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                     Key Economic Indicators
       (Billions of Russian rubles unless otherwise noted)

                                  1991      1992      1993 /1
Income, Production,
 and Employment

GDP (current prices)                 71.88    n/a       n/a
Real GDP Growth (pct.)               -2       -12.2     -11.
GNP (current prices)                n/a       780       n/a
GDP by Sector                       n/a       n/a       n/a
Labor Force (000's)               5,019.7   4,831.2   5,000
Unemployment (pct.)                 0.04      0.30      0.40

Money and Prices

Money Supply
 (bill. Russ. rubles)               n/a       n/a     1,682.8
Base Interest Rate (pct.) /2          5.0      20.0     210.0
Personal Savings Stock
 Per Capita (in Russ. rubles)     2,243       857     7,330
Retail Inflation (pct.)           194.1     1,116     1,083
Wholesale inflation                 250.4   2,470     1,540
Consumer Price Index (actual)       687.9     957.0   1,052
Exchange Rate (avg.)
(Belarus coupons per US$)           n/a       364 /3    852 /4

Trade and Balance of Payments
(in millions of U.S. dollars)

Exports to U.S.                     n/a        43        32.2
Imports from U.S                    n/a        91        56.2
Trade balance with U.S.             n/a       -52       -24
Aid from U.S.                       n/a        38.6      60 /5


1/  Jan-Sept., 1993
2/  National bank base rate for loans to commercial banks as of
3/  Average exchange rate July-Dec. 1992
4/  Average exchange rate Jan.-June 1993
5/  Some U.S. assistance was available through regional
programs for which a country-by-country breakdown is not
available.  Figures should be considered as indicators of order
of magnitude only.  Most data was furnished by the Belarusian
State Committee for Foreign Economic Relations.

1.  General Policy Framework

    Belarus formally declared its independence on July 27,
1991.  Together with Russia and Ukraine, Belarus was a founding
member of the Commonwealth of Independent States (CIS) in
December, 1991.  The de facto head of state is Supreme Soviet
Chairman Stanislav Shushkevich.  The government is headed by
Prime Minister Kebich who, together with the Council of
Ministers, directs economic policy.

    Belarus has declared its intention to create a
"socially-oriented market economy," but the pace of reform in
Belarus has been slow.  The delay in implementing a
comprehensive program of economic reforms has been blamed on
the government fear over possible social unrest caused by
decreased living standards and unemployment.  Nevertheless the
government continues to lower the levels of food and energy
subsidies.  In November, in the face of increasing criticism
over its handling of the economy, the government introduced a
75-point plan aimed at lifting the economy out of crisis.  Like
previous plans, the latest program calls for increased reliance
on market mechanisms, but it remains to be seen if and how the
program will be carried out in practice.

    Belarus has a diversified economy which had generated one
on the highest standards of living in the former USSR.  Belarus
can meet all of its own basic food needs with the exception of
feed grains, sugar, and vegetable oil.  The agriculture sector
accounted for an estimated 23 percent of net material product
(NMP) and is balanced towards livestock which contributes about
60 percent of its NMP.  The industrial sector is biased toward
heavy industry with concentration in machine building,
electronics, chemicals, defense-related production, and
construction materials.  Virtually all enterprises are

    The industrial sector has experienced major supply, demand,
and price shocks as it relies on other CIS countries to supply
about 70 percent of its raw materials and to absorb 40 percent
of Belarus' output.  Despite initial efforts already
undertaken, the military complex requires vast restructuring
which will require investment as well as changes in operations
and ownership.

    The economy is energy-intensive because of traditionally
low energy prices.  More than 90 percent of primary energy
consumption is met by imports.  At world prices, the IMF
estimates value of net energy imports for the first nine months
of 1993 to be over $2 billion.  Belarus used almost two-thirds
of a $98 million IMF STF Loan in 1993 to pay for Russian oil.

    Belarus also faces a number of environmental problems
related to the Chernobyl accident and its heavy industrial
base.  Agricultural activity is still restricted in many areas
damaged by Chernobyl.

