Belarus

In-depth country-focused analysis on Belarus's economic, political and operational risk environment, complemented by detailed sector insight

Belarus

Our comprehensive assessment of Belarus's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Belarus, as well as the latest industry developments that could impact Belarus's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Belarus before your competitors.

Country Risk

Belarus Country Risk

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Core Views

  • The Belarusian government looks set to make only token electoral reform measures ahead of the upcoming parliamentary elections, which it hopes will display reform progress to Western observers while also maintaining its tight grip on power and relatively low level of political unrest. However, a more united opposition poses a significant risk to this balancing act.

  • While relations between Belarus and the EU continue to thaw, further progress is likely to improve only gradually. Any perception by Russia of encroachment from the West could result in a Russian attempting to tighten its grip on its main ally in the region. Meanwhile, overarching reliance on Russia for economic support, together with the fact that public opinion in Belarus still heavily skewed against the EU, due in large part to state control over the media, suggest that the EU's approach will...

Belarus Operational Risk Coverage (8)

Belarus Operational Risk

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BMI View : The dominance of the Belarusian state across all sectors of the economy and its dependence on Russia for trade and economic assistance is a major deterrent to investors. Businesses currently benefitting from inexpensive utility costs due to cheap Russian oil and gas are at risk of experiencing a cut to supplies in the event of deterioration in relations with Moscow. We highlight that trade and economic diversification remains poor and reliant on Russia and the hydrocarbons sector, where both elements bear significant downside risks in the medium term. Companies also face high costs to trade due...

Belarus Operational Risk

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BMI View: There are considerable risks to investors due to crime in Belarus. Although foreigners are rarely the specific targets of violent crime, petty theft is common and the police force is considered highly corrupt, which exacerbates concerns. There is also a growing risk from cybercrime as well as financial crime that the Belarusian police force lacks the capacity to tackle. We do note, however, that there is very little risk of a terrorist attack in Belarus and interstate conflict risks are also low. This helps to improve the country's performance on the BMI Crime and Security Risk Index and Belarus is therefore ranked 16th out of 31 Emerging Europe states with a score...

Belarus Labour Market

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BMI View: Businesses face salient risks in Belarus' labour market owing to a shortage of suitable labour and high labour costs. The dearth of economic opportunities has resulted in many of the country's highly skilled graduates seeking opportunities abroad. High emigration figures combined with Belarus' shrinking population dynamic mean that employers will have to bear additional costs to incentivise highly skilled Belarusians to remain or return to the country, or for the importing of foreign labour. This exacerbates the already significant labour costs in the country due to the...

Belarus Logistics

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BMI View: The transport network in Belarus is extensive, though more remote areas of the country are less accessible and there is a considerable risk of congestion and delay due to the heavy reliance on limited motorways and rail routes. Utilities costs are low in the country, which does reduce operational costs, though reliance on imports of gas and oil from Russia does leave businesses in Belarus vulnerable to supply interruptions. There are also substantial costs arising from trading across borders due to excessive trade bureaucracy, hampering imports and exports. Overall, therefore, Belarus has a score of 53.3 out of 100 on the BMI Logistics Risk Index, placing 15th out of 31 Emerging Europe states and 79th out of 201 states on a global basis.

The greatest logistics risks to investors in Belarus stem...

Belarus Trade & Investment

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BMI View: Investors considering establishing a business in Belarus face significant hurdles. The domestic economy is hampered by high levels of state intervention and heavy reliance upon Russia as a trading partner, which exposes firms to economic shocks in Russia and threatens future domestic growth prospects. Furthermore, weak oil prices have had a negative knock-on effect on the price of refined fuel, dampening export growth prospects further as firms buckle under the pressure of a high import burden compounded by currency weakness. The government of Belarus has committed to liberalising the banking sector, expanding cluster...

Belarus Industry Coverage (5)

Defence & Security

Belarus Defence & Security

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BMI View: Throughout 2016, we expect Belarus to continue to align its security and economy with Russia, even though the former has begun deepening its diplomatic links with Western Europe. We expect defence spending to remain limited over the medium term due to low threats from domestic unrest, terrorism and interstate conflict as well as difficult economic conditions. New procurement will continue to focus on the aerospace segment, in line with the government's stated goal of building up the Belarusian air force. Due to the limited production capabilities of domestic manufacturers, contracts for aircraft and air defence systems will be awarded to foreign companies - predominantly from Russia.

In 2016 we expect the Belarusian...

Food & Drink

Belarus Food & Drink

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BMI View: The Belarusian food and drink industry will grow at constrained rates as economic conditions remain dire in the country. Household consumption will remain weak as consumer purchasing power is eroded by rising inflation, currency devaluations and the escalation of wage arrears.

Headline Industry Data

  • Food consumption value (local currency) growth year-on-year (y-o-y) in 2015: +16.6% (-14.2% in USD terms); compound annual growth rate (CAGR) 2014-2019: +19.1% (2.7% in USD terms).

  • Per capita food consumption value (local currency) growth (y-o-y) in 2015: +17.2% (-13.7% in USD terms); CAGR 2014-2019: +19.7% (+3.2% in USD terms).

  • Alcoholic drinks value (local currency) sales growth y-o-y in 2015: +29.1% (-5.0% in USD terms); CAGR 2014-2019: +21.8% (4.6% in USD terms...

Medical Devices

Belarus Medical Devices

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BMI Industry View: The Belarusian medical device market is under-developed and heavily reliant on imports. Per capita device expenditure is one of the lowest in Europe at USD43. The outlook for the Belarusian medical device market is mixed, with robust growth projected in local currency terms, but due to the depreciation of the Belarusian ruble, the market is forecast to grow at a slow pace in US dollar terms over the 2014-2019 period.

Headline Industry Forecasts

  • We anticipate medical device market growth at a CAGR of 2.5% in US dollar terms over the 2014-2019 period,...

Pharmaceuticals & Healthcare

Belarus Pharmaceuticals & Healthcare

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BMI View: Despite high forecasted growth in pharmaceutical sales and healthcare expenditure, Belarus will fail to attract investment from foreign pharmaceutical firms. Government policy to promote the use of domestically-produced medicines will cause a slowdown in pharmaceutical imports and the country's investment appeal will be further dampened by an unstable currency and rising regional political tensions.

Headline Expenditure Projections

Pharmaceuticals: BYR10,405bn in 2014 (USD1.02bn) to BYR12,247bn (USD801mn) in 2015; +17.7% in local currency terms and -21.2% in US dollar terms.

Healthcare: BYR48,816bn (USD4.76bn) in 2014 to BYR60,395bn (USD3.95bn) in 2015; +23.7% in local currency terms and -17.1% in US dollar terms.

Risk...

Telecommunications

Belarus Telecommunications

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BMI View: Hyperinflation has plagued Belarus in recent years and the recent devaluation to the rouble has made it difficult for operators to affordably source new SIM cards and handsets. International call termination rates have also spiked upwards quite sharply, putting operators under considerable financial pressure. The launch of beCloud's 4G network in late 2015 will allow low-cost advanced services to be deployed, but its wholesale services model could prove unsustainable if third parties cannot afford to interconnect with it.

Strong 3G Uptake Linked To Low Prices
Belarus Mobile Market Forecasts
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Latest Belarus Articles

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Latest Belarus Blogs

  • BMI Research regularly carries out scenario analysis of 'low probability-hi...

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