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NUmbeR ONe PRIORITY System-Based and ECONOMY OF BELARUS Aggressive Policy Foreign economic activity of Belarus in 2009 is carried out along the priority avenues Sergei MARTYNOV, Minister of Foreign Affairs of the Republic of Belarus the global economic crisis has radically changed the situation in international markets, including Belarus’ traditional sales markets. a serious fall in demand for our products, decline in our foreign partners’ paying capacity, problems with mutual payments caused by the volatility of the international financial system – the factors that we will have to confront in the foreseeable future. But the world economy has a sinusoid development pattern: each decline is inevitably followed by growth which opens up new opportunities. these opportunities will be available only for those who will manage to survive the hard times, without getting into panic, but working hard to lay the foundation for future development. zation, giving more freedom to and banking policy, stimulate the private initiative and removing labor market. bureaucratic impediments were Simultaneously with the liber- planned anyway, regardless of the alization measures, we are imple- situation in the world economy. menting a system of measures to The need for taking these deci- support the nation’s largest pro- Goals sions arose naturally from how ducers, the GDP-forming compa- T he Belarusian Ministry the country was developing. By nies, taking into consideration the of Foreign Affairs, other creating the best possible condi- record of anti-crisis measures in ministries as well as all tions for private business and for- Russia, Kazakhstan and the other Belarusian foreign economic eign investors in Belarus we hope CIS member states. These meas- actors face a particularly difficult to improve the national econo- ures aim to stimulate sales, pro- task: To feel the “pulse” of the my’s overall resilience to negative vide the nation’s real production world economy, to monitor markets influences, to make sure that ad- sector with the sufficient amount continuously in order to react ditional prerequisites are in place of credit resources, optimize pro- promptly to any opportunities that for successful economic develop- duction and sale costs. may arise. Only by re-channelling ment in the future. In 2009, Belarus’ international export flows, exploring new The Government has approved trade will be aligned with the Plan markets and perfecting methods the plan of urgent measures to of Measures Aimed at Implemen- of work in our traditional liberalize the conditions of eco- tation of the National Export De- markets we will manage not only nomic activity in 2009. The plan velopment Program. Financial to preserve our export potential is aimed at reducing the number support mechanisms involving but also to cement considerably of and simplifying the adminis- banks and insurance companies our positions in international trative procedures in transpor- will be perfected further. The na- markets. tation, transport oversight, for- tional budget 2009 provides for Of special importance are eign trade, business registration. offsetting the loss suffered by the measures aimed at liberalization There are plans to simplify the banks that issue privileged loans of the business climate in Belarus, tax and customs legislation, im- intended for production of export- which are now being implement- prove the price and anti-monop- oriented goods. ed. These are not purely anti-cri- oly regulation, investment activ- Certification and standardiza- sis measures. Economic liberali- ity, monetary and credit relations tion of products in accordance 14 NUmbeR ONe PRIORITY with international standards will be carried on, as well as the work on confirming the compliance of Belarusian goods with EU re- quirements and directives; and the work on implementing Eu- ropean standards at Belarusian companies. Given the instability in in- ternational markets, we see an increasing role of the commod- ity distribution network of our companies abroad. In 2009-2010, we plan to establish 118 new com- panies as part of the commodity distribution network. We are now considering the prospects of es- tablishing thirty-five factories to assemble our products abroad. Equally relevant is now substi- tution of imports with analogous domestic products. The share of imported assembly parts at some companies ranges from 40% to 70%. The Ministry of Foreign Affairs supports the proposal of the National Bank to develop a set of measures to reduce by 10% the share of import in the costs of production of industrial goods 19.2% and surpassed $10.5 billion. Naturally, it is an absolute Successful work of the joint in Belarus. The Plan of Measures At the same time, in Q4 2008 priority in this situation to de- company “Midea- Aimed at Implementation of the there was a reduction in our ex- velop Belarusian-Russian anti- Horizont” – ports to Russia, which caused con- crisis measures. On January 30, a joint project National Export Development Pro- of Belarusian gram provides for specific steps in cern. The supplies fell by $528.4 2009, in the course of a session of OAO Horizont this direction. million, accounting for 79% as the Council of Ministers of the and Chinese Midea Holding Co. against the previous year. Belarus-Russia Union State, the Russia The reasons behind the slow- countries signed a