Business and Economics
COUNTRYAAH, Belarussian business was one of the cornerstones of the
Soviet economy, and clear traces of the central planning of
the Soviet period are still evident. During the Soviet
period, Belarus's production and income levels per capita
were higher than the all-union average. Nominal control of
business was divided between Moscow (production of all-union
importance) and Minsk (production of local importance). As
an unusually large part of the industry was of strategic
importance, Moscow's control was extensive.
Initially, this meant greater opportunities for local
decision-making power over the available production
apparatus. However, few of the former Soviet republics have
been so reluctant to cut ties with the Russian Federation.
The high degree of integration with the Russian Federation
even after the dissolution of the Soviet Union contributed
to an unstable macroeconomic situation. High inflation
despite extensive price controls, trade and current account
deficits, a rapidly growing foreign debt and falling
production levels have characterized the independent
In other respects, too, attempts to reform the economy
have been slow. Early goals such as price liberalization,
deregulation and privatization have come into conflict with
the industrial policy pursued, which promises support to
However, during the early years of the 1990s, the
country's economy showed some growth, mainly due to
subsidized prices of imported oil and gas from the Russian
Federation. As the Russian Federation began to raise the
price of oil and gas, the growth rate slowed down. By the
time the international financial crisis reached the country,
the economy was hit hard and Belarus has been forced to
apply for loans from the Russian Federation and the IMF.
During the 2010s, the economic crisis worsened and the
country was once again forced to apply for loans from the
Russian Federation and also sought credit from Chinese
banks. The problems of the Russian economy in 2014 further
spread the Belarusian problems. During the 2000s, the
country was forced into several devaluations.
For information on GDP and other business statistics, see
As in most previously centrally planned economies, the
primary sector plays a greater role in the Belarusian
economy than is customary in industrialized countries.
Agriculture, which was still organized in 1993 in 688 state
and 1,825 collective farms, has slowly begun to transform in
the direction of more decentralized and smaller farming
units. The privately owned farms are still few, but despite
this, the private sector accounts for a large part of the
cultivation mainly of vegetables, fruits and potatoes. This
is partly because many of the agricultural employees have
the opportunity to grow for their own part alongside. A
significant part of the acquisition and marketing
organization has remained unchanged, and pricing for the
more important crops is still partly done on administrative
About 45 percent of Belarus territory is said to be
suitable for agriculture. Most of this area, or 7.4 million
ha, is allocated for arable land. The dominant crops are
cereals, mainly wheat and rye, as well as potatoes. Other
crops that are grown to a significant extent are sugar
beets, vegetables, fruits and flax. Livestock management has
about 1/5 of the agricultural land, mainly in the form of
natural pastures or for the cultivation of grassland.
Cattle, pigs and sheep are the most important animal
species, and animal production is mainly focused on meat and
Belarus was severely affected by the Chernobyl disaster
in 1986. Large areas of cultivated land are still in decline
due to radiation.
The forest is one of Belarus's largest natural resources.
About 34 percent of the country's area is covered by forest.
In addition to the dominant pine forest, there are also
economically interesting stocks of oak, elm, maple and
beech. In total, just over 7 million m 3 is
harvested per year for both the paper and pulp industry and
the sawmill industry. High harvesting combined with
replanting and widespread destruction during the Second
World War has made the population relatively young. Most of
the forest is owned by the state.
Belarus is poor in extractable raw materials. This also
applies to fossil fuels, where the country is largely
dependent on imports. However, small deposits of oil and
natural gas exist. The oil is mainly extracted in the
southern part of the country, near the cities of Mazyr and
Hrodna, but smaller deposits are also found in the north at
Navapolatsk. Belarus also has large peat assets, which is
broken on a significant scale for energy purposes.
Oil production is dominated by the refining of crude oil,
mainly from domestic and Russian sources. Due to disputes
with the Russian Federation regarding prices and tariffs on
imported Russian crude oil, Belarus began to import from
more remote regions such as Venezuela and Azerbaijan via
ports in Estonia, Latvia and Ukraine in 2010.
Of the mineral, only the potassium carbonate deposits, in
the Salihorsk region among others, are significant and
correspond to about 1/6 of world production. Otherwise there
are breakable deposits of rock salt; production is also
carried out as a residual product of potassium carbonate
Belarus is an important transit country for oil and gas
from the Russian Federation to Western Europe and also has a
significant oil refining industry. About 90 percent of the
country's energy needs are covered by imports of oil and
gas, mainly from the Russian Federation. Until 2007, the
Russian Federation granted large subsidies on these
supplies, but since then the subsidies have decreased, which
has had major negative consequences for the Belarus economy.
