]Andrey Giro, Ambassador Extraordinary and Plenipotentiary of Belarus into Federative Republic of germany, answers to the questions of the magazineDear Mr. Ambassador! How does the Belarusian Investment Forum in Frankfurt am Main differ from the similar event which took place two years ago in the financial capital of London? Has there been any progression?Attracting direct foreign investments is a priority for most global export-oriented states. Only a few countries, being rich in minerals, can ensure sustainable development exclusively from domestic resources. Accordingly, the Belarusian Government’s decision to organise another Investment Forum was no surprise. In fact, it was a logical move, with the programme aiming to show the liberalisation of the economy, the simplification of business procedures and the privatisation of state-owned sites.
Andrey Giro, Ambassador Extraordinary and Plenipotentiary of Belarus into Federative Republic of germany, answers to the questions of the magazine
Dear Mr. Ambassador! How does the Belarusian Investment Forum in Frankfurt am Main differ from the similar event which took place two years ago in the financial capital of London? Has there been any progression?
Attracting direct foreign investments is a priority for most global export-oriented states. Only a few countries, being rich in minerals, can ensure sustainable development exclusively from domestic resources. Accordingly, the Belarusian Government’s decision to organise another Investment Forum was no surprise. In fact, it was a logical move, with the programme aiming to show the liberalisation of the economy, the simplification of business procedures and the privatisation of state-owned sites.
Our major task is to attract the attention of potential investors, not only from Germany but from other states, showing them that Belarus offers unique opportunities. We rely on creating attractive conditions for setting up manufacturing and doing business, stressing that we offer a gateway to sales within the new Customs Union. In addition, we have an advantageous geographical position and a highly qualified workforce. Belarusians are known for being hard-working, disciplined and organised, while being able to work within a social market economy. They are decent and orderly.
Liberalisation, the simplification of the taxation system, privatisation and legal guarantees for investors are improving the investment climate in Belarus. These have laid the foundation of succession at the forums in Frankfurt am Main and London. We’d like to continue speaking to investors in the language which is clear to them in the financial capitals of continental Europe. The 2009 Investment Forum in Minsk must be mentioned too. That in Frankfurt am Main is the third in a row but the first such major event in Germany. In London, in 2008, the event was organised during the global financial crisis. Meanwhile, that in Germany is taking place under different circumstances; we are now overcoming the consequences of the crisis. Belarusian Eurobonds are bright confirmation of the world’s emergence from financial difficulties. Deutsche Bank, headquartered in Frankfurt am Main, helped with their issue. These and other factors — such as GDP growth in Germany reaching a record of 3.5 percent by late 2010 — allow us to hope that Western investors will show interest in our region, and in Belarus in particular.
The ‘demonstration’ of the Belarusian economy is a kind of premiere, with many hearing of Belarus for the first time. However, many were already aware of Belarus’ economic potential, since Germany has long since mastered the Belarusian market. Presenting our opportunities is simply the icing on the cake.
What is the aim of the Belarusian Investment Forum in Frankfurt, in the present political and economic context?
Belarus is no longer a ‘blank spot’ on the map of Europe for the German political and economic elite. Moreover, the intensive development of dialogue at various levels shows that we don’t occupy last place in Germany’s ‘Eastern policy’. This year alone, Belarusian and German foreign ministers met twice officially.
Hanover has hosted the second Belarusian-German Energy Forum, while Berlin saw the sixth session of the Belarusian-German Council for Economic Co-operation. Germany was visited by business circles from Minsk and Vitebsk Region, while German entrepreneurs paid a return visit to Belarus. Over 350 companies with German capital are successfully operating in our country, while almost a hundred German firms are represented, alongside the German-Belarusian Economic Club and the German Economic Office in Belarus. However, we have no desire to stop there. Naturally, competition doesn’t stand still, so we need to keep up. Accordingly, we decided to organise our investment forum in Germany this time, since it’s the country with the most powerful economy in the EU.
I’d like to stress another, no less important, aspect; the Belarusian Investment Forum is taking place as part of Euro Finance Week — the largest event in Europe’s financial life, which annually gathers about 10,000 participants from all over the globe. As a result, the presentation of our economic possibilities is aimed not only at German businessmen and financiers. It aims to attract the attention of all participants of Euro Finance Week.
Our practical tasks are evident: we want potential investors to learn more about our country, asking questions of the heads of the Belarusian Government and communicating with Belarusian businessmen. They can establish useful contacts, while outlining promising areas for co-operation and liaisons with Belarus. We also aim to sign concrete agreements and contracts in coming years.
Germany is viewed by Belarusians as a key partner for economic modernisation. Is it justifying its title as an exporter of advanced technologies to Belarusian industry? To what extent is Germany helping the technical re-equipment of Belarusian enterprises?
