OREANDA-NEWS. February 24, 2010. In 2010 Belarus is set to raise US2.7 billion in foreign capital investment, Vice-Premier of Belarus Andrei Kobyakov said at a session of the permanent committee at the Advisory Council for Foreign Investments under the Council of Ministers of Belarus.

“The main investment goal for 2010 is to boost the volume of foreign capital investment Br7.7 trillion, or US 2.7 billion. We think this goal is reachable,” said Andrei Kobyakov.

In 2009 the volume of capital investments was up 8.6% over 2008 accounting for 31.5% of GDP. According to the Vice-Premier, the volume of foreign investments including foreign direct investments has been continuously growing in Belarus. In 2009 the real production sector attracted US 9.3 billion worth of foreign investments including US 4.8 billion of direct investment. In 2009 Belarus’ biggest foreign investors were Russia accounting for 65% or \\$6 billion, Austria - 10%, Cyprus - 6%, Great Britain - 5%, Switzerland - 4%.

Today there are 5,000 commercial organizations with foreign capital including around 60 affiliates of transnational corporations in Belarus. The number of them is constantly growing. According to Andrei Kobyakov, their number is not significant so far. But Belarus will be working to increase it. The organizations with foreign capital make a significant contribution to the total export of the country. In 2007, the share of the organizations with foreign capital accounted for 20% of exports, in 2008 – more than 30%. According to the Vice Premier, in 2009 Belarus managed to attract US 9.3 billion in many ways owing to the organizations with foreign capital.

According to Andrei Kobyakov, the goal of the current session is to inform the Belarusian and foreign investors about the efforts to liberalize the national economy and create the favorable business environment.

He also noted that being an open economy, Belarus was hit by the global economic crisis. “The crisis has affected the demand for the basic kinds of Belarusian products and aggravated the problem of non-payments,” the Vice Premier underscored. Belarus has undertaken a number of systematic multistage anti-crisis measures in all sectors of the economy to support the domestic market and help Belarusian manufacturers remain competitive on foreign markets.” Primarily, Belarus has undertaken tough measures to support the financial system of Belarus, pursue a strict fiscal policy, and preserve the bank liquidity.

Belarus has created favorable conditions for the registration of economic entities, adjusted the audit activities, and improved the tax laws (the Special Part of the Tax Code has come into force). In 2009 the customs legislature was improved as the Customs Union of Belarus, Russia and Kazakhstan was established. Apart from that, Belarus provided investors with additional investment protection guarantees. To this end, Decree No10 and a number of other regulatory legal acts have been adopted.

The steps towards the liberalization of Belarus’ economy have not gone unnoticed, Andrei Kobyakov said. Belarus has moved from the 85th up to the 58th position in the World Bank Doing Business rankings. Andrei Kobyakov expressed his hope that the Government will accomplish the assigned task and Belarus will make it to the top 30 of the most favorable business destinations. Belarus will keep carrying out reforms to achieve this goal.

A plan for future liberalization of business activity in Belarus will be adopted soon, Deputy Economy Minister Andrei Tur said at a session.

“This year we set quite an ambitious goal: Belarus should become one of the top thirty countries with the best business terms,” said Andrei Tur. “We have prepared a plan for future liberalization of the economy in 2010. The plan is under review and will be adopted soon. It covers all aspects of our development and touches upon licensing, registration, pricing, auditing, labor market liberalization”. The liberalization plan will also include matters relating to investments and property relations. That means that Belarus will continue the step-by-step efforts launched in 2007 to liberalize business activity.

“Step by step, we continue working, understanding that many things, primarily, all the matters relating to overcoming administrative barriers, cannot be settled within one day,” remarked the Deputy Economy Minister. Belarus expects that foreign partners will appreciate positive results of the economic reformation. The 19 February session of the Foreign Investment Advisory Council will also contribute to the inflow of foreign investments. “It is very important for us because the year is not a simple one. Not all the foreign markets that we operate on have overcome the external phase of the crisis,” added Andrei Tur. “This is why we can compensate for certain losses in the export policy by investment activity, primarily, foreign investments”.

According to the Deputy Economy Minister, this year is also a complicated one because it ends the five-year period. Besides, 2010 has been declared the Year of Quality. This is why serious investment support is required to achieve this year’s goals. The ongoing fixed-capital renovation process and innovation development need the latest technologies.

Licenses on 16 types of businesses will be canceled in Belarus. This step is envisaged in the draft decree on licensing certain types of businesses which is currently being coordinated by the Presidential Administration, Andrei Tur told.

According to Andrei Tur, the business community of Belarus would want to see the list of licensable businesses reduced. “We propose to abolish 16 types of activities, 7 of which comprise 59 works and services. We also suggest abolishing around 60 positions regarding works and services which make part of other 13 licensable businesses which will remain in force,” Andrei Tur said. Two licensable activities will be united into one. Licenses will be introduced in the field of nuclear power, sources of ionizing radiation. Andrei Tur stressed that licensing in nuclear power is an international practice.

All in all, some 37 types of licensable businesses will remain in force. As of today, 53 types of activities are licensable. In addition, the document envisages the adjustment of the list of works and services that constitute the respective types of activities (the would-be list will include 210 items positions of 331). If such measures are undertaken, the number of licenses issued in Belarus should dwindle by 62% or 63%. Today, almost 40% of the licenses in Belarus are issued to retail business.

On the whole the document envisages a complex adjustment of licensing activities. It is the first time that both general terms of licensing and requirements for each licensable activity are compiled into a single regulatory act. This document contains the list of licensable types of activities. In addition, the draft document envisages simplification of the licensing procedures. The timeframe for these procedures is supposed to be reduced to 15 office days (it is a month today). There are plans to ban the suspension, termination and revocation of a license on the grounds that are not related to the licensed activities.

The list of commodities, prices for which are regulated by the government, will be curtailed in 2010 by amending decrees No 285 and No 943, Deputy Economy Minister said.

Andrei Tur remarked, last year several measures were taken to liberalize pricing in Belarus. “Yet the measures are not final. Pricing liberalization efforts will continue in 2010. There are plans to curtail the list of commodities, prices for which are regulated by the government, by amending decrees No 285 and No 943.” The requirement to carry out mandatory economic calculations for prices and tariffs in use will be removed, except for the commodities the government sets prices for. Apart from that, fines for breaking pricing regulations will be reduced while administrative procedures and paperwork will be simplified. According to Andrei Tur, there are no plans to limit price changes in Belarus this year just like last year.

Speaking about the pricing liberalization measures that have been taken, Andrei Tur said that the practice of free pricing has been extended, prices for new goods and services, except for medical ones, no longer have to be registered. The list of prices regulated by government agencies has been extended. In addition, last year the government largely reduced the list of exports, prices for which are regulated by the government. The list of social services, prices for and tariffs on which are regulated by the Economy Ministry and local authorities, has been reduced. Last year Economy Ministry resolution No 141 considerably increased the number of commodities entitled to free markups. At present the Belarusian government regulates markups for a total of 50 socially vital commodities.