MINSK
Foreign direct investment (FDI) in Belarus rose by 6.6 percent year-on-year to $1.4 billion in 2020, despite challenges caused by the coronavirus pandemic, Economy Minister Aleksandr Chervyakov said.
The country’s main investor was Russia, followed by Cyprus, the Netherlands, Germany, and the United States in 2020.
“Belarus was among the few countries to have increased the inflow of net foreign direct investment last year,” Chervyakov told reporters. “That suggests that our economy has not lost its attractiveness and is still interesting for investors.”
Belarus places a priority on investments in pharmaceuticals, biotechnology, nanotechnologies and nanomaterials, metallurgy, mechanical engineering industry, production of machines, electrical equipment, home appliances and electronics, transport and related infrastructure, agriculture and food industry, information and communication technologies as well as creation and development of logistics systems and tourism.
Chervyakov said that the FDI structure had improved and the reinvestment rate exceeded 30 percent.
He also said that 56 new residents were registered in the country’s free economic zones and the Great Stone Industrial Park in 2020. The total volume of their declared investments made up some $280 million and created 2,500 new jobs.
The new investment projects, launched in 2020, are focused on the advanced processing of local raw materials, the minister said.
Belarus also highlights the preferential tax benefits and special investor incentives it provides for its six export-oriented and regionally located free economic zones, the IT sector-centric High Tech Park (HTP), and the joint Belarus-China Great Stone Industrial Park.
“We understand that in conditions of fierce competition for capital, it is necessary to create conditions that are at least no worse than those in the neighbouring countries,” Chervyakov said.
“We are working in this direction, carrying out extensive reforms aimed at improving the investment attractiveness,” he said, adding that tax and investment legislation was expected to be improved further.
The U.S. Department of State said in its 2020 Investment Climate Statement that investments in sectors dominated by state-owned enterprises have been known to come under threat from regulatory bodies.
“Investors, whether Belarusian or foreign, purportedly benefit from equal legal treatment and have the same right to conduct business operations or establish a new business in Belarus,” it said.
“However, according to numerous sources in the local business community and independent media, selective law enforcement and unwritten practices can discriminate against the private sector, including foreign investors, regardless of their country of origin.”
The State Department said that serious concerns remained about the independence of the judicial system and its ability to objectively adjudicate cases rather than favour the powerful central government.