A Stable, Open, Investor Friendly Economy with Significant Competitive Advantages

Andrei Kobyakov, Prime Minister
Andrei Kobyakov, Prime Minister

“The main purpose of the Belarus-EU Forum is to create an effective and results-oriented multi-level platform for the establishment of sustainable cooperation between Belarusian and EU financial institutions and business entities”, Belarusian Prime Minister Andrei Kobyakov highlights, adding that Belarus’s position within the global context should not be underestimated. Pointing out that the Government’s main mission is the implementation of balanced, peaceful and open multi-vector policy, as well as building constructive relations with existing and potential investors, he discusses achievements, priorities, and the country’s competitive advantages.

European Times: What are your priorities as Prime Minister of Belarus?

Andrei Kobyakov: As the Prime Minister of Belarus, my work is focused on five primary areas: investments, export, ICT, employment and youth. Within the framework of our National Program for Social and Economic Development for 2016-2020, we aim to foster growth and implementation of new technologies in each sector, thus contributing to the economic growth of our country.

In recent years, Belarus has established foundations for development in fundamentally new directions – nuclear energy, aerospace, biotechnology and other industries. Transitioning towards green technologies and a knowledge economy is one of the main priorities on our agenda. The Government of Belarus is maximally focused on strengthening the relations with our current strategic partners and attracting new strategic partners and investors.

The most important condition for growth is achieving macroeconomic balance and stability of the financial system. An integral part of this process is proper communication and coordination between the Government and the National Bank on macroeconomic and monetary policies, as well as increasing the availability of resources for the real sector of the economy. Furthermore, we continue our systematic work on improving the efficiency of the budget spending and our key for success is proper management of efforts and resources. The state support is now oriented only on effective projects which have passed the strict selection process and are in line with the program for socio-economic development of the country.

Moreover, among our priorities is investing in infrastructure; at least 80 major investment projects worth over US$27 billion are planned until 2020. In addition, the Belarusian Nuclear Power Plant, which will create more than 2.000 new jobs, will also improve the competitiveness of all sectors of the economy: industry, transport, services by providing cheaper energy.

Among our most important priorities is the export of goods and services. Belarusian companies have a lot to offer to its foreign partners, and we are actively engaging in new markets, without forsaking the traditional markets.

European Times: How would you describe Belarus’s economy?

Andrei Kobyakov: Belarus is a country with an open economy. The volume of foreign trade turnover of the country is 25% higher than the GDP and the ratio between the exports of goods and services and the GDP is over 60%.

Belarus does not qualify as a country rich in resources; we do not have large reserves of oil and gas. Nevertheless, our economy is growing with the development of industrial, agricultural and construction systems and the dynamically developing sector of high-intelligence service. Industry has been and will remain as the “locomotive” of the national economy, the basis of its development and our economic independence and security. Its development is largely determined by the basic economic trends, but the industry sector is responsible for 25% of the GDP and employs one in every four people. Furthermore, the ICT sector has recorded a significant growth, surpassing US$1 billion in exports in 2016. Belarus is one of the world leaders in the export of ICT services per capita; among the top 100 best outsourcing companies in the world for 2017, six are IT companies from Belgium, including Viber and World of Tanks.

The private sector plays an increasing role in our economy. Belarus is among the top 40 countries in the world for doing business, which is confirmed by the World Bank’s Doing Business Report for 2017, which has ranked the country on the 37th position, before Russian Federation, Cyprus, Luxembourg, Italy, Israel, Belgium and many other countries.

Moreover, we have implemented a model of social market economy, which has proved worthy and effective. The main wealth and the highest value of the country lies in its people. According to UN reports, Belarus is in the group of countries with high human resource development, ahead of countries such as Turkey, Bulgaria, Serbia, Kazakhstan, Ukraine and others.

The sustainable development of our economy is based on innovation, effective use of the available national resources and the competitive advantages of the country.

European Times: Which companies have made the greatest contribution to the development of the Belarusian economy?

Andrei Kobyakov: Belarus is renowned for the production of various major industrial products: vehicles, machinery and equipment, petrochemicals, food and building materials, etc. Approximately every tenth tractor in the world is made in Belarus. We are sixth in the world when it comes to potash fertilizers and we are among the top five exporters of dairy products. In 2016, Belarus was ranked as the fourth largest exporter of cheese and the third largest exporter of milk serum and oil, outrunning USA and Australia.

If we talk specifically about the enterprises, based on their share in the total industrial production, among the best performers that should be mentioned are the Mozyrskiy Oil Refinery, Naftan, Belaruspotash, Grodno Azot, Minsk Tractor Plant, and holdings such as the Belarusian Metallurgical Company, BelavtoMAZ and BelAZ Holding.

European Times: How would you describe the relationship between Belarus and the EU?

Andrei Kobyakov: The EU is a very advantageous partner for Belarus – it is the second most important market for Belarusian goods, the primary source of investments, technologies and equipment. Even when our political dialogue stagnated, the trade did not decrease; on the contrary, it increased. According to Eurostat, trade between Belarus and the EU tripled in the past 13 years; Belarusian exports to the EU increased 2,5 times. This became possible due to the large-scale state investments in re-equipment of local enterprises and improvement of the logistics infrastructure.Belarus is one of the few post-Soviet states that does not rely on foodstuff as its main export to the EU, but also sells important quantities of technological equipment and machinery such as tractors and trucks as well as petrochemicals, electronics etc. For reasons of sustainability we seek to ensure that our exports to the EU account for at least one third of the overall volume.