    Fiscal and monetary policies: the Government of Belarus
allowed itself a deficit of no more than 6 percent of
government expenditures, but most analysts agree that the
deficit for 1993 is now considerably above that level.  The
government has pledged to lower the deficit in 1994.  The 
minimum wage rose several times over the year, starting out at
3000 rubles per month in January, and ending with a final jump
in October when the Council of Ministers raised the minimum
wage to 20,000 rubles.

    In an attempt to gain more control over the money supply,
Belarus limited the circulation of the Russian ruble in 1993. 
Nevertheless, the volume of money in the Belarusian economy
increased dramatically last year.  Credits to otherwise
insolvent enterprises totalled 152.5 billion rubles for the
first six months of 1993.

    The National Bank of Belarus (NBB) is a weak financial 
institution, hampered by lack of technical and financial
expertise as well as by political interference.  Establishing
monetary control is impeded by the practice of monetizing the
fiscal deficit and outright cancelling outstanding debts of
state enterprises.  The refinance rate of the NBB serves as an
indirect subsidy to state enterprises as the rate is lower than
commercial credit or the inflation rate.

    Most of the specialized banks that make up the commercial
banking sector are largely owned by state enterprises.  Over
twenty five private banks have been established by small groups
and enterprises but are lacking in resources.

    Belarus joined the IMF, World Bank and the European Bank
for Reconstruction and Development (EBRD) in 1992.  The World
Bank anticipates lending Belarus several hundred million
dollars in the next one to two years for such things as
essential imports, institution building and private sector
development in agriculture.  The EBRD has approved a $38
million telecommunication project.  Belarus was granted GATT
observer status in 1992.

2.  Exchange Rate Policy

    Belarus is in the so-called ruble zone.  Experiencing a
shortage of Russian rubles in 1992, the government issued
coupons or "Belarusian rubels" in an effort to supplement the
circulation of currency and to protect the Belarusian market. 
In 1993, the government mandated that all non-hard currency
retail purchases made in state stores must be paid for in
"Belarusian rubels."  (Note: following Russia's lead, Belarus
is currently considering forbidding retail trade in dollars.) 
The government is using the "Belarusian rubel" to pay all wages
and student grants.

    On the basis of a treaty signed by Belarus and Russia on
September 8 (and subsequently ratified by the Belarusian
Supreme Soviet in November), Belarus and Russia agreed to merge
their respective monetary systems.  Belarusian officials stated
that the Russian ruble will be reintroduced as legal tender in
1994 and the "Belarusian rubel" will be gradually withdrawn
from circulation.  In order for this to occur, the agreement
mandates that certain Belarusian economic laws must be brought
into line with the corresponding Russian legislation.  (Note:  
The monetary agreement has not yet been ratified by the Russian

3.  Structural Policies

    The government has stated that it is anxious to attract
foreign investment and has introduced a series of reforms to
improve the investment climate.  The Supreme Soviet has passed
legislation regulating bankruptcy, leasing, and enterprises,
but implementation remains problematic.

    The Supreme Soviet adopted two privatization laws in 1993. 
In addition to 257 enterprises already privatized in 1991-92,
165 others are to be turned into private sector enterprises by
the end of 1993.  Small-scale privatization programs are
underway in some Belarusian cities, notably in Molodechno and
Brest.  Privatization vouchers are to be distributed to the
population starting in April 1994.

4.  Debt Management Policies

    Belarus was a signatory to the G-7 agreement on the former
Soviet Union (FSU); its share was set at 4.13 percent.  In a
1992 agreement signed with Russia, Russia assumed all of
Belarus FSU debt obligations, while Belarus gave up all rights
to FSU assets.  Recently, Foreign Minister Kravchanka has
hinted that he seeks to reopen negotiations on this issue.

5.  Significant Barriers to U.S. Exports

    Joint ventures with more than 30-percent foreign ownership
are entitled to export their products without a license and
enjoy a three-year tax holiday on profits commencing when the
company earns its first profits if the product is manufactured
by a joint-venture in Belarus.  If the company sells foods or
services of third parties -- so-called "middleman activity" --
the tax holiday on profits does not apply.  Hard currency
earnings from the export of a 30-percent foreign-owned joint
venture can be disposed of by the enterprise after payment of
appropriate taxes.

