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Joint progect with "DELO (East + West) magazine
Editor-in-Chief: Victor Zhuk; Executive Editors: Alexander Kokcharov, Alexandr Togulev
Editorial office: Belarus & Business - Delo (East+West), 11 Masherova Ave., 220600 Minsk, Republic of Belarus, CIS. Tel.:(0375) 017 , , Fax.: (0375) 017 ,
BELARUS & BUSINESS (32 p.) is published quarterly.
Subscription at the editorial office of Belarus & Business.
Distribution: by subscription, at the embassies and trade representations of Belarus abroad, on the boards of Belavia, Lufthansa, Transaero (from Minsk).
(From The magazine BELARUS&BUSINESS, economic, social and political review)
B & B Contents:
INVITATIONS of B & B FOUNDERS:
Mikhail Marinich, Minister of Foreign Economic Affairs "Belarus is the Right Place for Doing Business"
Pavel Dzik, Minister of Finance "An Invitation to Cooperation"
Victor Zhuk Editor-in-Chief "On the Crossroads of Europe - Belarusian House. What is inside?"
POLITICS & ECONOMY
"Green Light to Investment." An interview with leonid Sinitsyn, Belarus' Deputy Prime Minister
Mikhail Marinich, Minister of Foreign Economic Affairs "The Invesment 'Climate' is Normal, and the 'Weather' is Going to Improve"
BUSINESS & LAW
Aspects of Belarusian Tax Legislation: Taxation of Foreign Enterprises
SOCIETY & ECONOMY
The Belarusian Economy Is in the Starting Gate
INVESTMENTS & BUSINESS
Chronicle of Interstate Agreements Signed by the republic of Belarus on Assistance and the Protection of Investments
Foreign Investors Open Their Accounts
Conditions of Investments in the Economy of the Republic of belarus
Required: Robinson Crusoes for the Blessed Isle of Capitalism
"Leather" Project
Your Problems Are Passing. An interview with Mr Riches
BUSINESS & MARKETS
Belarus Bank to be a Reliable Partner for Cooperation. by Vladimir Novic, Deputy Chairman of the Management Board of the Joint-Stock Saving Bank Belarus Bank
Timber Sales Liberalized
For All Your Banking Needs in Belarus
Belarusian Power Engineering Requires Renovation
EAST & WEST
Chronicle
Ford in Belarus
Belarus's Foreing Trade in 1995: Moderate Success
DOCUMENTS & COMMENTS
Destatization and Privatization program 1996
Regulation of Foreign Economic Activities
Free Economic Zones
REAL ESTATE & BUSINESS
Investment into Real Estate: The Time Has Come
COUNTRY IN TRHE HEART OF EUROPE
Belarus is a landlocked country in the center of Europe. It covers an area of 207.600 square kilometres. Belarus is bounded in the north and east by Russian Federation, in the south by Ukraine, in the west by Poland and in the north-west by Lithuania and Latvia.
Measured by its territory Belarus ranks thirteeth in Europe and its roughly the size of great Britain or Rumania. It stretches from south to north for 560 kilometres (350 miles) and from east to west for 650 kilometres (460 miles).
The larger part of Belarus is a lowland, drained by the Dnepr, the Western Dvina, the Pripyat and the Nieman. The country lies in the zone of mixed forest which covers a third of the of its territory. The climate is moderately continental and humid with temperature averaging -6 grad C (20 grad F) in January and +18 grad C.
The total population in 1995 was estimated at 10.3 million. Major ethnic groups: 78% - Belarusians; 13% - Russians; 4% - Poles; 3% - Ukrainians; 1% - Jews and 1% - others. Approximately 69% of the total population was urban. The average family is 3,2 persons, the life expectancy is 71 years.
The territory of Belarus is divided into six oblasts or regions. Each oblast is subdivided into districts, cities and other territorial and administrative units. The cities of minsk, Gomel, Brest, Vitebsk, Grodno and Moghilev are oblast centres of of the Republic. Six other cities have their population above 100 thousand inhabitants: Bobruysk, Baranovichi, Borisov, Pinsk, Orsha, Mozyr. The capital of the Republic of Belarus is the city of Minsk with the population of about 1,7 mln.
Belarus is a presidential republic. The state authority in the Republic of Belarus is formed and administered in three structures of power - legislative, executive and judicial.
