The Republic of Belarus in 1991 declared independence on September 19. Since then, multiple transformations have been introduced. The beginning of the reforms was precisely at this time. However, the products manufactured by the country, unfortunately, had low competitiveness and did not meet European standards. Belarus (the economy at that time was just beginning to emerge) took advantage of ties with Western states, which allowed for the establishment of flows of exported raw materials and imported equipment.
On the markets of the CIS countries, the products of the republic, on the contrary, were very competitive. Here, the country successfully imports raw materials and exports products with high added value.
After the collapse of the Soviet Union, Belarus, whose economy suffered from a lack of investment, actively began to introduce a policy of import substitution and transfer production of components to its territory.
Economy of Belarus at the beginning of the XXI century
When applying international standards to Belarusian organizations, a significant part does not stand up, this is especially noticeable in comparison with enterprises in developed countries. While Russian resources were relatively cheap, the republic’s economy coped, demonstrating high rates of development. However, this is not a certificate of the quality of products in the territory of the Republic of Belarus. The country's economy only suffered, as local enterprises gradually lost ground in all product markets.
The situation began to deteriorate since 2006, along with higher prices for Russian raw materials. In 2011, this figure exceeded a record high, which almost completely destroyed the country's economy. That is what led to almost three-fold devaluation of the Belarusian ruble.
In 2012, external relations with European states are developing extremely favorably. However, this was not enough, the economy showed the lowest GDP growth rate in recent years - 1.5%.
Reasons for creating a customs union
The lack of prospects for economic development prompted Belarus to force the creation of a customs union with Russia and Kazakhstan. In order to stay afloat in the developing world, the country was in dire need of economic reform. The first and most important of them is the need to modernize enterprises, making them more efficient and economical.
The significance of such a restructuring could not be underestimated by Alexander Lukashenko, the president of the Republic of Belarus. The country's economy was still inefficient and not competitive enough, so there was no question of acting independently on the European market without the support of strong partners. This was the main reason why the state prefers political and economic integration with Russia and Kazakhstan. A regional union of this kind, subject to certain conditions, could become the initial stage of introducing Belarus into the world economy.
The conclusion of the customs union
The first customs union agreement between Belarus and Russia was concluded back in 1995. Due to the mismatch of economic interests over 15 years, these countries have done virtually nothing to effectively move along the planned path. And only by 2010, when Kazakhstan joined the process, the Customs Union acquired some real features, especially after signing the agreement on the formation of the Common Economic Space.
The main sectors of the Belarusian economy
Currently, the following industries are well developed in the state:
- food industry - for 2014 is more than 25%;
- the fuel and energy complex specializes in the production of coke, nuclear materials and oil products, occupies almost 20%;
- chemical production (about 10%);
- mechanical engineering (slightly less than 9%);
- metallurgy (7%).
Trade relationship
The economy of Belarus is today set at a fairly good level. In modern conditions, she is trying to actively build up mutually beneficial ties with all countries of the world, considering this the main guarantee of success for the entire state as a whole. The main component of the economy is trade. Therefore, when studying the development of the state, special attention should be paid to this issue.
The main trading partners of the Republic of Belarus are:
- Russia ($ 37.6 billion);
- Ukraine ($ 6.2 billion);
- Germany ($ 4.1 billion);
- Great Britain ($ 3.2 billion);
- China ($ 3 billion);
- Poland ($ 2.3 billion).
Data taken from BelStat (official website of the Register of Information Resources of Belarus).
The most positive balance is in trade with the Netherlands. And the most negative - with Russia, which means a very large import of goods.
The main export item of the Republic of Belarus is potash fertilizers, oil products and engineering equipment. And imports are energy resources and equipment.
The pharmaceutical industry and biotechnology are currently considered the most sought-after industries where foreign investment is made.
The economy of Belarus uses multi-vector. That is, the state establishes trade and economic relations with the countries of the West, the CIS and the third world equally.
USA and EU
There are certain difficulties with Western countries (USA and EU), in particular, due to sanctions, high consumer competition in this market and because of strict norms and standards.
CIS
In the market of the CIS countries, Belarusian goods are very competitive and are in great demand. However, trade in recent years has been declining. It is also worth noting that in 2015 Belarus, together with Russia, Kazakhstan and Armenia, joined the Eurasian Economic Union, which opens up new opportunities for trade, the movement of capital and labor. So far, these relations are not fully functioning due to the global crisis, but Belarus will soon be able to get some benefit from this agreement.
Third World Countries: Trade and Economic Relations
Third world countries is a completely new market for the Republic of Belarus. Its economy from these relationships is rapidly increasing its level. Local goods are successfully sold here, since there is practically no competition.
However, there are certain problems with logistics (more precisely, with its cost) due to the long distance. But political analysts believe that this market is quite beneficial to the state, since it is not always possible to work uninterruptedly with Western countries. That is why China, India, Brazil, Venezuela, Pakistan, the UAE and others became the main partners of Belarus.