Room for initiatives
[b]Klaipeda recently hosted the 9th International Belarusian-Lithuanian Economic Forum: a starting point for our neighbouring states’ bilateral initiatives. Substantial dialogue between Belarusian and Lithuanian business communities is promoting further talks, as noted by Belarus’ Prime Minister, Mikhail Myasnikovich, who spoke at the Forum’s plenary session, on April 18th, 2013. His speech follows:[/b]
I welcome you to this high level forum on behalf of the Belarusian Government. It’s great that, here, in Klaipeda, we can jointly discuss topical issues of our bilateral co-operation and joint projects, trying to find a common response to the challenges of our turbulent world economy.
Lithuania is not just a neighbour and trading partner for Belarus. Belarusian sovereignty and independence share a single cradle with this country. Our common history, culture, traditions and mentality are a good basis for successful interaction in many spheres.
I’m thankful to Lithuanian businesses working in Belarus and to you — Mr.Dargis — personally, for organising this forum and inviting us. I’m also grateful to Prime Minister Mr. Butkevičius for his brilliant speech, delivered today. I highly appreciate all those who are friendly towards Belarus, speaking the language of partnership.
In building our bilateral relations, we proceed from the fact that Belarus and Lithuania are members of a single, large European family. We are linked by powerful economic and cultural ties and — importantly — unbreakable human contacts.
It’s our destiny: to live together and work jointly for the wellbeing our people, while preserving peace and tranquillity in this corner of our common European home. These are not abstract thoughts but the axiom of our life; we must be guided by them in thinking of our countries’ fates and our nations’ wellbeing.
In this respect, I’d like tospeak about the importance of trust and the development of mutually respectful dialogue, without which no integration or co-operation is possible. Our governments must create conditions for business activities — breaking false stereotypes and enabling potential partners to really assess the advantages of mutually beneficial co-operation.
Joint companies and projects will bring more profit than protectionism or isolation, as experience confirms. In Belarus, almost five hundred companies operate with Lithuanian capital; over the past five years, our bilateral turnover has exceeded $1.5bn — almost doubling. However, I think that businessmen would agree that our Belarusian-Lithuanian co-operation enjoys even greater potential. We’re only just approaching what’s possible, for our mutual benefit.
The agenda of our business dialogue includes many interesting projects in the field of machine building, wood processing, logistics, retail and agriculture. Importantly, most relate to high technologies and innovative solutions. The Belarusian economy is attractive in its science intensiveness and favourable conditions for business, with our Government relying on this to meet its economic policy goals.
Our country has opened its economy to foreign investors and to privatisation; these days, joint companies can be established at any state enterprise, with shares sold to strategic investors under clear and transparent rules. We are ready to apply the most advanced investment forms — such as the establishment of foreign or mixed companies and concession agreements. Your initiatives will receive attention, being studied for mutual benefit and conscientious partnership.
Belarus is using European legislation to guarantee the rights of investors, making it possible to incorporate British, Swiss, Italian and other rights in agreements — or arbitrage. Business registration procedures have been significantly simplified in Belarus; the process of market and innovative transformation is now irreversible.
Belarus’ tax on corporation profits is among the lowest in Europe: just 18 percent. Moreover, high-tech facilities are almost completely exempt from taxation. An encouraging taxation package is now introduced for investors, though such tax-related decisions were not easy for the Government. Austerity measures have been necessary but we’ve ensured budget consolidation. Belarus has enjoyed a debt-neutral budget for the past three years.
With this in mind, my point is that, in our modern world, the state determines economic growth, the creation of attractive conditions for investors and development of high-tech facilities. International integration is imperative. I want to emphasise that several spheres of Belarusian-Lithuanian business integration can contribute to our states’ economic development.
Firstly, transport and logistics offer a wonderful opportunity for closer Belarusian and Lithuanian capital co-operation, as well as the establishment of joint companies integrating Europe-Eurasia logistics. Unique possibilities are open to our countries if we make use of our geographical advantages, further capitalising on our transport-logistical sector.
