Belarus is largely unknown to the Western business community. The country that remained the sole faithful ally of Russia among Western CIS countries is not known for the business opportunities it may contain. The main publicity Belarus receives is for its eccentric semitotalitarian president and the countrys role and place in EU Russia geopolitical assumptions and strategies. For a country whose population is bigger than the population of all the three Baltic States and whose economy is growing during the last decade with more than 6% per annum, the little attention Belarus receives as a business opportunity is partly due to the relative absence of knowledge among business executives in the West in general and in Finland in particular. This article attempts to present a general overview of the contemporary Belarus economy and business environment as well as the business opportunities it may reveal.
Belarus is a market of 10 million people that is so far largely neglected by Western companies in general and particular by investments. To some extent it seems that this is a result of negative publicity in Western media due to an authoritarian style of President Alexander Lukashenka. Still behind the facade of totalitarian rule one discovers generally healthy economy with strong growth rates. The week points in the current economic strategy of Belarus are 1) over dependence on Russia as a sole supplier or energy resources at preferential rates and 2) the need for Belarus enterprises to seriously improve their performance in respect of productivity and general competitiveness. Both weaknesses require relevant actions from the Belarusian government and the government so far shows remarkable ability to adapt to the circumstances and apply working even if not widely approved policies.
Based on the elaborated above scanning of Belarus as a business destination one may conclude that foreign companies should include Belarus in their expansion list:
1) as a target market for machinery and equipment that goes in line with the governmental desire to improve the technological level of the Belarusian industry. A significant part of the Belarus industrial sector is profitable at present and the demand for capital goods is generally backed by financial capabilities of either the companies or the government.
2) as an investment destination in general and its Free Economic Zones in particular, which can be used as an assembly line for number of products targeted for the markets of Western Europe or Russia, Especially in the case of Russia that could prove to be an elegant way of minimizing Russian customs duties and taxes while getting access to the Russian market potential.
3) as a target market for products related to improving the infrastructure as the government is willing to invest in infrastructure Belarus is less likely to be an attractive target market for mass consumer goods. Having relatively high customs duties, highly regulated currency exchange regime and still undeveloped retail sector, selling mass consumer goods could prove rather painful and unyielding process.
While the aim of this report is to summarize and bring closer to Western business audience the very existence of dynamic and growing market of 10 million people, such study should definitely benefit from more empirical evidence from the activities and the experiences of Western companies that are involved in business in Belarus. It is their experience that could be more telling as to what is the true business environment in the EUs neighboring market.
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