Economic Potential in Belarus

1.Belarus has always had a relatively well-developed industrial base; it has retained this industrial base following the break-up of the U.S.S.R.

Recently, the Belarusian economy has shifted into sustained high gear. GDP grew by 10% in 2008. According to the UN World Economic Situation and Prospects 2006 Report Belarus registers major economic growth: GDP growth rate as low as 3% in 1999 showed 11% (2-nd place in CIS) in 2004 and 8,5% (4-th place after Azerbaijan and Kazakhstan - oil and gas exporters) in 2005. In terms of GDP growth rate Belarus also outperforms neighboring Poland, Latvia and Lithuania.

2. The Belarusian labour market is highly regulated. The decision to determine wages is left to firms, but the government can affect the structure of wages through the so-called tariff system, a type of centrally determined wage grid. The tariff system is binding in the budget sector, including enterprises and organizations mainly financed and subsidized within the state and/or the local budgets.

3.Although not rich in minerals, Belarus has been found to have deposits of clay, sand, chalk, dolomite, phosphorite, and rock and potassium salt. Peat, the country's most valuable mineral resource, is used for fuel and fertilizer and in the chemical industry. Forests cover about a third of the land, and lumbering is an important occupation. Oil deposits on the territory of Belarus are located in a single oil and gas basin, the Pripyat depression, which covers approximately 30,000 km2. All the activities related to prospecting, exploration and production of oil in the country are carried out by the government-controlled concern “Belneftekhim” via its subsidiary and the unitary republic enterprise “Belorusneft”. Belorusneft exports about 50% of its oil output.

4.Today, Belarus specializes in many industries which contribute to the development of the national economy:Heavy engineering industry (metal-cutting machine tools, tractors, trucks, earthmovers, and motorcycles), Chemical industry (chemical fibers, fertilizers), Light industry (textiles, garment, leather, and footwear, optical instruments and devices), Food processingindustry, Electronic and computer industry, Forestry and agriculture (timber, furniture; livestock and crops), Electrical household appliances (radios and televisions, refrigerators and kitchen stoves).

Key industries in the Republic of Belarus

Heavy engineering industry

5. ‘MAZ’ manufactures trailer tracks, dump trucks, trucks for transporting logs and pipes. The products of ‘BelAZ’ are designed specifically for mining in open quarries. ‘MoAZ’ specializes in highway construction machines and agricultural machines.

Chemical industry

6.Belarus has perhaps the most modernized and powerful chemical industry among the FSU states besides Russia specializing first of all in the processing of oil products, synthetic polymers, mineral fertilizers, pharmaceutics and household chemical products.Belarus is the world biggest supplier of potassium mineral fertilizers - the only mineral resource met in abundance in our land. "BelarusKali" is the world's largest potassium fertilizer manufacturer.

Agriculture

7.Belarus has always specialized in agricultural production though the massive nuclear accident (April 26, 1986) at the Chernobyl nuclear power plant, across the border in the Ukraine, had a devastating effect on agricultural and forestry sector. Belarus absorbed the bulk of the radioactive fallout from the explosion and purified most of the territory. Though, one can observe abandoned land which still remains to be unemployed and unoccupied. Despite the Chernobyl catastrophe, Belarus is a net exporter of meat, milk, eggs, flour, and potatoes to other former Soviet republics, although its exports are routinely tested for radioactive contamination.

Belarus can be divided into three agricultural regions: north (flax, fodder, grasses, and cattle), central (potatoes and pigs), and south (pasture land, hemp, and cattle). Belarus' cool climate and dense soils are well suited to fodder crops and temperate-zone crops (wheat, barley, oats, buckwheat, potatoes, flax, and sugar beets). Belarus' soils are generally fertile, especially in the river valleys, except in the southern marshy regions.

Subsidization of agricultural sector in Belarus amounts to 1-2 percent of GDP in the form of direct government credits, advanced payments for realization of state orders of major crops, at strongly negative interest rates. Today, a state budget fund, Agriculture Support Fund, provides funds and financial aid to compensate food producers for the costs of inputs (fertilizers and equipment). The Central Bank of Belarus issues subsidized credits to the agriculture sector at an interest rate of half the refinance rate. Privately run farms and private plots produce more than 40 percent of gross output.
Banking

8.Several commercial banks Agroprombank (agricultural sector), Promstroibank (industrial sector), Vneshekonombank (foreign trade), and Belarusbank (savings bank) and two universal banks (Priorbank and Belbusinessbank) dominate the banking system. These banks account for over 80 percent of the banking system outstanding loans, over 70 percent of domestic currency deposits, and all the NBB's refinancing credit. Commercial banks act as agents of the central bank distributing state financial resources. The Central Bank of Belarus fulfills mostly technical functions.

Light industry

9.Currently, nearly 500 enterprises manufacturing over 5 thousand product lines operate in the consumer goods industry. The largest sector’s businesses producing nearly 80% of the sectoral output is incorporated in the Bellegprom Concern - a multisectoral production complex of Belarus comprising textile, knitting, garment, leather, footwear, fur and small ware subsectors, nearly 200 textile enterprises produce diverse fabrics, yarn and various curtain and lace products. New techniques of manufacturing textile and knitted materials based on novel textile raw materials with improved hygienic properties are to be further implemented in the future to substitute imported cotton yarn and wool. The enterprises having capacities to upgrade the products quality over the entire processing chain from the input to the output of finished goods are the focus of attention in improving the performance of the consumer goods industry. Special attention is paid to the development of flax processing business.

Tourism

10. Belarus is a country with ancient and rich history and unique culture. The tourist market is still an embryo of the Belarusian economy.

Ecotourism is a fast growing area in Belarus. Picturesque landscape of forest, blue spread of lakes and river valleys, meadows and marshes favour the resort infrastructure development and encourages different types and forms of tourism. For the nature lovers it offers the simple pleasures of hunting and fishing, facilitated excursions and tourist routes, ornithology routes in the environmentally clean regions. The most loved one goes through the forested hills and lowlands hollows and winds between the unique lakes of the Blue Lakes natural ecosystem. A downhill and ski resort ‘Silichy” is available in winter for adventure and activity holidays.

World Heritage Committee session, held in Durban (South Africa) approved the addition of the Architectural, Residential and Cultural Complex of the Radziwill Family at Nesvizh into the World Heritage List. The castle in Mir was also included in this list. Now, the Radziwill Palace stands alongside the Great Wall of China, the Roman Coliseum and the Giza Pyramids. In 2006 The Belarusian Government established free tourist zones in Belarus.

11.An extensive range of actions are aimed at engineering, technological, institutional and information development of Belarusian enterprises. Implementation of innovative technologies and economy modernization, promotion of marketing activity and advertising, the reduction in material and energy intensity of the production, improvement of the business competitiveness are the main priorities of the economic policy at the current stage.

* There are many abbreviations (contracted forms of words) used in the text: CIS; UN; FSU; GDP; NBB; USSR. Use a dictionary to find out the meaning of them.