Will free economic zones in Belarus disappear?

We won’t be dealing with that anymore, as I have already strained this process before”, - announced Lukashenka talking about the development of the free economic zones (FEZ).

There is no need to further expand Belarus’ existing free economic zones (FEZs), Aliaksandr Lukashenka said on July 9 while visiting woodworking plants in the Mahilou Free Economic Zone that had been built by Lithuanian companies, reports BelaPAN.

Mr. Lukashenka explained that enough jobs had been created in Belarus, and that the policy of drawing in investment with the help of favourable conditions in FEZs was no longer expedient, according to the presidential press office. 

There are other ways of granting benefits and privileges to investors if the government wants to attract them, he said. 

Many small cities and villages offer just as many incentives to businesspeople as FEZs, he noted. 

The head of state was informed about the performance of Belarus’ six FEZs and the Mahilou Free Economic Zone in particular. The export of goods by companies resident in this FEZ is expected to reach nearly $2 billion in 2015. 

According to Economy Minister Mikalai Snapkou, the FEZs account for about 10 per cent of Belarus’ exports, with the Mahilou Free Economic Zone accounting for about half of the region’s exports. 

Piotr Rudnick, head of the regional executive committee, explained that the share of the Mahilou Free Economic Zone in the exports was so large because a number of large companies had resident status in the FEZ and enjoyed preferential treatment. 

Mr. Lukashenka warned that such practices should be gradually abandoned. State enterprises should be given until the end of the 2011-15 period to stop relying on government subsidies, he said. 

Lithuanian Ambassador Evaldas Ignatavicius expressed satisfaction with cooperation in the woodworking industry, describing it as a good foundation for carrying out other joint projects in Belarus. 

Mr. Lukashenka noted that “honest” foreign investors were welcome in Belarus. He dismissed allegations that foreign companies could not enter the Belarusan market because of red tape.