To advance, it’s necessary to run faster than time
[b]In the USSR, Belarus was called an ‘assembly’ or a ‘processing workshop’, and many of the produced goods were well-known brands. These include ‘Belarus’ tractors, MAZ trucks, Horizont TV sets, Stolichnye candies and Borodinsky bread. We’ve managed to preserve them. However, over more than twenty years of independence, completely new areas of development and points of growth appeared, and these can drastically change the views about our state. [/b]
Belarus lacks its own oil, natural gas and other valuable natural resources, but boasts a branch which annually generates over $2bn of exports: agriculture. Much attention has been paid to agricultural development and the construction of agro-towns (as dreamt of by USSR Party leader Nikita Khrushchev). This has eroded the gap between standards of living in cities and villages; moreover, agricultural machinery production has contributed to our success. At present, only Ukraine (known for its famous black soil) and Kazakhstan (with its virgin lands) produce greater grain harvests per capita than Belarus; the best years have seen us collect up to one tonne per head.
As regards milk, no former Soviet republic would question our absolute leadership. Belarus even occupies fourth place worldwide in terms of milk production, thanks not only to our favourable climate but to modern, computerised dairy farms being built in almost every one of our 118 districts: in line with a Presidential decree. In addition, powerful new machinery has been supplied to farms on privileged terms, as have complex fertilisers (enriched with micro-elements).
The experiment of transferring traditionally-run state farms into the hands of larger processing and industrial companies has demonstrated bright results. Famous perfumery-cosmetics company Vitex JSC is one such, having gained ownership of a state farm in the Uzda District (45km from Minsk) a decade ago; it now owns 40 cottages, an automated farm and high-tech fruit-storage facilities. Moreover, the company is shifting its major production facilities to this location, with only warehouses remaining in the city.
Large milk volumes have brought modern processing, enabling Belarusian milk companies to rival European counterparts, using the same equipment and producing the same range. This year, Savushkin Product JSC — our largest dairy enterprise — is the first in Belarus and the CIS to receive a certificate of access to the European market, confirming the top quality of Belarusian milk products.
The software industry is becoming a driving force for Belarusian economic transformation, with the High-Tech Park alone exporting $500m of software (a direct result of tax privileges granted to Park residents). According to the National Statistical Committee, IT specialists’ wages currently exceed $12.7m: an average of $1,300 monthly (in equivalent) — against the national average of just over $500. Such large sums are due to specialists working directly for the Western market, since modern technologies allow some production to shift from Europe and the USA to Belarus. Of course, competition is growing and our rivals are never far behind. Saying this, the ‘hindu code’ (‘glitch code’) is the common reference for shoddy work in the IT sphere, although prices offered by rivalling firms are certainly cheaper than in Europe. Naturally, customers seek value for money.
Since Soviet times, Belarus has preserved a strong system of fundamental technical education: an area in which we can continue to excel, with state support of specialists’ training in the sci-tech sphere. Maths, physics and economics, as well as software development, are vital components of a technical education and there’s no doubt that demand will only grow, if innovations can find commercial application.
Economy of knowledge
Our most vital resource is the education of our citizens, fulfilling our ultimate human potential. Belarus already occupies 45th place among 146 countries in the Knowledge Index (the ability to generate, accept and spread scientific knowledge). Meanwhile, it has risen to 50th position (from 73rd) for its efficient use of scientific knowledge in economic growth. According to the World Intellectual Property Organisation, our country is ranked 6th globally for the number of applications to patent inventions: behind only Korea, Japan, China, Germany and the USA.
Our course, funds are needed to implement inventions, with only one percent of Belarusian GDP currently originating from the sci-tech sphere. To move this forward, private investment is sought and an innovative fund has been established. Around 85 percent of domestic science-related funding is being focused on economic application of innovations, with the aim of generating income. Interestingly, 24.8 percent of organisations in Belarus are focused on innovative activity, while the share of science-intensive and high-tech exports tripled this year against 2011 — reaching $10.8bn (accounting for 20 percent of all Belarusian exports).
The country has achieved much success in bio-technology development; over the past 18 months, such production has brought in revenue in excess of $1bn: $87 per capita (against $183 in the EU and $6.10 in Russia). Belarus leads in manipulating genetic codes, to create new products and organisms, including through hybridisation. The National Academy of Sciences’ Microbiology Institute has joined the Russian Academy of Sciences’ Cytology Institute in developing collections of human and animal cells, each with a ‘passport’, which can be used to diagnose and control specific infection. In addition, our scientists have joined the Russian Academy of Agricultural Sciences’ Scientific-Research Institute of Agricultural Microbiology in developing multi-functional high-yield microbe fertilisers. In addition, genetic markers for identifying barley varieties are being prepared jointly with the Scientific-Research Institute of Plant Growing.
On July 22nd, 2012, a Belarusian satellite was successfully launched from Baikonur — enabling us to join the ranks of ‘global space states’. It took 2,764 seconds for Soyuz-FG (and the Fregat upper-state rocket) to travel 520km, reaching orbit, where it should remain for five years. Our 400kg spacecraft boasts supreme dynamics, being highly manoeuvrable — able to change its orbit position to shoot from a certain angle (with 2m resolution). Over half of all geodesy and cartography works require space photography, with data used by forestry and agriculture, as well as the Ministry of Natural Resources and Environmental Protection and the Ministry of Emergency Situations. Viktor Zaznov, the Scientific Secretary of the National Academy of Sciences’ Geo-information Systems, believes a communication satellite should be soon launched but that the existing Belarusian spacecraft is valuable, having brought our own flight management centre (able to supervise an orbital group of satellites). Belarus now enjoys a new economic branch, overseeing space possibilities to the state’s benefit. The satellite also opens prospects for international co-operation in the information and military-industrial spheres.
On October 29th, 2013, the World Bank published its 2014 Doing Business report, analysing legislation governing small and medium-sized companies. Belarus occupies 63rd place among 189 countries, improving its position by one point. Among the former Soviet republics, Georgia and the Baltic States are ahead of us, while Russia occupies 92nd place and Ukraine 112th.
Simplified property registration procedures have much contributed to Belarus being ranked 3rd in the world in this sphere. In addition, we are progressing in the rankings for ease of business ‘start-up’: dealing with such issues as construction permits and enforcing contracts. As regards ease of paying taxes, Belarus is ranked 133th worldwide; however, our Ministry of Taxes and Duties plans to significantly improve on this next year.
At present, taxpayers enjoy access to e-services; over 130,000 companies are using e-declaration. Amendments have been introduced to the Tax Code, bringing accounting and tax registration closer, while profit tax is now easier to calculate. The state has been liaising with major developers of accounting systems, aiming to allow submission of e-declaration to the Ministry of Taxes and Duties directly from accounting registration systems. Several restrictions on tax deductions have been annulled and the obligation to submit documents (confirming privileges) jointly with accounting reports to a tax agency has been lifted; such documents are now studied within tax inspections.
The Ministry of Taxes and Duties has conducted anonymous polls among Minsk firms (employing 10-100 people) three times now. Time spent on profit tax administration, VAT and social payments reached 341 hours a year on average in 2010, 205 hours in 2011 and just 135 hours in 2012. Belarusian tax legislation is ever improving and being simplified, helping small and medium-sized businesses to operate efficiently.
By Aelita Syulzhina