bne:Invest in Belarus
Content: 1 Top Story 3 Feature 6 Sector 8 Economics & finance 11 Chart 12 News in brief
Follow us on twitter.com/bizneweurope November 2014
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Belarus tops CIS in UN Human Development Index Belarus has emerged from this year’s UN Human Development Index (HDI) as the highest-ranking nation in the Commonwealth of Independent States, sitting 53rd out of 187 countries. Having climbed seven places in the last five years, Belarus now sits three places above Russia with an HDI score of 78.6, compared with Russia’s 77.9, as the bne:Chart shows. On the inequalityadjusted index, which factors in the distribution of development benefits across a country’s population, Belarus sits six places higher, at 47th in the world.
Nearly a decade ago, the then US national security advisor Condoleezza Rice described Belarus as one of six “outposts of tyranny,” alongside North Korea, Burma, Cuba, Iran and Zimbabwe. Now, the supposed last dictatorship of Europe outperforms most Central and Eastern Europe/ Commonwealth of Independent States (CEE/CIS) and, for some measures, even Western Europe on the index. Indeed, for enrollment in tertiary education, Belarus far surpasses both the world and Western Europe averages, with 91% of its school-age
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population entering higher education. Alongside Russia, it also outperforms the West for both youth and adult literacy rates, at 99.8% and 99.6%, respectively.
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Despite these positives, Belarusians’ perceptions of wellbeing were consistently lower than the CEE/CIS average in the Gallup World Poll across a number of measures. These included education, healthcare and employment, although they registered overall life Its gender equality record also impresses in satisfaction figures that were higher than the world comparison with other CEE/CIS nations. At 29.5%, average, CEE/CIS average and Russia figures. its share of parliamentary seats held by women is just 1% lower than the average for Western See charts here: Europe, nearly 10% higher than the CEE/CIS http://www.bne.eu/content/story/bnechart-belarusaverage, and more than double the Russian figure. tops-cis-un-human-development-index
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Belarus flirts with foreign investors in bid to boost international trade Belarus’ credentials as a foreign investment destination were laid out by a delegation of government officials and bankers at the “Belarus Investment Forum” in London on November 14, organised by the National Investment and Privatization Agency of the Republic of Belarus.
issuances in 2015 ($1bn) and 2018 ($800m): “We would like to invite international investment in the debt instruments of Belarus, not out of a dire need – the situation with external debt is very comfortable – but to establish a presence on the market.”
Attempts to grow its presence on the international capital market, a tax regime attractive to foreign investors and its impressive fiscal stability were offered up as proof that Belarus is making efforts to shake off its reputation as an inaccessible market to foreign investors.
Indeed, Belarus’ current external government debt as a percentage of GDP is only 37%, according to the Belarusian National Bank. In contrast, the UK’s currently stands at 90.6%.
The most surprising announcement of the forum was that Belarus could hold international IPOs of large state-run companies in the near future – a move that has been mooted on several occasions Deputy Finance Minister Maxim Ermolovich but has never come to fruition. “We have described the country’s new tax policy – to be implemented within two years – as, “a significant discussed listings on the London Stock Exchange of several large companies; a bank and several advance for doing business in Belarus.” machine-tool making enterprises, which are almost ready,” said Minister of Economy Nikolai “As investors coming to Belarus, you will not come across any exhortative taxes. There will be Snopkov. special tax regimes for newly-created companies, “There is not a single enterprise, as and free economic zones, such as in high-tech our president says, that we are not parks,” he said. prepared to sell. We are thoroughly preparing for when the best time Ermolovich also described Belarus’ motivation behind its forthcoming $1.8bn, 10-year Eurobond comes,” he added.
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Feature stands ready to commence work towards a new programme.” The IMF has been setting such conditions for Belarus since late 2010, when the previous standby loan programme for the country ended and the government launched fresh attempts to get aid to help pay back its debts and support the economy.
