Republic of Belarus: the economy of the country

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:41

The Republic of Belarus in 1991 on September 19 declared independence. Since then, multiple transformations have been implemented. The beginning of the reforms took place precisely at this time. However, the products produced by the country, unfortunately, had low competitiveness and did not meet European standards. Belarus (the economy at that time was just beginning to emerge) took advantage of ties with Western countries, which made it possible to establish flows of export raw materials and imported equipment.

In the markets of the CIS countries, the products of the republic, on the contrary, were very competitive. Here, the country successfully imports raw materials and exports high value-added products.

After the collapse of the Soviet Union, Belarus, whose economy suffered from a lack of investment, actively began to introduce import substitution policies and relocate productioncomponents to their territory.

Belarusian economy at the beginning of the 21st century

When applying international standards to Belarusian organizations, a significant part of them do not stand up, this is especially noticeable in comparison with enterprises in developed countries. As long as Russian resources were relatively cheap, the republic's economy coped, demonstrating high rates of development. However, this is not a certificate of the quality of products manufactured on the territory of the Republic of Belarus. The country's economy only suffered as local businesses gradually lost ground in all product markets.

The situation began to worsen in 2006 along with the rise in prices for Russian raw materials. In 2011, this figure exceeded a record high, which almost completely destroyed the country's economy. This is what led to an almost threefold devaluation of the Belarusian ruble.

In 2012, external relations with European states are developing extremely favorably. However, this was not enough, the economy showed the lowest GDP growth rate in recent times - 1.5%.

Reasons for creating a customs union

The lack of prospects for economic development prompted Belarus to accelerate the creation of a customs union with Russia and Kazakhstan. In order to stay afloat in the developing world, the country badly needed economic reforms. The first and most important of these is the need to modernize enterprises, making them more efficient and economical.

The significance of such a restructuring could not be underestimatedAlexander Lukashenko, President of the Republic of Belarus. The country's economy was still inefficient and not competitive enough, so it was out of the question to act independently on the European market without the support of strong partners. This was the main reason why the state prefers political and economic integration with Russia and Kazakhstan. This kind of regional union, subject to certain conditions, could become the initial stage of Belarus' entry into the world economy.

Conclusion of the customs union

The first agreement on the customs union between Belarus and Russia was signed back in 1995. Due to the divergence of economic interests for 15 years, these countries have done practically nothing to effectively advance along the intended path. And only by 2010, when Kazakhstan joined the process, the Customs Union acquired some real features, especially after the signing of the agreement on the formation of the Common Economic Space.

Main sectors of the Belarusian economy

Currently, the following industries are well developed in the state:

• food industry - for 2014 is more than 25%;
• fuel and energy complex specializes in the production of coke, nuclear materials and petroleum products, occupies almost 20%;
• chemical production (about 10%);
• engineering (just under 9%);
• metallurgy (7%).

Trade Relationships

Belarusian economy today put ongood enough level. In modern conditions, it is trying to actively build up mutually beneficial ties with all countries of the world, considering this the main guarantee of the success of the entire state as a whole. The main component of the economy is trade. Therefore, studying the development of the state, this issue should be given special attention.

The main trading partners of the Republic of Belarus are:

• Russia ($37.6 billion);
• Ukraine ($6.2 billion);
• Germany ($4.1 billion);
• UK ($3.2 billion);
• China ($3 billion);
• Poland ($2.3 billion).

Data taken from "BelStat" (official website of the Register of Information Resources of Belarus).

The most positive balance is in trade with the Netherlands. And the most negative thing is with Russia, which means a very large import of goods.

The main export of the Republic of Belarus is potash fertilizers, oil products and engineering equipment. And imports are energy resources and equipment.

Pharmaceutical industry and biotechnology are currently considered the most demanded industries where foreign investments are made.

The economy of Belarus uses a multi-vector approach. That is, the state is establishing trade and economic relations with the countries of the West, the CIS and the third world equally.

USA and European Union

The country has certain difficulties with Western countries (USA and EU), in particular, due tosanctions, high consumer competition in this market and due to strict regulations and standards.

CIS

On the market of the CIS countries, Belarusian goods are very competitive and are in great demand. However, trade turnover has been declining in recent years. It is also worth noting that in 2015 Belarus, together with Russia, Kazakhstan and Armenia, joined the Eurasian Economic Union, which opens up new opportunities for trade, the movement of capital and labor. So far, these relations are not fully functioning due to the global crisis, but Belarus will soon be able to benefit from this agreement.

Third world countries: trade and economic relations

Third world countries are a completely new market for the Republic of Belarus. Its economy from these relationships is rapidly increasing its level. Local goods are successfully sold here, as there is practically no competition.

However, there are certain problems with logistics (more precisely, with its cost) due to the long distance. But political scientists believe that this market is quite beneficial for the state, since it is not always possible to work smoothly with Western countries. That is why China, India, Brazil, Venezuela, Pakistan, the United Arab Emirates and others have become Belarus' main partners.