Belarus PM vows change to attract foreign investors
30.05.2008 | Publications
MINSK, May 30 (Reuters) - Belarus' prime minister on Friday pledged quick reforms to attact investment into the ex-Soviet state, accused by the West of clinging to Soviet economic practices.
The economy, which relies on oil refining, chemicals
industry and machine-building, is currently ranked 110th in
World Bank ratings gauging investment climate. Authorities have
vowed quick action to propel the state into the top 30.
"We make no secret of our ambitious programme for a
comprehensive reform of our economy over three years," Prime
Minister Sergei Sidorsky told an investment forum.
"Statistics for economic development confirm that our plans
to get into the top 30 countries in terms of investment climate
are completely realistic."
Belarus, whose economy is almost totally controlled by the
state, is also accused of violating human rights.
Authorities have in recent months repealed a "golden share"
rule that allowed the government to control key enterprises,
introduced tax breaks in small cities and simplified business
registration procedures to attract investors.
Official statistics show that foreign direct investment into
Belarus in the first quarter of this year totalled $1.3 billion
compared with $700 million in the same period last year.
Government statistics project that domestic and foreign
investment will rise to $17 billion this year from $12 billion
last year.
The government has pledged to reduce the tax burden on
businesses, introduce a single income tax rate of 12 percent and
repeal restrictions on business practices.
"Our plan is to reduce the tax burden in the economy by 1.2
percent in 2009," Sidorsky said. "We believe reducing the tax
burden is a good signal to investors."
Since quarrelling with Russia last year over energy prices,
Belarus has sought improved ties with the West, especially the
European Union and called for an inflow of foreign investment to
maintain high growth rates.
Growth in 2007 stood at 8.5 percent of gross domestic
product and forecasts for this year call for 11 percent.
The authorities have pledged to proceed with selective
privatisation and foreign borrowing, though Sidorsky said this
month a planned maiden Eurobond had been put on hold.
Upcoming privatisations include those of state bank
Belinvestbank in which it will cede control to Germany's
Commerzbank AG
within four months, and giving up
control of a second bank, Belpromstroibank.
Belarus also hopes to net at least $500 million in selling
state mobile phone operator BeST, with Turkish company Turkcell
considered the most likely buyer.
It also plans to sell half of its Naftan oil refinery and
the Polimir petrochemical company.
The economy of 10 million people has in the past year
attracted several foreign investors, including Russian banks VTB
and Vneshekonombank.
Deputy Prime Minister Andrei Kobyakov told the forum that 30
percent of state companies would have share issues in 2008.
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