Belarus benefits from WestRussia clash over Ukraine While the row over events in Ukraine continues, neighbouring Belarus is trying to balance two opposing forces. On the one hand, Belarus is one of Russia’s last remaining close political allies in the post-Soviet space and is dependent on Russian financial support; on the other, it has shown a desire to improve relations with the West by playing the role of mediator in the Ukrainian crisis. An International Monetary Fund (IMF) team visited Belarus in late October as part of a process to agree a new economic support programme for the country. David Hofman, head of the IMF mission, acknowledged that the Belarusian authorities have requested a new loan, but said the multinational lender wants to see structural reforms first. “A new programme would continue to require a credible commitment to a comprehensive package of consistent and strong macroeconomic policies and deep frontloaded structural reform that could be supported by IMF membership,” he said. “If the authorities are prepared to make decisive changes to their current policies over the coming months to achieve such a strong package, the Fund
While the IMF has refrained from doling out any more money, Belarus obtained financial support from Russia and Russia-backed financial institutions such as the bailout fund of the Eurasian Economic Community. In late September, Belarus obtained a $1.55bn Russian government loan aimed at beefing up its international reserves as well as servicing its external debt. In July, Russia provided a $450m loan to Belarus. Nadezhda Ermakova, Belarus’ central bank governor, tells bne that Russia’s total support of $2bn means the country’s current level of foreign reserves is adequate. As of October 1, Belarus’ reserves stood at $6bn, which is close to the equivalent of two months’ of import cover. That is enough for the stability of the domestic currency in today’s conditions, but it does not guarantee protection from any external or internal shocks. However, Ermakova is sceptical about the chances of agreeing a new IMF support package for Belarus in the near future. “Personally, I doubt that it’s possible,” she says. Previously, Ermakova has repeatedly pointed out that there could be problems having any loan approved by the Western nations represented on the IMF Executive Board, due to the West’s strained political relations with the Belarusian authorities. On the other hand, Ermakova hails the IMF’s potential offer of advisory assistance to the government, considering it a way to send a
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positive signal to international investors after the financial meltdown of 2011 and the fragile recovery thereafter. “Showing to the world that the IMF works with us is even more important than the money they can allocate to us,” Ermakova says.
Belarusian capital. “And it seems that our view on Ukraine gave an incentive and an opportunity for sensible people in the West, in America, to declare their cooperation with us,” the Belarusian president said.
Thaw in relations? Despite Ermakova’s scepticism, some signs of a thaw in the West’s relations with Belarus have appeared over recent months.
However, it looks like Lukashenko is prepared for the long haul. “They [the US and EU] considered me as a dictator and continue to consider me this way. But now it’s not so convenient to voice this idea,” he underlined.
A US-Belarus investment forum took place in New York in late September, during which Mikhail Myasnikovich, the Belarusian prime minister, noted positive signals from the US about a change in attitude to Belarus. “Suffice to say that almost every event of the forum was attended by representatives of the US State Department, who thereby demonstrated to businesses that it is worth working with Belarus,” Myasnikovich said, according to his media office. He added that the US representatives didn’t rule out the policy of “small steps” to improve trade and economic relations with Belarus. Christopher Panico, political and economic counsellor at the US embassy in Minsk, told the Belarusian magazine Delo that the US authorities, “hope that the forum laid the foundation for discussions on how to increase the flow of investment to Belarus and trade with it.” The softening of US rhetoric towards the Belarusian authorities has coincided with EU officials restraining from taking too tough a line. This has happened against the background of Belarus' active involvement in the EU-RussiaUkraine peace negotiations that took place in Minsk. Previously, Belarus had been targeted by financial and visa sanctions against a long list of Belarusian companies and officials with links to President Alexander Lukashenko. In an interview with journalists on October 17 in Minsk, Lukashenko said that he “did everything” to arrange the EU-Russia-Ukraine dialogue in the
Most likely, the EU and Belarus will remain locked in a situation of “neither peace nor war” for the near future: European nations are hardly ready to abandon their quest for Belarus to improve the human rights situation, while Lukashenko doesn’t appear willing to embark on any wholesale political and economic liberalization. This view is supported by the EU’s recent decision, announced on October 30, to extend for another 12 months a package of travel and financial sanctions against companies and officials related to the Belarusian government. “This is because not all political prisoners have been released and rehabilitated, and the respect for human rights, the rule of law and democratic principles has not significantly improved in Belarus," the Council of the European Union explained in a statement. Russia’s support Lukashenko has also openly expressed his disagreement with Russia’s annexation of Crimea in March. "It is unacceptable for a state to violate the territorial integrity of another country, to take away a part of that country," he said. However, the president tempers such criticism with statements of loyalty to Russia, and to Vladimir Putin personally. “If we need to stand back to back with Russia, with Putin, we will do it,” Lukashenko said. Even more importantly, Belarus is one of the founding members of the Customs Union trade bloc (together with Kazakhstan and Russia), which
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will deepen into the Eurasian Economic Union (EEU) from January 1, 2015. And this brings with it Russian support in certain areas. In particular, Russia and Kazakhstan agreed that Belarus has the right to leave in place capital outflow controls as well as the obligatory sale of foreign currency earnings of Belarusian firms inside the country, Ermakova says. “Both Russia and Kazakhstan have already been removed these regulations,” she explains.