As Europe’s geographical centre and gateway to the huge Customs Union of Belarus, Russia and Kazakhstan, Belarus could become the largest logistical hub in Central and Eastern Europe. This year, we’ll settle the issue of a single market for Belarusian, Russian and Kazakh transport services. Already, there are nine logistical centres countrywide, while another 40 projects are being realised. The first Belarusian-Lithuanian sites have been launched in the Minsk Region, with further work afoot.
This is a rich topic for our countries’ transport ministries, as it embraces a range of issues: tariffs, transit conditions, business integration and regulative practices. Yesterday, we discussed several possible infrastructure related projects (for Klaipeda State Sea Port) which are topical and promising. We’ll find solutions which follow principles of mutual benefit and partnership. I propose to establish a platform for transport and logistics as part of our Belarusian-Lithuanian business dialogue, involving ministries and business unions. I hope you — Mr. Prime Minister, Mr. Minister Sinkevičius and Mr.Chairman Dargis — will render support in realising this initiative.
Secondly, our countries enjoy industrial and agro-industrial business co-operation. In the first half of 2013, a facility will open in Lithuania to produce Belarusian Amkodor road-construction and communal machinery. Meanwhile, Lithuania’s Vakaru Medienos Grupe will launch wood processing production in Belarus. I’d like to thank you, Mr.Paulaskas, for choosing Belarus for the development of your business, as well as for the great job you are doing at the Lithuanian Business Council for Economic and Trade Co-operation with Belarus. I’m convinced that your speech at the Forum will help all those considering business projects in Belarus to make a correct and timely choice.
Last year, our mutual flow of investments totalled $250m: $170m was injected by Lithuania into Belarus and $80m was placed by Belarusians. We have real potential to double this figure in the coming two years if our two states and businesses can demonstrate co-ordinated work. It’s a good synergy format for our countries’ capital, which could create a solid basis for our economic growth, ensuring the creation of new jobs and the production of competitive products and services.
Financial co-operation is our third direction. At present, Belarus is actively developing instruments of financial leasing for its produce, as well asthe domestic market for inter-banking (following the European model), focusing on export credits. We view the Lithuanian banking sector with optimism, since it has managed to cope well with the challenges of the global crisis. Our countries have concluded all the necessary agreements to ensure fully-fledged financial collaboration. Belarus is ready to apply tied credit and leasing schemes on the Lithuanian market — jointly with Lithuanian partners — via the Development Bank of the Republic of Belarus. Our Government is using five schemes of export credit and invites Lithuanian colleagues to join.
The first envisages compensation (by the Belarusian budget) of a share of loan interest to non-resident banks providing loans to those buying Belarusian goods. This scheme has proven effective in the Russian Federation, liaising with Sberbank and VTB Bank, so we’re ready to expand it to the Lithuanian market.
The second scheme regards export credit for non-residents (such as Lithuanian buyers of Belarusian goods) and is provided by our banking system.
The third is international, involving the Belarusian Development Bank’s affiliate: Proma-groleasing. It’s ready to work with Lithuanian partners under international leasing schemes.
The fourth scheme envisages price discounts for those buying Belarusian goods with national bank loans or leasing agreements.
The fifth deals with tied state export loans, as being currentlyrealised in Belarus by the Development Bank. The work is large in scale with the period of credit lasting up to 5 years (2 years under privileged terms).
I propose that Lithuanian businesses use these instruments to develop mutually beneficial trading and credit co-operation.
As economic theory indicates, the best way to develop economic relations between states is to steadily move from pure trade towards investment — and further sci-tech (innovative) liaisons. We are approaching an entirely new level with Lithuania; our rapid growth of mutual trade is accompanied by a mutual flow of capital and new projects in the innovative sphere. Our countries certainly enjoy the necessary resources and potential.
Belarus is well recognised by world ratings: 45th position (out of 146 countries) in the World Bank’s Knowledge Index and 59th place in the Knowledge Economy Index. Meanwhile, we understand that it’s impossible to cope with global technological challenges alone; as Goethe wrote: ‘Science and art belong to the whole world’.