Since 2010, therefore, imports have also been made of crude
oil from other regions.
Domestic energy production, about 10 per cent of imports,
consists of oil, biofuels, peat and natural gas. Almost 40
per cent of the total energy supply is exported. Electricity
is produced almost exclusively from natural gas, and it is
heavily subsidized for household consumption. The share of
renewable energy of the total supply is about 7 percent
When the Chernobyl accident occurred in Ukraine in 1986,
a build-up of nuclear energy in Belarus was underway.
However, work on the two planned facilities, of which the
first is located about 30 km south of Minsk, was
discontinued in 1990 with reference to public opinion. As a
result of the increased cost of energy imports, Belarus has
long-standing plans to resume the nuclear program.
During the period 2011-20, the intention is to reduce the
need for energy imports from the Russian Federation. If
fully implemented, the Russian natural gas demand will
decrease from over 80 percent (2009) to about 55 percent of
the total energy supply. Currently (2012), the construction
of two nuclear reactors at Ostrovets with production start
around 2020 is being prepared, based on Russian financing
During the Soviet period, the relatively high degree of
industrialization, combined with the lack of important
sources of raw materials, meant that Belarus was very
dependent on other republics within the Soviet Union. Most
of the industry, including important industries such as
machine manufacturing and electronics, was also controlled
by Moscow ministries. During the Soviet period, the large
importation of fossil fuels at low prices meant that the
Belarusian industry was heavily subsidized. As prices have
risen to levels more in line with the world market, many
companies have encountered difficulties.
The heavy engineering industry, to which both the
civilian and defense-related electronics industries are
attributed, still accounts for almost half of total
employment. The industry, which is preferably located in
Minsk and the country's other major cities, is largely
horizontally integrated with large units as a result.
The chemical industry is also built around large plants,
in some cases in connection with the country's two
refineries in Navapolatsk and Mazyr. In addition to heavier
oils and other relatively low-value petroleum products,
fertilizers and standardized basic chemicals are the
industry's main products. The process industry in general
mainly utilizes the country's forest assets; the paper and
pulp mills are just as important from the employment point
of view as the chemical industry.
In addition to the engineering industry, the production
of textiles and clothing, as well as leather and shoes is
the country's most important industry. Apart from food, the
light industry is otherwise neglected. Some manufacturing of
consumer capital goods, such as white goods and home
electronics, occurs but is difficult to assert against
foreign products. Not infrequently, Belarus's defense
industry has accounted for a significant portion of the
total production of such products. Nevertheless, the
conversion from production of military equipment to civilian
production has proved difficult to implement.
Belarus's foreign trade is largely done with the Russian
Federation, Ukraine, EU countries and China. Until 1994,
there were extensive import and export controls.
Harmonization with Russian legislation and the tariff
structure has since taken place. Mainly, machinery, vehicles
and chemicals are exported, while the main import goods are
oil, gas and metals.
The effects in the country's southeastern part of the
Chernobyl accident and accusations of human rights abuses
have meant that tourism has declined since the mid-1980s.
Still, it is a hospitable, beautiful and interesting country
on the everyday level, whose cultural heritage testifies to
the ties to Poland. This is less true for Minsk, whose cold
power architecture and desolate parade streets are
reminiscent of the Soviet era, and more for the countryside
where country roads lead through a rolling green landscape
with many forests and thousands of lakes.
In the eastern part of the country, cities and
architecture have been influenced by the influence from the
east. Polatsk has a stately cathedral and the center
preserves an old-fashioned small-town feel. A visit to the
Chagall Museum in the artist's birthplace of Vitsebsk will
be memorable. South-west of Minsk are two of the most
interesting buildings of the Polish High nobility - the
enormous 16th-century brick castle in Mir and the
16th-century Nesvizh castle in Italian style.
Both are listed on UNESCO's World Heritage List. In
Hrodna, which was one of Poland's three capitals, there is a
14th-century castle whose museum clarifies the character of
Belarusian folk culture as well as the classic royal palace
from the mid-18th century. The city also has a
well-developed music and theater life.