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reliable partner for Moscow in its tit-for-tat trade war with the West. “The re-export [of Western food banned in Russia from the territory of Belarus] is impossible – it’s closely tracked,” Lukashenko said in an interview on October 17, refuting suspicions that Belarus will use its membership in the Customs Union and future EEU to cash in from reexport “grey schemes.”
At the same time, Lukashenko has underlined that Belarus retains the right to process banned Western food products and sell them on the In October, Russia agreed to compensate Belarus Russian market. As Andreyev points out: “Obviously, for any possible losses from recent tax changes Belarus has no desire to make an extra profit by regarding oil extraction in Russia. According to unfair means. But private companies have their the changes, taxes on the extraction of oil will be interests there, and sometimes they try to involve increased and export duty on oil and oil products reduced. Currently, Belarus purchases oil in Russia state-owned firms in these schemes. Sometimes, for its refineries without duty (as a Customs Union for example, private companies turn to state-run cheese factories requesting to re-export prohibited member), but channels most of its export duties [Western] products [under Belarusian brands].” to Russia’s budget. As a result of the manoeuvre, the country could face losses of up to $1bn in However, it’s impossible to say that such schemes the next year. After negotiations between the two are rife, Andreyev adds. “The Russian regulatory governments, Russia has agreed that export duty on oil products made using Russian oil in 2015 will authorities work closely with the Belarusian ones. And as soon as the volume of transit of food be fully credited to the state budget of Belarus. through Belarus or food exports to Belarus from the EU increase sharply, the Belarusian authorities Despite Lukashenko’s recent caustic remarks on promptly respond to the situation,” he explains. Russia, the Belarusian government tries to be a
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Sector
High-tech parks help nurture software sector Belarus IT sector has been one of the few standout successes of the government's efforts to drag the economy into the 21 century. Since the state set up its first high-tech park several years ago, Minsk has become a hub for software development used by big investment banks and large companies from London to Moscow. And the government is continuing its drive to develop the sector. A second high-tech park is in the works, which will be part of the SinoBelarusian Great Stone Industrial Park that’s under construction in the Smolevichy district, some 25km outside Minsk. The park is part of the state programme to build infrastructure to support the development of nanotechnologies, said Sergei Zhdanok, chairman of the National Nanoindustry
Association and representative of the National Academy of Sciences, in September. Amongst the new directions the new park will explore is developing 3D printer technology. "We can enter the market of 3D printing services because there is still space for action in this area. Current 3D printers are not perfect," said Sergei Chizhik, first deputy chairman of Belarus’ Presidium of the National Academy of Sciences, in an interview with BelTA. "A lot of new ideas are still needed to make 3D printers affordable, fit them with a wide range of functions and, most of all, greatly increase the quality of printed products." Having already won a feather for its cap in the IT business, Belarus is starting to cast its net further afield. In September the government announced plans to increase
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The relevant possibility was discussed in Moscow at the meeting of the Belarusian delegation led by State Science and Technology Committee Chairman Alexander Shumilin with RVC Director Closer to home, the advent of the Eurasian Economic Union (EEU), due to come into existence General Igor Agamirzyan in October. on January 1, is already making inter-regional investment easier. With e-commerce already According to Anatoly Grishanovich, acting director of the Belarusian Innovative Foundation, one of the most dynamic sectors in the Russian economy, leading Russian companies are already RVC is also interested in arranging seminars looking over the border for new opportunities and for specialists and will institute individual nominations. The cooperation is the first step Belarus is an obvious destination. in establishing a venture-financing mechanism in Belarus using Russia's experience, which The state backed Russian Venture Company will become the EurAsEC Center for Innovative (RVC) was set up several years ago to promote innovation and investment into high-tech projects Technologies – a pan-regional body to promote investment into innovation and technology across and says it intends to take part in the Belarusian national contest of innovative projects as an expert the EEU region. and an investor. cooperation with South Korea in the field of information and communication technologies.
