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Economy of Belarus

While archeological evidence points to settlement in today's Belarus at least 10,000 years ago, recorded history begins with settlement by Baltic and Slavic tribes in the early centuries A.D. With distinctive features by the ninth century, the emerging Belarusian state was then absorbed by Kievan Rus' in the 9th century. Belarus was later an integral part of what was called Litva, which included today's As part of the former Soviet Union, Belarus had a relatively well-developed industrial base; it retained this industrial base following the breakup of the U.S.S.R. The country also has a broad agricultural base and a high education level. Among the former republics of the Soviet Union, it had one of the highest standards of living. But Belarusians now face the difficult challenge of moving from a state-run economy with high priority on military production and heavy industry to a civilian, free-market system.

After an initial outburst of capitalist reform from 1991-94, including privatization of state enterprises, creation of institutions of private property, and development of entrepreneurship, Belarus under Lukashenko has greatly slowed, and in many cases reversed, its pace of privatization and other market reforms, emphasizing the need for a "socially oriented market economy." About 80% of all industry remains in state hands, and foreign investment has been hindered by a climate hostile to business. The banks, which had been privatized after independence, were renationalized under Lukashenko. The government has also renationalized companies using the "Golden Share" mechanism--which allows government control in all companies with foreign investment--and through other administrative means.

Economic output, which declined for several years, revived in the late 1990s and early 2000s, but the economy has been dependent on heavy discounts in oil and natural gas prices from Russia. Belarus has historically re-exported the oil and oil products at world market prices, using the windfall profits to subsidize state enterprises. In December 2006, Belarus and Russian gas giant Gazprom signed a deal which will eventually end Russia's subsidies of gas for Belarus. Under the deal, Gazprom raised prices for Belarus gas deliveries in 2007 to $100 per 1,000 cubic meters, a significant rise from the subsidized previous price of $46, but still far less than the price paid by EU member states. The price for Russian gas will continue to increase incrementally until 2011, when it will equal the price paid by EU members. However, Belarusian officials stated in late 2008 and early 2009 Belarus’ interest in postponing the rise to EU prices until 2014-2015. Under the 2006 agreement, Gazprom will also gradually acquire a 50% stake in Beltransgaz, the Belarusian gas pipeline firm. In January 2007, Russia followed up with a steep duty on oil deliveries, which caused a significant drop in revenue from exports of oil products and Russian-sourced crude oil. The increase in gas prices and simultaneous moves by Moscow to reduce the profitability of refining Russian oil in Belarus for re-export disrupted plans to upgrade industries ranging from oil refining to cement production.

Peat, the country's most valuable mineral resource, is used for fuel and fertilizer and in the chemical industry. Belarus also has deposits of clay, sand, chalk, dolomite, phosphorite, and rock and potassium salt. Forests cover about a third of the land, and lumbering is an important occupation. Potatoes, flax, hemp, sugar beets, rye, oats, and wheat are the chief agricultural products. Dairy and beef cattle, pigs, and chickens are raised. Belarus has only small reserves of petroleum and natural gas and imports most of its oil and gas from Russia. The main branches of industry produce tractors and trucks, earthmovers for use in construction and mining, metal-cutting machine tools, agricultural equipment, motorcycles, chemicals, fertilizer, textiles, and consumer goods. The chief trading partners are Russia, Germany, Ukraine, and Poland.

The massive April 26, 1986 nuclear accident at the Chernobyl power plant, across the border in Ukraine, had a devastating effect on Belarus; as a result of the radiation release, agriculture in a large part of the country was destroyed, and many villages were abandoned. Resettlement and medical costs were substantial and long-term. Many living in Chernobyl afflicted zones have infrequent access to medical treatment due to remoteness, inadequate equipment, and substantial costs. Although the Belarusian Government claims otherwise, many radiation monitoring stations, especially in rural areas, are either ill-equipped, poorly staffed, and/or no longer in operation. Resettlement of those in affected areas remains incomplete.

Due to the economic and political climate, little new foreign investment has occurred in recent years. In 2002, two major companies, the Swedish furniture firm Ikea and Russian beer producer Baltika, ended operations in Belarus due to unrealized government commitments or unwelcome interference. Ford Motors did the same in 1999. Economic pressures in 2007 may have led to the unexpected and non-transparent sale of a state telecommunications company to an Austrian firm.

