MACROECONOMIC CLIMATE AND SOCIAL-AND-ECONOMIC DEVELOPMENT PROSPECTS

.JPGDuring 2012 the economic growth was procured at a sufficiently high positive level. A basis of such economic growth is a dynamically developing industrial complex. Over 2012 the index of the industrial production growth amounted to 106,3%.

There has been a growth of the production of oil products, coke, and nuclear materials in 4,8 times, mobile machinery and facilities 115,8 %, leather, leather products and footwear 101,5 %.

For January-December 2012 the Citys companies attracted direct foreign investments on net basis amounting to USD 728,1 mio. with an annual assignment equal to USD 296,0 mio.

In 2012 the organizations and companies of all forms of property built 14 360 new flats (in 2011 - 14 974 flats). 1 047,7 thou. sq.m. of residential floor area were put in operation, which is 104,8% as compared to an annual assignment and 104,8% of 2011 level.

An average monthly earnest for January-November 2012 totaled to Br 4 655,2 thou. (which is 195,3 % as compared to a similar period of 2011.).

The employment level in Minsk is the highest in the country and in January-November 2012 it was 1075,8 thou. people.

The prospects of the countrys social and economic development are related to the standing positive tendencies in the countrys economic development, continued upgrading its national economy and adapting thereof to new challenges in the world market. The countrys major objectives of its social and economic development for the moment will be: continued macroeconomic stabilization and tax policy improvement (primarily streamlining and reducing tax burden), GDP energy content reduction, upgrading the monetary and pricing policy, developing the entrepreneurship and sphere of services, housing industry, minimizing the world financial, crisis consequences).

In 2012 14 organizations were involved in implementing of 20 projects within the framework of the Government Program of the innovation development of the Republic of Belarus for 2011-2015 years, the completion of which requires over Br 218,0 bln.


INVESTMENT DEVELOPMENT

The organizations and companies in Minsk used Br 36202,2 bln. of investments in 2012, which is 98,1 % in comparable prices to the level of 2011 .

A growth rate to fixed assets as per the group of organizations with a share of the municipal property was 110,0% with the investment volume equal to Br 10619,8 bln., as per the independent legal entities 92,9 % and BLR 15448,6 bln. respectively.

In 2012 Br 15679,6 bln. or 117,1 % as compared to the level of 2011 was spent for purchasing the machinery, facilities and transport means. A share in the total volume of investments was equal to 43,3%. Major financing sources are: own funds of organizations-31,8%, budget funds- 26,0%, bank loans-16,5%.

INVESTMENT CLIMATE. MOBILIZING DIRECT FOREIGN INVESTMENTS

A strategic objective of Minsk investment policy consists in mobilizing and efficient use of investment resources for implementing the national priorities and restructuring the economy in accordance with the demands of the domestic and foreign markets directed to procuring worthy living standards for the countrys population.

The territorial location of foreign investments in recent 5 years is characterized by clearly defined concentration thereof in Minsk.

A priority direction in the investment policy remains mobilizing investment resources in the industrial sphere and centralizing thereof in implementing investment projects based on science-intensive and resource-conscious production technologies of export and import-substituting directional effect. Such projects shall be implemented with government support in the forms set forth by the existing law. In the building complex it is envisaged to mobilize investments in the export-oriented import-substituting productions, in the housing development, as well as for developing and implementing resource-conscious and energy-saving production technologies.

The one window principle started to function in Minsk as a novelty at the end of 2012 when cooperating with investors and this principle is providing for an opportunity to serve a package of documents preliminary examined by the Advisory Council. This will make it possible to further accelerate signature of investment agreements, as well as to eliminate unauthorized contacts of officials of Minsk city Executive Committee with investors by restricting thereof by the framework of the Advisory Council , Investment Activity Committee, meetings with the participation of managers of Minsk city Executive Committee and/or Minsk district administration offices, managers of structural divisions of Minsk City Executive Committee, Minsk municipal bodies.

There has been systemized the work on defining free land plots to be offered to potential investors. For each land plot town-planning passports are developed.

Minsk city Executive Committee has started implementing in practice the principle of fairness of land plots providing for the offering to potential investors land plots for signing investment agreements within the framework of Decree No. 10 not earlier than in 3 business days following placing relevant data on such land plots in Minsk City Executive Committees the web-site.There has been prepared a draft Resolution of Minsk City Executive Committee related to the upgrading the investment activity in Minsk which specifies the criteria required for signing investment agreements and materially extends the lists and grounds for conducting land plots auctions

Currently one can define the following factors of the attraction of the countrys economy as investment:

  • advantageous geographical setting between the European Union and Russian Federation, access to the Customs Unions countries;
  • A high-skilled labour force and material scientific and technical potential;
  • an extensive network of transport communications and infrastructure (two Pan-European transport corridors);
  • A stable social and political environment , no regional or national conflicts;
  • An export-oriented economy (over 60% of GDP goods are exported);
  • A low level of criminality and corruption;
  • One of the leaders of CIS countries in respect to the economic development level and rate;
  • The availability of 6 free economic zones and a HI-Tech Park;
  • The Advisory Council activities in respect to foreign investments and those of the National Investment Agency;
  • A developed industrial, scientific-and-technical and export potential. Currently over a third part of the GDP production volume is procured by the Industrial Complex.
Alongside with the stable inside political situation, low level of criminality and corruption, no conflicts of inter-national or religious nature such indicators are promoting a growth of the number of investors to the countrys economy with every year. In Belarus there have been generated favourable legal conditions for operation of investors. According to the International Financial Corporation involved in the investment climate analysis in various countries the Belarusian investment legislation deserves high estimate and is one of the best among CIS countries.

A framework document defining general terms and conditions for exercising the investment activity in Belarus is the Investment Code directed to the promotion of the investment activity and protection of the investors rights in the countrys territory.

Foreign investors are guaranteed the right of property and other rights in rem, as well as legally acquired property rights. And, the main thing irrespective of a form of property investors are guaranteed equal, without any discrimination, protection of their rights and lawful interests. Pursuant to the existing law investors are independently involved in all actions subsequent upon possession, use and disposal of the facilities and results of the investment activity. In particular they may dispose of investment profits, including reinvest thereof in the territory of Belarus and, after paying taxes and effecting other compulsory payments, easily take them outside the countrys territory.

A factor of no little significance is the fact that investments may not be nationalized or placed in requisition without compensation. Such processes are possible only with timely and complete compensation for not only of a value of an investment property, but also other damages caused thereby.

When implementing separate investment projects important for our countrys economy with an investor there may be signed an investment agreement establishing additional legal guarantees and advantages of the Republic of Belarus thereunder stipulated for a validity period thereof. For promoting business Minsk City Executive Committee annually develops target programs directed to small business support, including direct lending, partial compensation for damage when paying interest for using bank loans, partial reimbursement of expenses when effecting leasing payments With a view to promote the business there has been incorporated a Center for entrepreneurship support and two Incubators of small business.

A free economic zone providing preferential conditions Minsk free economic zone is running.

The growth prospects for its economy the city reconciles with the innovation development and mobilizing all information resources. A high-skilled manpower possesses enough operational experience.

Of 1000 people employed in the real economy sector 450 are PhD and MBA degree holders. Such high skills of the employees are achieved owing to put in place training system operative in such economy branches as motor industry, tractor and agricultural machinery, optics, radio electronics, precision instrument-making and others.

Minsk is an attractive, safe and, the main thing, promising and advantageous place for foreign investments, it is preferred by investors from many countries, including Russia, Switzerland, Austria, Germany, the Netherlands, etc.