Our data unambiguously testifies to Germany’s leading role in the modernisation and technical re-equipment of Belarusian enterprises. Over the last decade or so, we’ve been purchasing tools, high-tech equipment and the latest technologies from Germany, worth $1bn annually. This explains the traditional negative balance of bilateral trade, but imports from Germany are justified, since they enhance our export potential. Our German partners have helped us modernise and master the production of new manufactures: at the Belarusian Steel Works, Integral, Minsk Tractor Works and Grodnokhimvolokno.
Alternative energy is among the most promising directions for our interaction, since German firms are globally acknowledged as leaders in the manufacture of equipment for harnessing solar and wind power, biomass and other renewable energy sources. With the help of German firms, Belarus has been constructing its first wind park and bio-gas facilities. Our country has been building enterprises to process household industrial waste and to produce modern construction materials, using advanced technologies developed in Germany.
In fact, German technologies are present in every production sector of our economy, being reliable, delivered on time and coming with high quality technical service maintenance contracts. This is highly appreciated by Belarusian customers.
Which proposals have Belarusians taken to Frankfurt am Main?
The Belarusian Investment Forum is organised according to thematic sections, with plenary sittings. The former allow Belarusian participants to present their proposals on investment co-operation. Belarus’ National Bank and Finance Ministry oversee the sections devoted to banking activity and the investment attractiveness of our financial market. In turn, infrastructure development within the Customs Union of Belarus, Russia and Kazakhstan in the field of transport, logistics, construction and tourism is being discussed during the second section, supervised by the Transport Ministry, the Construction and Architecture Ministry, the Tourism and Sports Ministry and regional executive committees. Other sections are devoted to promising investment areas involving industry and agriculture, energy efficiency and ecology, and renewable energy sources. We believe this format will allow participants to discuss proposals from Belarus in a business-like manner, with potential investors able to share their expertise on how these ventures might be realised.
Experience of organising similar events in Germany proves that contacts behind the scenes are no less important, with liaisons made during breaks, receptions and business lunches.
We are hopeful of success, since the largest public organisations are our partners; flagships of German industry. The Committee on Eastern European Economic Relations is our major partner — an influential organisation boasting wonderful contacts among the political and economic elite of Germany, with experience of working in our region. In addition, we’re liaising with the Association of German Chambers of Industry and Commerce and the German Economic Office in Belarus. The Federal Ministry of Economics and Technology is our official partner from the German Government. In Frankfurt, organisational issues are being managed by Maleki Conferences GmbH, which has been organising Euro Finance Week for the past twenty years, gaining a perfect reputation.
All these factors should create a bright framework for the successful organisation of the Belarusian Investment Forum.
Who is taking part on the German side? Are they well known, reliable partners or are we seeing new faces? Which areas of co-operation are of most interest to them?
The Forum in Frankfurt am Main is planned as an international scale event. We are not planning to limit the number of participants and don’t expect only to see well known faces. We’d like to see the participation of businessmen who are really interested in developing co-operation with Belarus and who will use the opportunity to discuss concrete projects.
Naturally, we’ll be glad to welcome those who’ve been successfully operating on our market for a long time and are ready to share their experience and proposals. Quite often, the positive responses of famous companies and corporations encourage new-comers in deciding how best to invest in a certain country. Apart from potential investors, we expect to see the heads of the Eastern Committee of the German Economy, the German Exchange, the German Union of Chambers of Industry and Commerce, famous banks, consulting and rating agencies and international economic organisations.
Among the themes which are of primary importance for Forum participants are investment conditions within the Belarusian economy, practical issues regarding the functioning of the Customs Union, the Government’s privatisation policy and wider use of renewable energy sources.
German companies are most interested in the promotion of their products to the East, while we are eager to set up new facilities, attracting German technologies and money. This union enables us to hope that strategic interests will coincide. German businessmen are expanding their sphere of economic influence, while we aim to fully realise our potential as a transit state, connecting the European Union with our partners within the Customs Union and CIS.
The Belarusian Investment Forum in Germany is taking place for the first time since the Customs Union of Belarus, Russia and Kazakhstan has come into existence. How is this new Union influencing the business plans of our German partners?
The Belarusian Investment Forum will answer this question. No doubt, the formation of the Customs Union has aroused true interest among German businessmen. Our Embassy has received dozens of inquiries regarding terms of delivery for ready-made products, parts and components, as well as terms governing the production and distribution of manufactures produced within the territory of a Customs Union member.