There's no toilet paper in Belarusian sausages "There is no toilet paper in our sausages and there never was," Belarusian President Alexander Lukashenko told Russian journalists in October.
Lukashenko claimed Russia had lowered its food-quality standards after the 1991 collapse of the Soviet Union, while it retained its state standards.
The wry remark was delivered in the context of falling food quality standards in Eastern Europe and to highlight that food that is processed in Belarus is of the highest quality.
"Belarusian [food]Â is of substantially higher in quality," adding the remark about there being no toilet paper in its sausages.
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Economics & finance Belarus to seek $100mn in compensation in potash case Belarus plans to seek about $100mn in damages as part of the potash case, writes BelTA news agency, citing Prosecutor General Alexander Konyuk. “Since the case is still being investigated in Russia, the lawsuit will be dealt with later,” he said, explaining that civil lawsuits filed by the Belarusian side can be processed either by an international court or a Russian one.
In 2013, Russian industrial and investment group Oneksim of tycoon and ex-presidential candidate Mikhail Prokhorov acquired 21.75% of Uralkali controlled by another influential businessman Suleiman Kerimov. Belarusian authorities demanded Kerimov be replaced as owner. Another Russian fertilizer major UralChem acquired 20% in Uralkali.
Belarus forex/gold reserves up by $18.1mn to $6.2bn in October
Previously, Konyuk was quoted as saying that Belarus plans to bring civil action against Uralkali The forex/gold reserves of Belarus increased by ex-head Vladislav Baumgertner as part of the $18.1mn in October to $6.227bn, the National potash case. Bank announced. According to the central bank, the placement of foreign bonds by the finance In July 2013, Uralkali shook the global potash ministry on the domestic market has helped market by announcing an end to cooperation on maintain the current level of reserves. export sales through the BPC (Belarus Potash Company) joint venture – one of the two largest Forex reserves in Belarus averaged $3.7bn from global potash traders with a 40% share), while 2002 until 2014, reaching all time high of $8.3bn aiming at much higher output volumes and lower in June of 2012 and a record low of $399.7mn in prices. Following that, at the end of in the end of January 2003. August Uralkali CEO Baumgartner was detained in Belarus and accused of abusing office and plotting an unlawful scheme against its global competitors in the potash market, and the BPC in Belarus may issue $1bn bond in US particular. Belarus is considering the possibility of issuing Russian authorities took a neutral stance on the bonds worth $1bn on the US capital market, conflict. Since then, the shareholders of Uralkali according to Belarusian Deputy Finance Minister have changed, Baumgartner was extradited to Maxim Yermolovich, speaking in New York on Russia, and a new CEO appointed. Relations September 22. between Russia and Belarus have also notably improved. However, it was not clear whether Yermolovich said that talks were Uralkali will abandon its strategy soon: it was already underway with potential US reported that output increased 61% y/y in Q4/13 investors who had also bought part of or 2.8mn tonnes, while closing large supplies deal previous bond issues. at notably lower prices.
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"We are going to redeem $1bn worth of bonds next year out of the $1.8bn worth of bonds that we have sold abroad," noted Yermolovich.
Belarus growth slows to 1.5% in Jan-Aug, dragged down by Russia Economic growth in Belarus slowed to 1.5% in the first eight months of 2014, dragged down by a stagnating Russian economy, one of the republic's main export markets. The republic was hoping to benefit from Russia's ban on European food products and while there was a significant increase in food exports, due to the devaluation of the ruble the profits from these exports was not as much as hoped. Other branches of the economy are being impacted by Russia's economic problems. The production of goods traditionally exported to Russia – machinery, transport vehicles or consumer goods like TV sets or refrigerators – have all declined substantially. The falling value of the ruble has made Belarusian exports to Russia more expensive and is depressing demand for consumer goods as well. The falling ruble is putting pressure on the National Bank of Belarus to follow suit and devalue the Belarusian ruble again. At home, retail trade in Belarus had been developing dynamically due to both the partial liberalisation of the sector and strong income growth in recent years, but it has taken a hit this year.