Growth continued to be robust in 2007. Consumer price inflation averaged about 8.3% in 2007, but higher energy import prices are expected to drive up inflation for 2008 and subsequent years. Large wage increases, which were typical in the 1990s and early 2000s, fueled some increased consumption but also made Belarusian firms less competitive. Close to 20% of enterprises and a majority of collective farms currently operate at a loss, a percentage that has remained steady since 2002. Beginning in late 2008, Belarus increasingly felt the effects of the global financial crisis, as exports decreased to other severely impacted economies, notably Russia. In light of the crisis, Belarus secured a $2 billion loan from Russia in November 2008 and a $2.5 billion stand-by arrangement from the International Monetary Fund (IMF) in January 2009.

Belarus continues to be heavily dependent on Russia, with the potential for greater economic dependency in a long-proposed EU-style union between the two states. Prospects for an eventual union state remain weak, however, largely due to the apparent lack of interest on the part of the leadership of both countries. However, Russia, Belarus, and Kazakhstan have announced plans to move ahead with the formation of a customs union that they expect to be completed by 2010.

The World Bank announced a new 4-year country assistance strategy for Belarus in December 2007, which focuses on global environment and energy challenges, enhances the competitiveness of the Belarusian economy to assure rising incomes, and protects the welfare of the most vulnerable. As part of the strategy, the World Bank is financing improvements to schools, hospitals, and homes for orphans, the elderly, and the disabled throughout Belarus, with particular emphasis on improving the energy efficiency of those facilities. In 2004, Belarus rejected a World Bank loan to help fight AIDS and tuberculosis. International Monetary Fund (IMF) cooperation is currently limited to policy and technical consultations.

Environmental Issues
Belarus has established ministries of energy, forestry, land reclamation, and water resources, as well as state committees to deal with ecology and safety procedures in the nuclear power industry. The most serious environmental issue in Belarus results from the 1986 accident at the Chernobyl nuclear power plant. About 70% of the nuclear fallout from the plant landed on Belarusian territory and about 20% of the land remains contaminated. Government restrictions on residence and use of contaminated land are not strictly enforced, and the government even announced plans in 2004 to increase agricultural production in the contaminated regions. The government receives U.S. assistance in its efforts to deal with the consequences of the radiation. Belarus also faces growing air, land, and water pollution levels from potash mining in the south of the country.

GDP (2008 est.): $57.68 billion.
GDP growth rate (2008 est.): 9.2%.
Per capita GDP (2008 est.): $11,800.
Natural resources: Forest land, peat deposits, potash, small amounts of oil and natural gas.
Agriculture: Products--grain, potatoes, vegetables, flax, beef, milk.
Industry: Types--machinery and transport equipment, chemical products, fabrics, and consumer goods.
Trade (2008): Exports--$31.81 billion (refined petroleum, potash fertilizers, machinery and transport equipment, chemicals, foodstuffs, metals, and textiles). Major markets--Russia, Germany, Netherlands, Poland, Great Britain, Ukraine, and Latvia. Imports--$36.64 billion (mineral products, machinery and equipment, metals, crude oil and natural gas, chemicals, foodstuffs). Major suppliers--Russia, Germany, Ukraine, Poland, Italy, Lithuania.
Exchange rate (June 2009): 2,852 BYR (Belarusian rubles) = U.S. $1.

Geography of Belarus

Location: Eastern Europe, east of Poland Geographic coordinates: 53 00 N, 28 00 E Map references: Commonwealth of Independent States Area: total: 207,600 sq km land: 207,600 sq km water: 0 sq km Area-comparative: slightly smaller than Kansas Land boundaries: total: 3,098 km border countries: Latvia 141 km, Lithuania 502 km, Poland 605 km, Russia 959 km, Ukraine 891 km Coastline: 0 km (landlocked) Maritime claims: none (landlocked) Climate: cold winters, cool and moist summers; transitional between continental and maritime Terrain: generally flat and contains much marshland Elevation extremes: lowest point: Nyoman River 90 m highest point: Dzyarzhynskaya Hara 346 m Natural resources: forests, peat deposits, small quantities of oil and natural gas Land use: arable land: 29% permanent crops: 1% permanent pastures: 15% forests and woodland: 34% other: 21% (1993 est.)
Irrigated land:
1,000 sq km (1993 est.) Natural hazards: NA Environment-current issues: soil pollution from pesticide use; southern part of the country contaminated with fallout from 1986 nuclear reactor accident at Chornobyl' in northern Ukraine Environment-international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Sulphur 85, Biodiversity, Environmental Modification, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection signed, but not ratified: Climate Change, Law of the Sea Geography-note: landlocked