Under the existing constitution (1994) the Supreme Soviet of the Republic of Belarus is the highest permanently acting representative and the unique legislative body of the state authority. President of the Republic of Belarus is Head of State and the Executive. The current President (since July 10th, 1994) is Alexander Lukashenko.
The Belarusian language is the language of the native population of the of Belarus. The Belarusian language uses Cyrillic letters. Over 14th to 17th centuries the language of Belarusians was the state language of the Great Duchy of Lithuania. Following the three divisions of the Rzech Pospolita (Poland) in 1772, 1793 and 1795 and the inclusion of the territory of belarus into the Russian empire the Russian language began to spread in Belarus. Until now the Belarusian language fails overcome a powerful influence of the Russian. The state languages of the Republic of Belarus are these both ones.
The industry's share in the total volum of production of the Republic of Belarus constitutes about one half. In 1995 the industrial sector included 1937 enterprises, 194 rented enterprises, 174 stock companies, 96 collective enterprises, 50 public organisations.
The major branches of industry in Belarus are following: the machine-building industry (mechanical endineering, machine-building, automobile production, metallurgy, tractor and agricultural machinery production), electronic industry ( electronic, radiotechnical, electrotechnical, optico-mechanicle and instrument-construction branches ), fuel, chemical and petrochemical industries. Also very important role play wood, wood-pupl and paper industry, construction materials production, light and food industries.
The area of agricultural land occupies more than half of the territory of the Republic of belarus. The number of workers employed in the agricultural sector was 877 thousand persons in January 1996 (20 per cent of total employment in national economy). The main directions of agricultural production in Belarus are diary farming, growing of potato, grains, flax, sugar beet, vegetaqbles, orchading is also spread.
FREE ECONOMIC ZONES
(By Yevgeny Medvedev)
In March of 1996 The Belarusian Goverment made one more step in the reformation of the national economy - the President signed Decree No114 titled " On Free Economic Zones on the Territory of Belarus".
The structuring of this document was strongly influenced by Presisident Alexandr Lukashenko's deep impressions about China's successes in the construction of " socialism with Chinese specifics". It was the Chinese model of economic reform by the creation of a dynamical "points of growth" in free economic zones (FEZs) that helped the authors of the decree formulate the methods and means for the establishment of a "Belarusian market-oriented socialism".
The issuance of this document is said to create favourable conditions for:
the economic development of regions in the Republic of Belarus;
the development of trade and economic cooperation with other countries;
the attraction of foreing invesments;
the creation of new jobs and, of cours,
the speeding-up of scientific and technical progress in the country.
The Decree stipulates that in the country a FEZ is a part its territory with strictly indicated administrative borders and and a special legal system, including privileges with regard to economic and other activites. it is stressed that in FEZs the state secures the protection of investments and incomes to investors and guarantees the unimpeded exercising of rights and liberties stipulated by legislation.
What specifically does the legal regime of a FEZ include?
First, certain favorable conditions for economic activities by Belarusian and foreing economic entities, in particular tax privileges, are established for each FEZ separately. This is backed by the fact that decisions on the establishment and liquidation of FEZs are to be made by the President (though the confirmation of the Statute of a FEZ has been entrusted to the Cabinet of Ministers).
Second, these are provisions in labour relations:
the minimum monthly wage in FEZs is fixed on the level of 120 percent of that in the contry (as of May 1996 approximately USD10);
employement allowance on level of an average monthly wage (approximately USD90);
the employment of workers from other regions and from abroad is to be carried out only on the consert of the FEZ's administration.
Third, a FEZ has the status of a free customs zone. This means that cargo shipment through its border requires compulsory customs registration. the government promises that in FEZs there will be simplified procedures of entrance and stay for foreign citizens and persons without citizenship. Let us leave aside questions concerning the procedure and reasons for the establishment of free economic zones: he who wants to address this has to consult with, as regards the expediency of such a step, first the Ministry of Foreign Economic Affairs and the Ministry of Economy, then the Cabinet of Ministers and finally the President. Let's better see with whom enterpreneus will have to deal with in the FEZs. The most authoritative body in a FEZ is its administration which is formed by Cabinet of Ministers. The FEZ administration above all carriers out all manner of state registrations of Belarusian and foreign economic entities, and as well registers economic entities and residents of the FEZ and the offices of non-residents. It is a great comfort that this omnipotent administration has no right to suspend or stop the activities of any economic entity which is a resident of the zone. To do this it will have to apply to court. It has no right to establish (to found or to be a co-owner of), legal entiteies. But the FEZ administration is the only lessor of land and other natural resources and property under republican and municipal owner-ship. It can be the initiator of advanced privatization and denationalization, though the final word here will rest with the Ministry for State Property Control and Privatization and, of course, the President. The FEZ administration as an organ of government implements the budget of the zone, including the organization of tax collection. In short the FEZ administrati8on is formed in addition to the existing local authorities and given part of its power both from them and frome some central government bodies.