    These taxes include: a) individual income tax; b)
value-added tax (of 20 percent); c) excise tax, if the company
produces specified goods, e.g. Cigarettes and alcohol; d) real
estate and land taxes; e) tax on the use of natural resources
depending on the volume of natural resources extracted and on
polluting substances emitted or disposed of into the
environment; and, f) fuel tax.

    To date, there is no law on currency regulations in
Belarus, although draft decrees on this subject are regularly
adopted by the Supreme Soviet. At the end of 1992, the Supreme
Soviet issued a decree entitled "temporary rules for hard
currency regulation and the conducting of operations with hard
currency on the territory of the Republic of Belarus."  Under
this decree, hard currency earnings from the export of products
made by an enterprise with at least 30-percent foreign
investment (previously 20 percent) remain at the disposal of
the enterprise.  All other enterprises must sell 20 percent of
their hard currency earnings to the Government of Belarus and
pay a 10-percent hard currency revenue tax.  (Note: the
Government of Belarus is currently considering changes which
would liberalize these provisions.)

    To normalize its trade and investment relations with
Belarus, the United States has proposed a new network of
bilateral economic agreements.  The U.S.-Belarus Trade
agreement, which provides reciprocal most-favored-nation
status, was concluded and then ratified by the Belarus
Parliament.  The agreement came into force in the spring of

    A U.S.-Belarus Bilateral Investment Treaty, which would
establish a bilateral legal framework to stimulate investment,
is still under discussion.  A bilateral tax treaty, which would
provide businesses relief from double taxation of income, is
also being considered by both governments.  An Overseas Private
Investment Corporation (OPIC) incentive agreement, which allows
OPIC to offer political risk insurance and other programs to
U.S. investors in Belarus, has also been concluded and is in
force.  The U.S. Export-Import Bank is open for short-term
cover (maturities up to 360 days) in Belarus.

6.  Export Subsidies Policies

    One of the legacies of a centrally-planned economy is
government subsidies to state-owned enterprises; however, these
subsidies are aimed at maintaining production and employment
rather than being specifically targeted at supporting exports.

7.  Protection of U.S. Intellectual Property

    Belarus is not a member of the World Intellectual Property
Organization nor a party to any international conventions on
protection of intellectual property.  The U.S.-Belarus Trade
Agreement includes some commitments on protection of
intellectual property.

8.  Worker Rights

    The independent trade union movement is slowly developing. 
The largest trade union in Belarus, the Federation of Trade
Unions of Belarus, consisting of 5 million members, is not
considered an independent organ as it still follows government

    a.   Right of association

    A Law on Trade Unions, passed by the Belarusian Supreme
Soviet in 1992, allows the formation of independent trade
unions.  However, workers are often automatically inducted into
the government-affiliated Federation of Trade Unions.  The
Federation's active role in controlling social programs such as
pension funds will impede the growth of truly independent trade

    b.   Right to Organize and Bargain Collectively

    Existing legislation provides the right to organize and
bargain collectively and bars discrimination against trade 
union organizers.  In practice, however, there have been
reported cases of dismissals and threats of loss of employment
against independent trade union members.  The Supreme Soviet
passed a new law on labor disputes in 1992.

    c.   Prohibition of Forced or Compulsory Labor

    There is no explicit prohibition on compulsory labor. 
Belarus has ratified one of the ILO's forced labor
conventions.  Penal production in the production of
manufactured goods exists.

    d.   Minimum age of Employment of Children

    Existing law establishes 16 as the minimum age for
employment.  Exceptions are made in certain cases where the
primary wage earner is incapacitated.

    e.   Acceptable Conditions of Work

    The Supreme Soviet, along with the Council of Ministers,
has the responsibility to set a minimum wage which is increased
periodically in response to inflation.  The labor code limits
the work week to 41 hours, with a required 24 hour rest
period.  Many workers, however, find themselves underemployed
and are forced to take unpaid leave due to lack of demand for
factory production.  The law establishes minimum conditions for
work place safety and employee health.  However, enforcement of
these standards is lax.

    f.   Rights in Sectors with U.S. Investment

    There is no significant U.S. investment in Belarus.

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