Government of Belarus

Since his election in July 1994 as the country's first President, Alyaksander Lukashenka has consolidated power steadily in the executive branch through authoritarian means and has dominated all branches of government. He used a non-democratic referendum in November 1996 to amend the 1994 constitution to broaden his powers and illegally extend his term in office. He began to count his 5-year term in 1996, thereby adding 2 years to his first term in office. Based on the unrecognized 1996 constitution, Lukashenka announced that presidential elections were to be held in 2001. In 2004, he engineered a fraudulent referendum that removed term limits on the presidency. Independent exit polling of the referendum showed results far different from those officially announced. In 2006, Lukashenka "won" another term in an undemocratic election. In January 2007, he further consolidated his rule through local elections that failed to meet international standards.

In October 2000, parliamentary elections occurred for the first time since the disputed referendum of 1996. According to the Organization for Security and Cooperation in Europe's Office for Democratic Institutions and Human Rights (OSCE/ODIHR), these elections failed to meet international democratic standards. International monitors noted sweeping human rights violations and undemocratic practices throughout the election period, including massive vote-counting fraud. These irregularities led the OSCE/ODIHR to find that these elections failed to meet Belarus' OSCE commitments for democratic elections. March 2003 local elections and October 2004 parliamentary elections also failed to meet international standards of freedom and fairness. OSCE/ODIHR observers declared that the parliamentary elections fell far short of international standards, citing abuses in the campaign period and the vote counting.

The March 19, 2006 presidential election marked another low point in the government's treatment of its own citizens. OSCE/ODIHR observers noted that the election failed to meet international standards, was characterized by a disregard for the basic rights of freedom of assembly, association, and expression, and included a highly problematic vote count. Authorities detained many opposition and civic activists during the campaign and used force against demonstrators protesting the fraudulent election. Opposition presidential candidate Aleksandr Kozulin was beaten and arrested during post-election protests. He was sentenced to a five year jail term. The Belarusian authorities released Kozulin on August 16, 2008.

Belarus held parliamentary elections in late September 2008. Despite Belarusian authorities’ public assurances that the elections would be “unprecedentedly” democratic and transparent, the OSCE/ODIHR election observation mission determined the elections fell short of OSCE standards. The authorities denied registration for approximately 20% of opposition candidates as well as candidates overall. While candidates were allotted their mandatory campaign airtime on various media outlets, restrictions on this access made it difficult for candidates to adequately present their platforms to the public. OSCE/ODIHR observers noted good access to polling stations during early voting and election day. However, the Belarusian authorities fell short on access for OSCE/ODIHR and other observers to the vote count, a crucial aspect for determining the transparency of the elections. OSCE/ODIHR observers assessed transparency of the vote count to have been bad or very bad in 48% of observed cases. The OSCE recognized minor improvements in the conduct of the elections, but the lack of a transparent vote count made it impossible to determine the validity of the elections. The Department of State issued a statement following OSCE/ODIHR’s preliminary assessment, expressing disappointment with the failure of the Belarusian elections to meet international standards.

Although government restrictions on basic freedoms spiked in connection with elections, they continued even in non-election periods. Efforts to further infringe upon press freedoms included the continued use of libel laws, restrictions on foreign funding, pressure on businesses not to advertise with independent media, limitations on access to newsprint and printing presses, prohibiting access to state distribution networks, censorship, restrictions on the import of media-related materials, temporary and permanent suspension of independent and opposition periodicals, confiscation in quantity of printed publications, and detention of those distributing such material. In December 2004, the government adopted new legislation establishing criminal penalties for "discrediting Belarus" and organizing activities of an unregistered non-governmental organization (NGO). The government has continued to make use of its monopoly on television broadcasting to present biased news coverage and to minimize the presentation of opposing points of view. All Internet service providers in Belarus operate through a state-controlled portal. Despite constitutional provisions, a 1998 government decree limited citizens' rights to express their own opinions. A new media law came into force in February 2009. The law prohibits Belarusian media outlets from obtaining technical or monetary support from foreign organizations or individuals unless they are co-founders, requires re-registration of most existing media and accreditation of journalists, and subjects online news media to the same requirements as print and broadcast media. These new restrictions threaten to undermine the last outlets of free speech online in Belarus. However, the Belarusian authorities have publicly stated they will in practice suspend the requirements for online media. In late 2008, the authorities took a number of positive steps, including distributing two leading independent newspapers--Nasha Niva and Narodnaya Volya--through state networks, registering the “For Freedom” movement, and creating a public council to engage civil society.