Plan of Joint Ltd. – in produc- tion of household down of Belarusian exports to Action of the Governments of appliances is a Speaking about the geography good example of of Belarus’ foreign economic Russia were the consequences of Belarus and Russia to minimize mutually beneficial activity in 2009, we should first the world crisis for the Russian the consequences of the financial cooperation of all mention the Russian Fe- economy: Russian banks’ morato- crisis, improve payment balance, deration, our most important rium on issuing loans, giving up business conditions and mutual trade and economic partner. In on leasing schemes of supplies trade. We have an adopted plan of 2008, Belarus-Russia trade was against the backdrop of decreas- measures to simplify transport of more than $34 billion, up 31.1% ing purchasing power in the wake goods and vehicles in the territory from 2007. Belarusian exports rose of the growing crisis. of the Union State. The plan pro- vides for gradual shifting of con- trol from the Belarusian-Russian border to the outer border of the Belarus-Russia Union State. The INVeSTmeNT PROJeCT implementation of this plan will mark an important step towards Construction of a hotel and entertainment complex, forming a common customs terri- and a museum of beer in the territory of the unitary affiliate tory of Belarus and Russia. enterprise “grodno Brewery”. Given the financial crisis, our countries are jointly solv- The project initiated by the unitary affiliate enterprise “Grodno Brewery”. ing the problem of non-payments 2 Zavodskaya Str., Grodno, 230025, Republic of Belarus. by increasingly using the Rus- Tel. (+375-152) 77-04-03, sian ruble in transactions. The Fax (+375-152) 72-39-21. Belarusian Government signed 15 NUmbeR ONe PRIORITY memorandums of understanding parts from more than 130 Russian Russian cooperation. The relations with the VTB Bank and the state manufacturers. At the same time, between Belarusian and Russian ECONOMY OF BELARUS corporation “Bank for Develop- MAZ supplies chassis to twenty regions have been expanding fast ment and Foreign Economic Af- Russian manufacturers of special- over the past years. In 2008, there fairs (Vnesheconombank)” and, purpose vehicles. was a steady growth in Belarusian in the quadrilateral format with Considering the significant exports to all federal districts of the bank “Société Générale”, “Ros- share of the energy sector in the Russia, to 68 out of 80 Russian re- Bank” and “BelRosBank”. Con- economies of Belarus and Russia, gions. centration of payments between it makes sense to channel our ef- Due to consistent efforts of businesses via a group of banks forts towards joint development both sides, we have managed to authorized by the two states will of promising projects, construc- expand the range and scale of co- help make sure the resources are tion of new and modernization of operation, make it more effective, used purposefully to support pro- active refineries in order to derive ensure stability and diversifica- ducers, make the use of the re- mutual benefits from trading in tion of Belarusian exports to Rus- sources more effective and ensure competitive goods in third coun- sian regions. mutual payments between export- tries. The Belarusian Government ers. The measures taken by Russia adopted a comprehensive system It is especially important today and Belarus to support their real of measures to boost Belarusian to maintain and expand the con- production sectors, to unblock exports to the regions of the Rus- tacts that have been established payments, expand cooperation sian Federation in 2009-2010, and between businesses of Belarus ties and widen opportunities for plans or urgent measures with and Russia. mutual supplies of goods means regard to federal districts. It is Belarus and Russia have had that there should be mutual guar- planned to use the intergovern- traditionally strong ties in auto- antees that no discriminatory mental mechanisms of interac- making. For example, to produce measures are imposed. tion with Russian regions that we tractors, the Minsk Tractor Plant Regional interaction is another have, to take measures to fulfil the purchases materials and assembly important aspect of Belarusian- agreements we have and develop Over 80% of seamless hot- rolled pipes manufactured by Belarusian Steel Works are exported 16 NUmbeR ONe PRIORITY new agreements, to continue the practice of visit exchanges. Europe The European Union remains another crucial trade and econom- ic partner of Belarus. In 2008, the trade between Brelarus and the EU countries reached $23 billion, up 36.3%, with Belarusian exports amounting to $14.4 billion, having risen by 36%. Belarusian had a $5.9 billion surplus in trade with the EU. Belarus and the EU are work- ing jointly to expand mutually beneficial cooperation in a range of economically relevant areas. We have Belarusian and EU ex- perts collaborating closely on en- ergy, transport, ecology, customs affairs and agriculture. Similar land 2 times. The work now in the world financial and economic Potash consultations are expected in progress to build on the results of crisis on our economies will bring fertilizers are one of economy and finance, standardi- the Belarusian Investment Forum positive results and ensure posi- the essential zation and healthcare. held in November 2008 in London tive trends in mutual trade. Simi- elements of Belarusian We pin certain