The monetary and credit sphere of a FEZ is somewhate different. As was mentioned abouve, a zone has its own budget and currency fund though on the territory of the zone the national monetary unit of the Republic of Belarus will circulate. Banks and other financial and credit organization that want to act in FEZs are at first to be registered outside the zone according to the established procedure and as well, licensed by the National Bank for operations in foreign currency. They are then to be registered by the zone's administration as a resident.
This the general content of the presidential decree on FEZs. It is quite natural than one may ask where this decree is able to assist in the solution of the issues related dealing with free economic zones and answer many questions, in particular whether it will intensify the influx of foreign investments in the Republic. Unfortunately it is impossible to give any substantiated prognosis on the basis of the document itself. This is impossible above all becouse the decree provides a general outline of the legal status of FEZs; the specific mechanisms, specific legal rules regulating the process of economic activities in each zone were left to the discretion of the Cabinet of Ministers and the President himself. That is why the efficency of FEZs will depend to an important degree both on the local authorities and on the would-be residents of the zone, more precisely on their lobbying potential. The chief thing is so that the principle of equal opportunity and favourable conditions for all will not be violated, and that conditions in in the arena of market competition will not be adversely affected by protectionism, connections, go-ahead faculties and other non-economic factors in the solution of economic problems.
Your Problems Are Passing
AID FOR THE ORGANIZATION OF THE BELARUS - BASED INTERNATIONAL CONFERENCE ON INVESTMENTS IS RENDERED BY THE BRITISH KNOW-HOW FUND. ITS REPRESENTATIVE, MR. GEORGE RICHES, CHAIRMAN OF KURA TRADE & DEVELOPMENT LTD. GAVE AN INTERVIEW TO BELARUS & BUSINESS WHILE STAYING IN MINSK.
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- mr Riches, what are the guidelines of the Fund's activities?
- The fund is part of the structure of Kura Trade & Development Ltd where we have a department for assistance to embassies. this department renders aid to developing regions all over the world. At the present time we provide help in the countries of the former Soviet Union. For this purpose a special section named the Know-How Fund was established. It does not deal with financial aid, but with the introduction of new technoloies and an experience exchange in order to help the countries of the former USSR to a market one. I stress that we are dealing with consulting only, though we have funds and departments which also render financial aid.
- What is your impression of Belarus?
- Minsk seems to have a more lived-in look that other cities in the CIS. it is obvious however that Belarus is experiencing difficultties provoked by transition to a market economy. Your country is very painfully going through this period. But, taking into consideration its great potential one can have no doubt that transition to a market economy will be carried out quickly enough. Belarus is taking successful steps to come to a democratic market economy as soon as possible. I am sure that the conference on investment, which will take place in June, will contribute much to this - it will attract capital to Belarus.
- Do you think that Belarus cannot do without foreign invesments?
- In my opinion, foreign invesments will play the key role/ Without them it is impossible to carry out systemyc transfomations in the economy. the forthcoming confernce will allow Belarus to show business people in the West the investment potential of the country. This will be a very important forum, as capital will not come in without direct contacts. I hope that the conference will become a kind of prologue to close contacts between Belarus and the international financial community and international financial circles.
- What specific aid is being rendered by the Know- how Fund in the organization of the conference?
- We were asked to draw up the schedule of the conference, to structure it if Imay say so. The Fund has experience in the organization of such forums. we know what questions may be posed by foreign investors. We are compiling necessary information for them. We are doing everything possible so that nobody will waste time in Minsk.
- Does the Fund intend to continue cooperation with Belarus?
- Certainly yeas. we have already had some projects that have begun to work here thanks to the Fund's assistance. I am sure that it will be helpful as an "economic engine" in the future as well.

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