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Doing business in Belarus

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This presentation is made by Katryna Bornukova. Presented during the Development Day conference 2019.

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Doing business in Belarus

  1. 1. Doing Business in Belarus Kateryna Bornukova, BEROC SITE Development Day Stockholm, 2019
  2. 2. Belarusians Mindset Shift § European Values Survey; higher score means more support for government ownership 2 3.0 3.5 4.0 4.5 5.0 5.5 6.0 2018 1999 2018 1999 2018 1999 Belarus EaP excl BelarusEU Do we need more government ownership? More private ownership More government ownership
  3. 3. Doing Business is Easier § Ease of Doing Business score improves (relative to the best practice of 100) § BEEPS-2018: Major obstacles are high taxes, access to finance, lack of qualified workforce – Surveys and indices do not reflect risks of criminal persecution 3 52 74.3 50 55 60 65 70 75 80 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
  4. 4. Private Sector Exists, Sizable 4 37.2% 30.6% 41.6% 47.3% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 2012 2015 2016 2017 2018 Commercial SOEs employment share Private sector employment share (upper bound)
  5. 5. Where Businesses Operate § 25% of manufacturing output is private – Food processing, textiles, wood processing – Hidden champions: instrument makers and other high- tech hardware – Value chains around big SOEs § Dominant in services – Retail, banking, communications – Logistics – IT 5
  6. 6. IT Sector § High-Tech Park – Tax-free and special regulatory zone for IT established in 2016 § Explosive growth – 1.4 bln exports in 2018 – But relatively small: less than 50 thou people employed § Lobbying efforts – Enlargement to include hardware; cryptocurrencies – IT University 6
  7. 7. Chinese Investment § Financing and investment (only 6.7% of total FDI) § Two big projects – The Great Stone – industrial park built to attract Chinese tech – One Belt One Road – Belarus positions itself as a bridge to the EU § Some scandals – Environmental and technological problems in at least two China- built factories: Svetlogorsk Pulp Mill and I-Power Plant § Some success cases – BelGee cars; potash fertilizers; appliances 7
  8. 8. In conclusion: § Some sectors are gaining influence – Do we need to worry about checks and balances? § Chinese investments are a mixed story – Big hopes are not paying off so far § Business/private sector is viewed as a source of growth – Does the government know what to do about it? 8

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