The 1994 and 1996 constitutions both provide for freedom of peaceful assembly; however, the regime severely restricts this right in practice. Demonstrations require an application at least 15 days in advance of the event, and the local government must then respond positively or negatively at least 5 days prior to the event. Applications by opposition groups are usually rejected. Following many unsanctioned demonstrations, police and other security officials detain, harass, and beat demonstration participants. Police also often film sanctioned events.

The constitution provides for freedom of religion; however, the authorities restrict this right in practice. Although Article 16 of the 1996 amended constitution reaffirms the equality of religions and denominations before the law, it also contains restrictive language stipulating that cooperation between the state and religious organizations "is regulated with regard for their influence on the formation of spiritual, cultural, and country traditions of the Belarusian people."

The government also restricts religious freedom in accordance with the provisions of a 2002 law on religion and a 2003 concordat with the Belarusian Orthodox Church (BOC), a branch of the Russian Orthodox Church (ROC) and the only officially recognized Orthodox denomination. Although there is no state religion, the concordat grants the BOC privileged status. Protestants in particular have attracted negative attention. Numerous anti-Semitic acts and attacks on religious monuments, buildings, and cemeteries have occurred with little discernable response from the government. Authorities have kept many religious communities waiting as long as several years for decisions about property registration or restitution. Authorities also harassed and fined members of certain religious groups, especially those that the authorities appeared to regard as bearers of foreign cultural influence or as having a political agenda. Foreign missionaries, clergy, and humanitarian workers affiliated with churches have faced many government-imposed obstacles, including deportation and visa refusal or cancellation.

On December 17, 2007, President Lukashenka abolished exit stamps in favor of a computerized system that verifies the validity of passports. At the same time, however, he authorized the Interior Ministry to ban travel by individuals who had access to state secrets, who were facing criminal prosecution or civil suits, and who had outstanding financial commitments. The travel ban list allegedly has 100,000 names. Several opposition leaders and activists are subject to this travel ban and have been prevented from temporary travel abroad.

The constitution provides for the right of workers--except state security and military personnel--to voluntarily form and join independent unions and to carry out actions in defense of workers' rights, including the right to strike. In practice, however, these rights are limited. The Belarusian Free Trade Union (FTUB) was established in 1991 and registered in 1992. Following the 1995 Minsk metro workers strike, the President suspended its activities. In 1996 FTUB leaders formed a new umbrella organization, the Belarusian Congress of Democratic Trade Unions (BCDTU), which encompasses four leading independent trade unions and is reported to have about 15,000 members. In late 2003, the BCDTU became a member of the International Confederation of Free Trade Unions (ICFTU).

In May 2001, a complaint was lodged with the International Labor Organization (ILO) by several trade union organizations alleging the government was attempting to destroy the independent unions. A trade union campaign was carried out to raise international awareness and put pressure on the Belarus Government. Late in 2001, the regime attempted to further restrict the unions by refusing to turn over dues paid by members. Once it became clear that the unions and the FTUB were adjusting to this change, the government in June of 2002 embarked on a takeover of the FTUB and several of its branch unions. The FTUB subsequently became an arm of the government, and the election of Leonid Kozik to the position of Chairman of the FTUB has been challenged by the ILO.

On November 2003, the ILO approved the establishment of a Commission of Inquiry to investigate alleged serious violations of workers' rights in the country. That same month the Ministry of the Economy informed the ILO that all activities related to its technical assistance project to labor unions must cease, because the registration of the project was denied. In 2004, the ILO presented the government with a list of 12 recommendations to improve its treatment of independent unions. A January 2006 ILO mission found the government had not implemented any of these recommendations. As a result, in June 2007, the European Union (EU) suspended Belarus' trading preferences under the Generalized System of Preferences (GSP). The United States had suspended GSP preferences in 2000 due to Belarus' failure to take steps that would allow the right of association and collective bargaining.