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Belarus won’t raise VAT rate in 2015 The VAT rate in 2015 is not going to be raised, announced PM Mikhail Myasnikovich. At the same time, he pointed out that if such a decision was made, the increase in VAT rate would have a positive effect on the country’s balance of payments and would help to protect the domestic market from imports, providing additional support to exporters. Consumption of imports would be reduced due to the growth of its value, while exports would not suffer.
Belarus central bank won’t adjust refinancing rate until year-end The National Bank of Belarus (NBB) has no intention of adjusting the refinancing rate, despite the situation in the Russian financial sector, central bank chief Nadezhda Ermakova announced. Since August, the refinancing rate has remained at 20% per annum, she noted. Ermakova pointed out that current refinancing rate is "is sufficient for the regulation of interest rates and other parameters." She also believes that at the moment there is no need to devalue national currency. The average exchange rate in 2015 is expected at BYR11,300-BYR11,400 per $1, with a refinancing rate of 16%-17%. As for Russian loans, Ermakova stressed that the loans were in Russian rubles, so "we do not lose anything." At the same time, she admitted that the situation in the Russian financial sector already has had an impact on the Belarusian economy. "Of course, much will depend on oil prices," she concluded.
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National Bank of Belarus buys Bank Moscow-Minsk The National Bank of Belarus has bought the Bank Moscow-Minsk, a subsidiary of the Bank of Moscow, which is owned by Russian state-owned bank VTB. The deal is agreed but not closed yet, according to the head of the central bank, Nadezhda Yermakova. According to Yermakova, the Bank MoscowMinsk will not merge with the state-owned Belinvestbank.
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S&P affirms ‘B-‘ rating on Minsk The international rating agency Standard & Poor's affirmed its 'B-' long-term issuer credit rating for the Belarusian capital Minsk, with a stable outlook in October. According to the rating agency, the financial performance and liquidity position of the Belarus capital remains "comfortable." The stable outlook reflects that of Belarus itself. As was reported, S&P affirmed the long-term foreign currency rating on Belarus at ‘B-/Stable/B’.
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Chart Crashing currencies nothing new to former Soviet bloc states The Russian ruble has tanked this year to all-time lows, but crashing currencies are nothing new to the countries of the former Soviet bloc. Currency crises have been periodic and painful over the last 20 years, notes the International Monetary Fund (IMF) in a report looking back on the last 25 years of transition, released in October to coincide with the anniversary of the fall of the Berlin Wall.
and exiting the period determined to follow policies that would reduce their exposure to such risk – laying the ground for the period of growth that followed," the IMF wrote in the report released in October.
systems. And indeed many of the countries that had progressed less in establishing robust market-based frameworks succumbed, first in a number of individual crises, and then in the wake of the systematic case of Russia in 1998.
decade ago is that central banks have been much more willing to allow their currencies to fall, as few are still using currency boards or pegged exchange rates. Devaluation hurts, but preserving reserves and the beneficial effects of cheap currencies will (hopefully) allow these economies to bounce back that much more quickly than before.
While the dramatic fall of the Russian ruble has been in focus, the Kazakhs devalued the tenge at the start of this year, Belarus has devalued its The latter part of the 1990s was a period of major ruble twice in the last two years, and the Ukrainian hryvna has lost more than 40% of its value since crises in emerging markets, from Mexico in the start of this year in its worst devaluation on 1994–95, through to Asia in 1997, and leading to Argentina in 2001. Emerging European economies record. were also highly vulnerable in this environment, The main difference between the currency falls with macroeconomic stability not fully secured, this time round versus those in the last crisis a nascent market institutions and fragile financial
"However, these crises (several of which involved calls on the IMF for financial assistance) resulted in most countries learning from the experience,
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News in brief Belarus improves ranking in World Bank's Doing Business report
Belarusian PM chews out bureaucracy
Belarus Prime Minister Mikhail Myasnikovich Belarus moved up three places to 57th in the lambasted the country's civil service and said they annual Doing Business ranking compiled by the would work better if they were more self-motivated, World Bank. The Republic soared in last year's during a session of the Council of Ministers ranking from 107 to 60th position in the 2014 Presidium in October, BelTA reported. ranking, but the pace of change has slowed this year. "The initiative-free work of civil servants is extremely disturbing," the PM grumbled. "Belarus ranked among top performers in registering property, enforcing contracts and staring a business. The pace of regulatory reform in Belarus, however, remains insufficient to improve the country overall Doing Business ranking significantly. More needs to be done in several areas, namely, getting electricity, trading across borders and getting credit," report concluded.