hopes on Be- is aimed at increasing further the lar work in planned to be carried exports larus involvement in the new investment attractiveness of Be- out with the other CIS member initative “Eastern Partnership”. larus. states, too. Participation in it could open ad- We are still in the process of ditional opportunities for Belarus One More Priority searching for alternative ener- in modernization of the national The bilateral relations with gy sources, ways of integrating economy, providing access for Be- the countries of the Common- Belarus into new schemes of larusian goods to the EU market, wealth of Independent States oc- their transportation, including by implementing regional projects of cupy their traditionally important studying prospects of participa- priority importance, building up place in the system of foreign eco- tion of Belarusian companies in Belarus’ transport, logistical and nomic priorities of the Republic projects related to production and energy-transit capacity. of Belarus. transportation of energy from In 2009 we will do our best to In 2008, trade between Belarus Central Asia and the Caucasus. cement the positive trends in and the other CIS countries (Rus- trade with the European Union. sian Federation not included) hit Across the Pond We hope not just to expand the $62 billion, up 1.5 times, with Bela- When speaking about the re- presence of traditional Belaru- rusian exports amounting to $3.8 mote arc of Belarusian foreign sian exports in the EU market (oil billion. policy, Latin America, we should products, metal products, timber), At the same time, there has note that main efforts here are but to diversify our supplies with been a change in the political and aimed at expanding trade and eco- an emphasis on technology-inten- economic priorities of the CIS nomic cooperation, building up sive products. member states in recent years. and diversifying Belarusian ex- The Europeans show interest Certainly, it influences the multi- ports and its geography. in Belarus as in an optimal place lateral and bilateral relationships In 2008, trade between Belarus for locating their export-oriented in this region. The approaches and Latin American countries rose companies. Therefore special at- within the CIS to bilateral rela- 3.5 times from 2007 to $1.8 billion, tention should be paid to our par- tions are becoming increasingly with Belarusian exports increas- ticipation in internationalization pragmatic in their nature, being ing threefold to $1.1 billion. One of of foreign manufactures. based on specific national inter- the most important results of the System-based work on cement- ests and objectives. work on cementing Belarus’ ener- ing the positive trends is also nec- We hope that specific bilateral gy security was that Belarus start- essary with regard to investment. measures developed by Belarus ed oil production in Venezuela. In 2008, investment from Austria together with the Russian Federa- Giving today’s economic increased 1.6 times, from the Czech tion and Ukraine aimed at mini- trends, Venezuela is one of the Republic 1.8 times, from Switzer- mizing the negative impact of most promising markets in Latin 17 NUmbeR ONe PRIORITY America to export a wide range of Although trade with Brazil other meeting of the Belarusian- Belarusian-made vehicles, equip- looks quite impressive, over $1 Cuban joint commission for trade ECONOMY OF BELARUS ment and fertilizers. Due to a high billion, still 90% of is made up of and economic cooperation. The level of interstate relations, Be- mineral fertilizers. And the ca- plan of action adopted by the Be- larus and Venezuela started joint pacities of Brazilian agricultural larusian Government for 2008- large-scale investment projects in producers purchasing Belarusian 2009 provides for expanding trade oil production, petro-chemistry, fertilizers are weakening. In this with the Republic of Cuba to $100 seismic prospecting and seismic situation, we should focus on di- million. equipment, extension of natural versifying Belarusian exports to The afore-mentioned measures gas supply network, architecture Brazil and creating our own com- have had a positive effect on the and construction, industrial man- modity distribution network there, bilateral trade with Cuba. In 2008, ufacturing, agriculture and food. first of all for the Belarusian me- Belarus-Cuba trade increased 2.5 The work is now under way to chanical engineering industry. times and approached $50 million. build in Venezuela factories to as- The twofold growth in trade Belarus had a $20 million trade semble Belarusian quarry trucks, with Argentina in 2008 ($192 mil- surplus with Cuba. heavy vehicles, tractors, house- lion) made this country Belarus’ Considering today’s financial hold appliances. A Belarusian- third largest trade partner in Lat- and economic challenges, the em- Venezuelan joint company was in America. The practical result phasis should be placed on search- started to produce construction of the opening of the Gomselmash ing for new schemes of financing materials; another joint company Production Association in Argen- export and import transactions, was set up to construct infrastruc- tina was supplies of Gomselmash using mechanisms capable of en- ture and housing in Caracas. machinery to the Argentinean suring direct supplies and exclud- The strategic 2009 and middle- market. ing intermediaries. term objective in cooperation One