In March 2004 the government began forcing state employees (some 80% of Belarusian workers) to sign short-term work contracts. Although contracts may be concluded for a period of 5 years, most expire after one year--essentially granting the government the opportunity to annually fire anyone in its employ. Many members of independent unions, political parties, and civil society groups have lost their jobs when their contracts were not renewed.

The State Department's report on human rights practices in Belarus is located at http://www.state.gov/g/drl/rls/hrrpt/2008/eur/119069.htm.

Principal Government Officials
President--Alexander Lukashenko
Prime Minister--Sergei Sidorsky
Foreign Minister--Sergei Martynov
Ambassador to the U.S.--Vacant
Ambassador to the UN--Andrei Dapkiunis

Belarus’ embassy in the U.S. is at 1619 New Hampshire Ave., NW, Washington, DC 20009; tel: 202-986-1606; fax: 202-986-1805; website: http://www.belarusembassy.org

Type: Republic.
Constitution: March 30, 1994; revision by unrecognized national referendum of November 24, 1996, gave presidency greatly expanded powers and became effective November 27, 1996.
Independence: 1991 (from Soviet Union).
Branches: Executive--President (head of state), Prime Minister (head of government), Council of Ministers (cabinet). Legislative--bicameral: the House of Representatives (110 deputies) and the Council of the Republic (64 deputies). Judicial--Supreme Court; Constitutional Court.
Administrative subdivisions: Six oblasts (regions) and one municipality.
Political parties: Belarus has 15 registered political parties, including: Agrarian Party (AP); Belarusian Communist Party (KPB); Green Party Belarusian Social and Sports Party; Belarusian Patriotic Movement (BPR); Belarusian Popular Front (BNF); Belarusian Social-Democrat Party (BSDP); Social-Democratic Hramada Party; Conservative Christian Party-BNF; United Civic Party (UCP); Liberal Democratic Party of Belarus (LDBP); Party of Communists Belarusian (PKB); Party of Popular Accord; Republican Party of Labor and Justice (RPPS); Social Democratic Party of Popular Accord (PPA);Several of these parties exist in name only. Other, unregistered parties are also active, such as: Belarusian Christian Democracy, Belarusian Party of Labor, Women's Party Nadezhda, Christian Conservative Party, and Party of Freedom and Progress.
Suffrage: Universal at age 18.

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History of Belarus

Belarus as well as today's Lithuania. Belarus was the birthplace of the Grand Duchy of Lithuania (Belarusian was the state language of the Grand Duchy until 1697, in part owing to the strong flowering of Belarusian culture during the Renaissance through the works of leading Belarusian humanists such as Frantzisk Skaryna). Belarus was the site of the Union of Brest in 1597, which created the Greek Catholic Church, for long the majority church in Belarus until suppressed by the Russian empire, and the birthplace of Thaddeus Kosciuszko, who played a key role in the American Revolution. Occupied by the Russian empire from the end of the 18th century until 1918, Belarus declared its short-lived National Republic on March 25, 1918, only to be forcibly absorbed by the Bolsheviks into what became the Soviet Union. Suffering massive population losses under Stalin and the Nazi occupation, Belarus was retaken by the Soviets in 1944. It declared its sovereignty on July 27, 1990, and independence from the Soviet Union on August 25, 1991. It has been run by the authoritarian Aleksander Lukashenko since 1994.

People of Belarus

Nationality: Noun--Belarusian(s). Adjective--Belarusian.

Population (July 2009 est.): 9,648,533 (urban 73%; rural 27%).

Population decline (2009 est.): -0.378%.

Ethnic groups (1999 census): Belarusian (81.2%), Russian (11.4%), Polish (3.9%), Ukrainian (2.4%), Jewish (0.3%), other (0.8%).

Religions (2004 est.): Eastern Orthodox 80%, Catholic 14%, Protestant 2%, other (including Autocephalous Orthodox, Jewish, Muslim, and Krishna) 4%.

Languages: Belarusian and Russian (official).

Education: Literacy--99.6%.

Health: Infant mortality rate (2009 est.)--6.43/1,000. Life expectancy (2009 est.)--70.63 years (men 64.95 years, women 76.67 years).

Work force (4.3 million as of December 31, 2005): Industry-34.7%; agriculture and forestry--14%; construction--7.9%; transportation, communications--7.6%; trade, catering--12.2%; education--10.7%; other--24.3%.

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