Economic trends
Fourth largest economy of the CIS, Belarus is both largely publically administered (over 70% of GDP is generated by public or quasi public enterprises) and very open commercially.
Even today, Belarus' economy remains an economy in transition, inherited from the former Soviet block. After its independence in 1991, Belarus slowly adopted market-economy reforms, and in particular numerous privatizations. The country has always maintained close relations with Russia. Since 2005 and the accession of Loukachenko to the power, the country, which had adopted a "market socialism", has re-nationalized many private companies and the pressure from the part of the government has become stronger in the business field: arbitrary changes in regulations, numerous inspections, arrest of businessmen and factory owners.
Belarus obtains gas and oil from Russia at a reduced price and its growth comes largely from the re-exportation of Russian oil at market price which has created a source of tension with Russia. Trade with Russian, by far its largest trading partner, fluctuates according to the tensions between these two countries.
Despite the financial crisis the country is experiencing, the Belarusian GDP has been growing steadily in recent years, reaching 6% in 2010 and 5% in 2011. However, the effects of the global crisis have been deeply felt, especially in the industrial sector.
In great difficulties economically and financially since the beginning of 2011, the authorities have had to agree to a significant devaluation of the currency, the Belarusian ruble losing over 50% of its value within only a few months. Minsk was been granted a loan of $3.5 billion from the anti-crisis fund of the Eurasian Economic Community to support the economy: inflation reached 36%. Seeking external funding, Belarus also called on the IMF and requested the establishment of a new "Stand By" program for an amount of up to $ 8 billion. However, according to the latest IMF mission in Belarus, the lack of progress in implementing the necessary reforms and recommendations - such as price liberalization, privatization, floating the currency and wage freezes - will not allow to resolve the situation in the near future. In a statement made in June 2011, the World Bank described the economic model of Belarus as "out of breath."
Main branches of industry
Agriculture contributes to around 9.3% of the country’s GDP and employs 14% of the active population. The country is the third largest producer of milk in Europe.
The industry sector accounts for 39.7% of the GDP and employs over 30% of workforce. The main industries of Belarus are machine tools, agricultural equipment, fertilizers, chemical products, prefabricated construction material, motor vehicles, motorcycles, textiles and some consumer products (such as refrigerators, watches, televisions, and radios).
The tertiary sector contributes around 51% to the GDP and employs half of the Belarusian workforce.
International trade
As a legacy of the Soviet period, during which Belarus was the assembly line of the USSR, production structures between Russia and Belarus are still largely complementary. As a result, the Belarusian economy remains heavily oriented towards the Russian market, which is both its natural out and the main supplier (over 50% of total trade).
The country's main import partners are Russia, Germany, France, Ukraine and China. Belarus is an important transit country for oil from Russia, which has guaranteed supplies of oil and gas at below-market rates for many years.
Its main customers are Russia, the Netherlands and Ukraine.
The country's sustained economic growth has nonetheless been accompanied by significant external imbalances, especially of its trade deficit, which has deteriorated significantly (about $7 billion). Since spring 2011, the country has been experiencing a severe currency crisis. The devaluation of the Belarusian ruble in May has not been a sufficient short-term solution and has had a great impact on the country's foreign trade.
The trade balance remains largely negative, particularly because of the rising prices of oil sold to Belarus by Russia. Russia remains the largest trading partner of Belarus.
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Last updates: May 2012