While foreign investors in Belarus report strong support for their projects at the federal level, they complain that the heavy bureaucracy at lower levels in the government is a major impediment to their work. In the same vein the government accounted that it will make the process of public procurement more transparent to improve efficiency and reduce corruption. The main thrust of the reform will be to move over to an electronic procurement system.
Overall, the World Bank was upbeat on some major steps take in recent years that have made a big difference to the ease of doing business in the country. In particular the report highlighted Belarus’ significant progress in the application of an electronic system for filing China interested in buying food, and paying contributions for the obligatory investing in food-processing insurance for work related accidents, and by simplifying the filing requirements for corporate income tax and value added tax. China is interested in purchasing food from Belarus and investing in the processing of However, more is needed and the republic agricultural products, the Ambassador of China has done badly on a few other points such to Belarus Cui Qiming said during a meeting with as increasing the ecological tax rate and Mogilev region Governor Piotr Rudnik, reported making bad debt provisions non-deductible for BelTA news. purposes of the corporate income tax, which hurt its score. According to the ambassador, searching for new opportunities to advance Belarus-China cooperation was one of the key tasks of his
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working visit to Mogilev Oblast. Currently, Belarus-China trade is misbalanced, with China selling a lot more to Belarus than it buys from Belarus. Therefore, the export of Belarusian food and agricultural products to China could become one of the promising avenues of cooperation.
Belarus, Turkmenistan to double trade turnover Trade between Belarus and Turkmenistan in the first eight months rose to $450m and is expected to double in 2015. Trade between Belarus and Turkmenistan has increased fivefold over the past five years. Belarus exports tractors, trucks, road, construction and agricultural equipment, bicycles, autoloaders, tires, medicines, chemicals, wood products and food.
Belarusian bitumen exports surge
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exports of bitumen are disguising exports of other refined oil goods in an attempt to avoid paying export tariffs. The scale of the operation so far has fallen short of the solvents smorgasbord of 2012. The Russian side has already expressed its concerns and initiated the creation of the working group to investigate the issue. Thanks to the oil tax manoeuvre, the bitumen scheme will become irrelevant in 2015, and Belarusian refineries will have to find other ways to survive.
Dumper truck MAZ exports jump 15% up in Jan-Sep Exports of one of Belarus' few international famous brands, the giant MAZ dumper trucks, jumped 15% between January and September versus the year before. According official figures MAZ shipped 2,938 vehicles to foreign markets in the period and had opened up some new markets. “We continue working on the Arab region market, which we believe is a difficult one. Major German, Chinese, Indian manufacturers of vehicles are well represented there. However, our company has managed to increase sales in the region by more than two times. In order to secure good positions on the Arab region market, MAZ has opened a representative office in the United Arab Emirates,” Vitaly Goncharik, Deputy Director General for Foreign Trade of the company, told BelTA.
Bitumen sales schemes are starting to replace the old solvent sales schemes of 2012. Bitumen is a semi-solid that is extracted from heavy crude oil during the refining process and is more commonly known for being used in asphalt. In 2014 Belarus will still be required to make oil export tariff payments for exporting oil refinery products made from Russian oil. It turns out, however, that certain kinds of bitumen are not on the list of refinery goods, writes Belarus Digest. Sales in Southeast Asia are growing particularly strongly. This year MAZ shipped more vehicles In the first quarter of 2014 the exports of bitumen to Vietnam than last year and is from Belarus increased by 182%. Moreover, increasing sales to Laos, Cambodia according to official statistics the production and a number of other countries, of bitumen is two times lower than its export according to Goncharik. The company figures. From this, one may deduce that the is also exploring the Indonesian
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market and expects to start delieveries there this nano-, femto-, bio- and information technologies year. and will be located in the Minsk Oblast.