of the major objectives We also bear in mind Cuba’s with Latin America is expansion in 2009 is to open an office of the interest in cooperation in science of cooperation with Venezuela in Belneftekhim concern in Buenos and technology, which can bring all areas. It is important that we Aires with a view to cementing economic benefits in the future. strengthen the political dialogue and expanding supplies of petro- In 2008, for the first time in at the top and high level, maintain chemical products to this country. the history of the bilateral rela- the rates of economic cooperation Cuba is another important tions, a high-level delegation from that we have achieved so far, and trade and economic partner of Mexico visited Belarus headed by give additional impetus to joint Belarus in this region. In March the deputy economy minister of projects. 2008, Havana played host to an- Mexico. Considering that Mexico S.M.Kirov Mogilev Automobile Works is the CIS largest manufacturer and supplier of vehicles for construction of roads, dams, tunnels and bridges, quarry and subterranean works 18 NUmbeR ONe PRIORITY COOPeRATION the companies under the authority of the Ministry of agriculture and Food of Belarus plan to expand the range of goods exported to the United arab emirates. Most promising are new export items: butter, dried fat-free and whole milk, tinned milk and technical casein. The amounts are to be specified in the near future. Belarus is well aware of the role the UAE plays in the Persian Gulf and is prepared to establish new trade contacts. The trade between has traditional partnership ties the full, as we have not been pay- ZAO Atlant with the United States, and 80% ing enough attention to coopera- household the two countries in 2008 reached appliances are $19.2 million, almost three time more of all foreign economic contacts tion with them until now. ever popular than in 2005. Supplies of Belarusian are bound for the U.S., the signing China remains a priority for among foreign consumers. The food (mostly dried milk) accounted for of Belarus-Mexico agreements on us. Cooperation with China has company exports a small share of Belarusian exports to mutual protection of investment stepped up onto a higher level, over 70% of its and cooperation between the econ- with multi-million investment output the UAE. The bulk of the export was made up of industrial products. Today omy ministries can be viewed as a projects emerging, which suc- both states have common interest crucial and far-reaching result. cessful implementation will help in expanding supplies of Belarusian It is also noteworthy to mention the Belarusian economy make a food. the singing in December 2008 of breakthrough in quality. Today, an agreement on cooperation be- jointly with our Chinese partners, tween the chambers of commerce we are implementing projects on *** of Belarus and Columbia. In 2008, modernisation of the cement and trade between Belarus and Colum- energy industries of Belarus, a the Carlsberg concern bia amounted to $85 million. number of joint projects in the aS (denmark) invested manufacturing industry. In 2008, around €20 million Asia, Africa Belarus-China trade surpassed in oao olivaria Brewery Asia and Africa are no less the $2 billion mark. We hope the promising an area of diversifica- growth trend will remain in place over the past several years. tion of Belarusian export. Many in the future, as will the tendency markets of this region are still only towards interpenetration of our The Belarusian company about to be explored by Belarusian economies. utilized these funds to modernize producers, including with strenu- Some countries of this region the production facilities and now is ous assistance on the part of the are of great interest to Belarus channelling them predominantly in Ministry of Foreign Affairs. from the point of view of their marketing to boost sales. In the near future, we will be investment opportunities. Coop- The Danish company is intensifying our work on practical erating with the UAE, Oman and responsible for staffing Olivaria with fulfillment of the top-level agree- Libya, we are focusing on imple- highly professional personnel. All the ments reached in the past years menting joint projects, including marketing tools now used at Olivaria with China, Vietnam, India, Lib- in third countries. We are also have proved their effectiveness earlier ya, United Arab Emirates. None working on organizing supplies when applied for Carlsberg. of the projects should be stopped, of Belarusian products to the de- In 2008, OAO Olivaria Brewery we cannot silently wait for a initi- veloping and less developed coun- was Belarus’ second largest beer ative of a foreign partner or blame tries as part of the state and gov- producer with a 18.4% share of the the world financial crisis. We will ernment programs of assistance market, the first one being OAO be utilizing our potential with Ja- on the part of donor states, like Krinitsa (38.4%). pan, Indonesia and Australia to Japan, for example. 19 bUSINeSS SHOT Vityas has started batch production of 15'', 26'' and 32'' LCD TV sets. Bundled with excellent technological characteristics and functional capabilities, the novelty boasts an environmentally friendly and stylish case made of wood. In the photo: Yuri Batkhan, engineer of Vityas’ marketing division, demonstrates new products.
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