To fully inform businessmen about the Customs Union, conferences and round table discussions have been organised in Germany, with specialists from Belarus’ State Customs Committee attending, to answer the most complicated questions. German businessmen are extremely interested in problems relating to the mutual recognition of certificates and permissions and the customs documents needed to import goods into the Customs Union.
The development of modern logistical infrastructure is vital, so our German partners are delighted to hear about the construction of several dozen large logistical centres in Belarus. Giants such as German Railways and Lufthansa Airline are keen to help realise these projects.
No doubt, the simplification and speediness of customs clearance of cargo should enhance interest from Western businessmen, inspiring greater co-operation with our country. E-declaration and unification with European documents, as well as construction and modernisation of customs terminals along the Belarus-EU border and clear and professional work by customs officers, should also positively influence business activity with Customs Union states.
The idea of establishing a single customs space is also believed to be progressive. German businessmen are used to a lack of borders and customs barriers, in trading with their EU partners. Any action which simplifies such procedures and accelerates cargo movement is heartily welcome.
In order for participants of the Belarusian Investment Forum to receive answers to all their questions regarding the Customs Union, the Forum’s organisational committee has invited the Executive Secretary of the Customs Commission of the Customs Union of Belarus, Russia and Kazakhstan, Sergei Glaziev, to participate in the Frankfurt event.
Germany drives Europe’s energy security policy. Which aspects of this field are under focus at the Forum?
Since most European states depend on a relatively small number of suppliers of energy resources, the problem of energy security is ever more topical, as seen at the G8 and G20 summits, and at numerous conferences and symposiums.
The Bilateral Energy Forum plays an important role in Belarusian-German dialogue. Its second sitting took place on April 22nd, 2010, in Hanover. The major focus of energy-related dialogue is the enhancement of energy efficiency. The Germans justly view efficient energy consumption as the most promising path to energy security. In this respect, Belarus is keen to study and implement German experience regarding energy saving technologies, the production of new generation white goods (consuming less electricity)and the use of modern construction materials with improved heat insulation.
Another important step is finding sources of renewable energy. Being a European leader in sun, wind, biomass and gas power, Germany is ready to share its experience and modern technologies. Belarus is now building its own wind park and bio-gas facilities, while relying on the wider use of local fuels. This doesn’t contradict our desire to reduce our dependence on oil and gas. Our strategic goals are obvious: we wish to avoid reliance on a single provider, while reducing consumption of oil and pursuing sources of renewable energy. With this in mind, one of the sections of the Belarusian Investment Forum is dedicated to innovations in this field. We expect to see a keen exchange of opinions regarding major trends in alternative energy development. Possibilities for experience exchange and implementation of new developments in this field will be receiving our attention.
A law on alternative energy in Belarus, inspired by decades of German experience, is in the final stage of its adoption. It is hoped that it will be approved by the House of Representatives’ deputies during the autumn session.
Apart from this, in my view, Belarusian participants of the Forum will be interested in the financial issue. It’s no secret that the prime cost of an energy unit generated from renewable sources is much higher than that produced from natural gas. We can learn from German experience regarding the state’s guaranteed purchase of all energy generated by solar, wind and bio-gas facilities, while taxing companies which offer cheaper nuclear energy at a higher rate.
What results are you expecting from the Forum in Frankfurt am Main?
The Forum’s major task is to present Belarus during Euro Finance Week, as a unique place for foreign investments. With this in mind, the active participation of potential investors from Germany and other EU and global states would be the most significant result for us. We hope to enhance interest in our country among businessmen who have previously disregarded Belarus as a promising partner (for various reasons, including following established stereotypes). We’d like to show our production potential, our reliability and our stability to the global business community, alongside our professional business attitude and guaranteed protection of foreign investments.
Naturally, we well understand the psychology of European investors, who tend to conduct thorough analysis of the situation before making a decision. They ask for the opinions of independent auditors and famous consulting companies, while visiting potential sites. Only then do negotiations take place. The Forum primarily aims to encourage them towards this step. We’ll openly and honestly explain how our country has created the necessary framework for investment activity. We’ll report on the recently established National Investment and Privatisation Agency, showing how it will become a reliable partner for new investors as they enter the Belarusian market. It aims to help solve all issues facing those setting up new businesses.
New possibilities are opening up to investors wishing to work in Belarus and within the Customs Union and we want to make these known. Meanwhile, we want to hear the opinion of our partners — present and potential — regarding Belarus’ investment climate. It would be wrong to expect the signing of large investment contracts with new partners during the Forum. However, we won’t object to seeing well-known partners prepare new agreements. We’re expecting a detailed exchange of opinions, substantial discussion and the establishment of new contacts, as well as the development of existing ties.
Welcome to the Belarusian Invest-ment Forum in Frankfurt am Main!
Thank you for the interview!
By Nina Romanova