Recovery from recession to open new diverse possibilities
By Mikhail Semenov
Belarus’ key factors of investment attractiveness are known to all: its profitable geographic position and well trained staff. Moreover, the country leads among its neighbours, rivalling many European states in terms of its educational level. Meanwhile, its ‘Doing Business’ rating indicates its low level of bureaucracy and corruption. No doubt, these all stand high in the eyes of investors.
At present, Russia, the UK, Germany, Switzerland, Austria and Cyprus are Belarus’ major investors. Moreover, partnership in the development of potassium salt deposits is being negotiated with Luxembourg businessmen. Ukraine is ready to build a new confectionery factory in Belarus, while American and Polish investors are interested in building a sugar plant. An industrial district will soon be constructed in the Brest Region, jointly with the Italians. In 2005, the country received just over $450m of investments; by 2010, this had risen to $5.5bn. In the first three months of 2011 alone, investors injected almost $3bn.
Some difficulties are also evident. “Of course, investments are arriving into the country,” notes Candidate of Economic Sciences Vladimir Poplyko, an associate professor at the Belarusian State Economic University. “However, there is another side, which we must acknowledge: foreign investments are not a cure-all. We can find money from our citizens as well; importantly, we need to decide where funds should be injected.”
Economists say that foreign investments worldwide should return to pre-crisis level within one year. Not long ago, the UN Conference on Trade and Development presented its annual investment review; it stated that, last year, direct foreign investments worldwide rose by 5 percent. Experts have calculated that investments still lag behind global industrial production and trade, which have already reached pre-crisis levels. Belarus’ Economy Ministry tells us that our country is registering increasing figures, recovering from recession (when investments in 2009 outstripped those of 2010). “Belarus has concluded over 700 agreements,” notes the Head of the Main Directorate for Investments at the Economy Ministry, Kirill Koroteev. “Of course, the investments which they envisage won’t just be arriving this year; they’ll cover the next few years. The anticipated sum should exceed $15bn.”
Those wishing to invest in Belarus gain financially. However, there are some other important aspects. We cannot ignore the geopolitical factor, such as that regarding our economic relations with the Czech Republic. “Energy and machine building form the basis for the Czech economy; accordingly, their businesses are keen to liaise with Belarus in these spheres,” explains the Ambassador Extraordinary and Plenipotentiary of Belarus to the Czech Republic, H.E. Mr. Vasily Markovich.
The recently established National Investment and Privatisation Agency aims to facilitate the inflow of foreign investments into the country, accompanying an investor from initial talks to their arrival in Belarus. In fact, investment agreements have a cumulative effect, as investors don’t just buy a package of assets; they inject money into production development. As a result, privatisation is a second form of investment attraction. “Investing money into property or housing construction is another efficient step in this direction,” stresses Mr. Poplyko. This year, the Economy Ministry plans to offer around 180 state run enterprises for sale and, as the State Property Committee informs, 2,007 disused property sites go on sale in 2011.