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GDP:
$53.7 billion GDP growth rate: 7% Labor force: 4.3 million (1998)
Labor force-by Unemployment rate: 2.3% officially registered
unemployed (December 1998); large Industries: tractors, metal-cutting
machine tools, dump trucks, earth movers, eight-wheel-drive,
high-flotation trucks, equipment for livestock feeding, motorcycles,
television sets, chemical fibers, fertilizer, linen fabric,
wool fabric, radios, refrigerators, consumer goods Currency:
Belarusian rubel (BR) Exchange rates: US$1-139,000 (25 January
1999) |
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Belarus
Belarus has
seen little structural reform since 1995, when President LUKASHENKO
launched the country on the path of "market socialism". In keeping
with this policy, LUKASHENKO re-imposed administrative controls
over prices and currency exchange rates and expanded the state's
right to intervene in the management of private enterprise. This
produced a climate hostile to private business, inhibiting domestic
and foreign investment. The Government of Belarus has artificially
revived economic output since mid-1996 by pursuing a policy of rapid
credit expansion. In a vain attempt to keep the rapidly rising inflation
in check, the government placed strict price controls on food and
consumer products, which resulted in food shortages. Long lines
for dairy products, chicken, and pork became common in the closing
months of 1998. With the goal of slowing down the devaluation of
the Belarusian ruble, LUKASHENKO in 1997 introduced a new, complex
system of legal buying/selling hard currencies. The new "command"
system proved to be totally unworkable and resulted in galloping
devaluation. In addition to the burdens imposed on businesses by
high inflation and an artificial currency regime, businesses have
also been subject to pressure on the part of central and local governments,
e.g., arbitrary changes in regulations, numerous rigorous inspections,
and retroactive application of new business regulations prohibiting
practices that had been legal. A further economic problem is the
sizable trade deficit. SOURCE: CIA FACTBOOK
Comment:
Belarus
represents a difficult region to conduct business in. With the exception
of manufactured goods, which the country seeks to export, collaborative
commercial projects are difficult to manage and are unpredictable
in outcome. There are considerable opportunities at the market and
manufacturing level, the agreement and financial aspects of these
transactions tend to be time consuming labyrinths however. A country
in these circumstances tends to have a weak currency and offers
a commercial opportunity as a managed exporter in niche markets.
Belarus deserves a watching brief at the very least as products
generated in the country may be very attractive due to price, although
they may be unattractive due to design. Part-finished products may
be an alternative. It is often easier to address Belarus via an
intermediary operation in one of the adjacent countries but it may
be necessary to take an active interest in the finishing, packing,
or processing aspects of products emanating from Belarus, as these
areas are the weakest. The real opportunities in Belarus will occur
when the controlled economy is finally recognised as unworkable.
In the meantime, USSR type relationship approaches are indicated,
also involving personal contacts. We wait.

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