Now that all politically motivated barriers on the EU side are lifted, our relations are becoming much more intense, trustful and structured. The European Investment Bank and the European Bank for Reconstruction and Development have started full-fledged cooperation with our country. The Belarus – EU Coordination Group acts as a steering body for bilateral relations. Minsk and Brussels negotiate the so-called ‘Partnership Priorities’, which are to guide their cooperation in 2017-2020. Belarus and the EU engage in sectoral dialogues on such important topics as trade, customs, economy and finance and environment. The Western dimension of our foreign policy focuses on creating a modern contractual framework with the EU and accession to the WTO. This would contribute to a still deeper integration of our country into the political and economic cooperation in Europe and globally. Belarus is committed to engaging with the EU in the spirit of good neighbourhood in order to jointly address common challenges and strengthen stability, security and prosperity in our region.

As a testimony of the growing trust and pragmatism in the Belarus-EU relations, yearly joint economic forums have become a good tradition. Last year, together with the European Commission, we organized the first such forum in Vienna, and this year Luxembourg will host another one.

European Times: Why should European investors choose Belarus as their investment destination?

Andrei Kobyakov: Due to its favourable geographical position, despite the lack of access to sea, Belarus serves as one of the most important transport and trade corridors between Europe and the CIS. Our country has excellent competitive advantages, such as its direct access to the market of the EAEU, with a total population of 170 million people. Other competitive advantages include a stable political and social situation, well-developed transportation and logistics infrastructure, highly educated workforce, low crime rate, etc.

Belarus has investor-friendly legal framework; investor receive state guarantees of protection of their investments and other various benefits and preferences. A simple and comprehensive system of interaction with investors was implemented and the National Investment and Privatization Agency is ready to assist in every regard. Currently there are 419 operational contracts amounting to US$19.6 billion, which employ more than 123.500 people.

Furthermore, particular attention is dedicated to attracting investments in small and medium-sized cities and rural areas, as well as the free economic zones, such as the Chinese-Belarusian industrial high-tech park ‘Great Stone’.

European Times: What initiatives are taken by governments to support the development of the country?

Andrei Kobyakov: Key initiatives of the government’s medium-term plan are accumulated in the key policy documents, primarily the above-mentioned program of socio-economic development of Belarus for 2016-2020 years and the Government’s program until 2020.

First of all, in order to enhance the conditions of doing business, we implemented a set of measures and instruments aimed at supporting fair competition, stimulating the creation of new industries and jobs, the development of the private sector and public-private partnerships, etc. Secondly, we focused on introducing best practices of corporate governance; we are currently working on eliminating legal barriers to enable the privatization of small and medium-sized state companies and attract investments. Thirdly, we are expanding opportunities for businesses to access financial resources. The financial market will provide new sources of financing – corporate bonds, project financing, placement of shares on international stock exchanges, etc. Fourthly, we are working on improving investment laws following the best international standards.

The Development Bank of the Republic of Belarus is an institution created at the initiative of the Government, to support the priorities of development of the national economy. Through this bank, investors may secure long-term favourable loans for the implementation of cost-effective investment projects.

European Times: What is your vision for the future Belarus?

Andrei Kobyakov: Belarus is an independent, stable, highly efficient country in all its dimensions. In the future, I perceive Belarus as a country whose economy has reached a qualitatively new level, primarily due to the rapid development of innovation. A country with a modernized industry, infrastructure and legal framework, competitive on the global market and with stable export levels based on the equal distribution between three markets: the EAEU, the EU and the ‘far arc’ countries.

I perceive Belarus as an IT-country, supplier of advanced technology, taking its rightful place in the world in the beginning of the fourth industrial revolution and the rapidly developing biotechnology and nanotechnology industry. Furthermore, I envision Belarus as a country that has achieved energy security through diversification, with its own nuclear energy and advanced development of alternative energy sources and energy-saving technologies. A country that has not only maintained its own food security, but is also exporting and further developing the agricultural sector by integrating latest technologies and developing agro-cities. Moreover, as a country with social equity and powerful social platform, providing every citizen with security guarantees, including high-level education, effective employment, and medical coverage using the latest international standards, but also a competitive environment, access to resources, a developed infrastructure and a system of guarantees of property rights as preconditions for doing business.

On the international arena, I see Belarus as a regional and global force with positive and respectful relations with its partners and a balanced, peaceful and open multi-vector policy.

European Times: What is your personal message?

Andrei Kobyakov: I invite everyone to visit Belarus, to get acquainted with our hospitable country; a short visit of up to five days does not require a visa. Belarus is modern country,with a dynamic economy, low unemployment, favourable investment and tax climate, good infrastructure and other competitive advantages. We are open to foreign investments, mutual collaboration and cooperation and we welcome the most advanced forms of investment, from the establishment of foreign mixed enterprises to concession agreements and the integration of transnational corporations.I hope that investors will make the right choice in favour of Belarus and that they will appreciate the prospects of mutually beneficial cooperation.