An intergovernmental agreement on science and technologies — concluded in 2008 — has enabled Belarus to set up a Belarusian-Lithuanian Innovative Centre, while launching joint financing for promising works. From 2011-2012, 19 joint sci-tech projects were realised in the fields of nano-technologies, genetics, lasers, ecology and the environment, micro-biology, medicine, energy and social and humanitarian sciences — worth over $500,000.
In 2013-2014, 14 new fundamental and applied sci-tech projects are planned, including detection of shale gas (rare in Belarus and Lithuania) and technologies to treat cancer and create new materials. Bio-technologies are another promising field, with Lithuania known as a leader in Eastern and Central Europe.
To date, 15 research bio-technology centres operate countrywide in Belarus — focusing on world level developments. In 2007, the first medical-pharmaceutical valley in the Baltic States was established in Vilnius. Moreover, the Republic of Belarus is establishing its own sci-tech park: Belbiograd. Within 18 months, we’ve created three dozen new, innovative production facilities in Belarus, aiming to generate goods worth hundreds of millions of US Dollars within two years. I invite our Lithuanian partners to co-operate with us, realising joint projects with Belarusian companies. We’ll offer financial support and extremely favourable conditions.
As regards IT, Lithuania is among the top EU states (per capita) in training such specialists while Belarus is second (behind India) in IT exports per capita. The Belarusian High-Tech Park is the largest of its kind in Central Europe, with seven of its resident-companies being among the prestigious Global Services top 100. Among its residents are firms from 50 countries and we are inviting Lithuanian businesses to join our High-Tech Park — particularly regarding experience exchange and staff training in this rapidly developing sphere.
Belarus and Lithuania share similar scientific priorities with regard to EU technological reform. I believe in the high level of our countries’ sci-tech potential and well-established ties, feeling confident that we can launch a new page in innovative co-operation. This collaboration will bring long-term profitability onboth sides.
Belarus consistently promotes open platforms and technological transfer within the EurAsEC, CIS and UN. Our initiatives are also present in our dialogue with the European Union (the Eastern Partnership).
Our country creates no problems for anyone in the world. We solve our issues of balanced development independently and our economic policy is focused on human interests. Belarus’ Jinni Coefficient — which characterises the concentration of income — is among the best in the EU and CIS: 0.284 against an average of 0.3 in the EU. Belarus has an open economy and, in 2012, our foreign trade in goods and services exceeded $100bn, with a GDP export quota (indicating an export-GDP ratio) of 85 percent.
We do not accept any political approach to issues of economic collaboration — not least because this affects our Single Economic Space partners. The SES is not an EU alternative for Belarus. Last year, our exports within the SES rose by 12 percent while the same growth was registered in sales to the EU. We also demonstrate a near equal volume of exports: $17bn with the SES and $17.5bn with the EU. With this in mind, the SES and the EU are equally important to us.
The President of Belarus has initiated the Integration of Integrations, creating a wide platform for co-operation and economic liaisons —from Vladivostok to Lisbon. This real Eurasian project is based on principles of free trade, non-discri-mination, mutual respect and constructive dialogue between nations across the continent.
In 2013 (when Lithuania chairs the EU), we should see additional possibilities for our Belarus-EU path, while significantly advancing in the normalisation of our relations. I’m convinced that this is the right path to take; sanctions, dictatorship and ultimatums have no prospects and must remain in the past.
We have a duty to pass our children the legacy of a strong state, with citizens at the centre of our nation. We can only achieve this by strengthening and developing multi-sided co-operation across our region. Belarus is ready and open for collaboration and dialogue with the European Union, following principles of mutual respect, benefit and partnership. We are ready to participate in international integration — via our industrial and intellectual potential. Your participation — Mr. Prime Minister — in this forum opens new possibilities for Belarusian-Lithuanian co-operation. I’m convinced that our dialogue will contribute to the further development of promising avenues of economic, scientific and cultural co-operation, via the realisation of joint projects. The Belarusian Government is creating comfortable conditions for their study and implementation.