Minsk is Russians’ most popular November getaway Minsk is the most popular destination in the Commonwealth of Independent States (CIS) for the month of November, Russia's online hotel booking service Oktogo.ru reports. Other favoured destinations include: Yerevan, Astana, Baku, Kyiv, Bishkek, Chisinau, Almaty, Vitebsk and Tashkent. After the ruble lost some 20% of its value this year, Russian tourists are increasingly staying inside the CIS, as European trips have become more expensive, while many CIS countries have also devalued their currencies, including Belarus. According to Oktogo.ru, the most popular CIS countries among Russian tourists in 2014 are Belarus, Kazakhstan, Ukraine, Armenia, Azerbaijan, Kyrgyzstan, Moldova and Uzbekistan.
Minsk to open second high-tech park Following the outstanding success of the first one, the Belarusian government plans to open a second high tech park, that will be financed by the Black Sea-Caspian Sea International Fund (BSCSIF). The first is home to the country’s flourishing software engineering sector that has grown up in recently years. The new one will focus more
The management company for the future park has already been registered as a Belarus' resident company; principled support has been granted by a number of countries represented in the fund, as well as from the EU and some international venture corporations. The Black Sea-Caspian Sea International Fund is a non-governmental and not-for-profit organization established in Bucharest in 2009. Members of the Council of Directors include politicians, diplomats and scientists from Azerbaijan, Albania, Belarus, Bulgaria, Bosnia and Herzegovina, Georgia, Iran, Kazakhstan, Kyrgyzstan, Moldova, Russia, Romania, Sao Tome and Principe, Serbia, Turkey, Ukraine, Croatia, Montenegro, Switzerland and the Republic of South Africa.
Price of Russian gas to stay unchanged in 2015 The price Belarus pays for Russian gas will remain almost unchanged in 2015, Belarusian representative to the Council of the Eurasian Economic Commission Sergei Rumas told BelTA on October 21. Currently Belarus pays $165 per 1,000 cubic meters of Russian gas, less than half of what Ukraine is paying and substantially below the prices Russia charges its European clients. But Belarus and Russia are gradually moving towards equality in the price of gas as part of the more general economic integration as part of the Eurasia Economic Union that comes into force next year.
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Russia, Belarus to expand military drills in 2015 Russia and Belarus will expand their programme of military drills in 2015 because of "new threats" to the so-called Union State, Russian Defence Minister Sergei Shoigu said at the end of October. The Union State, a supranational entity of Russia and Belarus, was established in 2000 on the basis of agreements the two countries signed in 1996 and 1997. "We have expanded our programme for drills in 2015. The expansion is in light of the changing situation on our borders and in the world as a whole," Shoigu said during a meeting with his Belarusian counterpart in Minsk. According to Belarusian Defence Minister Yuri Zhadobin, the major joint exercise in 2015, Shield of the Union, will be held in an expanded format following Shoigu's proposal. Russia has also been upgrading Belarus' military with modern systems, such as four S-300 surface-to-air missile systems that will be delivered to Belarus by the end of 2014.
Ukraine cuts off Belarus power deliveries Belarus has got caught up in the Russia-Ukraine confrontation after the authorities in Kyiv decided to stop deliveries of electricity to the republic on October 1. “We have completely stopped electricity exports to Belarus since October 1,” Ukrainian Minister of Energy and Coal Industry Yuriy Prodan told the state news agency UNIAN.
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However, the disruption is believed to be temporary as the Belarusian Energy Ministry is considering importing up to 1bn kWh from Ukraine in 2015 and another 1.5bn kWh from neighbours. "We are considering the possibility of importing 1bn kWh of electricity from Ukraine next year, but the final decision will be made in November and December," Belarus' First Deputy Energy Minister Leonid Shenets, adding that negotiations with suppliers are currently underway. "Contracts are usually signed in November or December.” Even then the imports are going to a stop-gap measure while the republic develops its own power generation capacities. The country already leads the CIS in terms of reductions in imported power and hopes to be completely self-sufficient within a few years.