Sectors of Economy

Mechanical engineering and metalworking are the leading industries. Supplying a quarter of the mechanical engineering output, automobile production is the largest branch of the national mechanical engineering industry. Minsk Automobile Plant (MAZ trademark) and Belarusian Autoworks (BelAZ trademark, the town of Zhodino) are the key companies.

The national tractor and agricultural machinery engineering can almost fully satisfy the need of the Belarusian agribusiness for the necessary machines and equipment. The industry comprises over 40 companies specialized in designing and manufacturing tractors and agricultural machines. Minsk Tractor Works (MTZ trademark) is one of the world’s eight largest tractor producers, which accounts for 96% of the international tractor sales. MTZ exports the make to more than 60 countries.

Belarus also produces building, road construction machines and machines for municipal services, equipment for trading and public catering companies, household appliances.

Belarusian mechanical engineering companies offer a wide range of sophisticated consumer goods such as TV sets, refrigerators, washing machines, and others. TV sets made by Horizont and Vityas as well as refrigerators Atlant are known far abroad. The industrial potential of sophisticated mechanical engineering industries is represented as well by instrument making industry, electrotechnical industry, radio technical, electronic, optical mechanical industries.

Chemical and petrochemical industry is one of the largest branches of the Belarusian economy. Belarus is one of the world’s largest producers and exporters of potash fertilizers.

The national fuel and energy industry extracts, transports, stores and distributes all kinds of energy resources: natural gas, oil and petroleum products, solid fuel, electric and heating energy. Belarus has proprietary small oil reserves and is reliant on oil and gas supplies from Russia. The Druzhba oil pipeline is a major transit corridor used to transport Russian oil and is a continuation of the system of trunk oil pipelines of Russian company Transneft. Beltransgaz distributes and transports natural gas across Belarus. The company also serves the Belarusian section of the transcontinental gas pipeline Yamal-Europe owned by Russia. Belarusian specialists also started working for a Belarusian-Venezuelian prospecting seismology joint venture SeismoVenBel. In 2007 the sides started setting up a joint venture for extracting oil in Venezuela.

The core of construction industry is made up by the companies producing construction materials as well as glass and faience, forestry and woodworking, mechanical engineering and metalworking enterprises. The Belarusian companies produce materials and articles to erect buildings meeting all European durability and design standards.

The forest sector in Belarus has a significant impact on the economy. The country has become a significant roundwood exporter to the Baltic countries and to Europe, providing low-cost raw materials for their industries.

Light industry unites more than 10 branches. In terms of production volume, textiles companies take the leading position in the structure of this industry. They manufacture all types of fabrics and knitwear. The second most important industry sector is the sewing industry which unites more than 250 companies.

The agricultural sector is an important branch of economy and the principal component of the agro-industrial sector of Belarusian industry. Enterprises of various forms of ownership specialize in production of agricultural goods: agricultural companies, farms, household plots, etc. Although large farms, formerly collectives, have been preserved in Belarus, there are over 2,000 private farms. Large farms produce 53% of the nation’s agricultural output.

The Belarusian agribusiness sector includes such subsectors as farming industry (crop and animal husbandry), processing industry (food processing, primary flax processing), service sphere (land management, construction, trade and other services). The agrarian sector is divided into cattle breeding and plant growing. Cattle-breeding companies produce more than half of the total livestock output. One of the most rapidly developing industry sectors is poultry farming.

There are 89,800 square kilometres of farmland in Belarus including 55,400 square kilometres of arable land. But a short growing season and a lack of fertile soil make farming difficult. Four fifths of arable land is constituted by acid soil which needs constant improvement. Besides, the 1986 explosion at the Chernobyl nuclear power station in Ukraine contaminated much of the soil in southern Belarus, reducing the country’s total area of arable land by more than 10%.

Grain farming companies mainly produce barley, rye, oats, winter and spring wheat. Belarus is one of the seven world leading potato producers and tops the list of the countries in terms of potato production per capita. The country has about 16% of the world area under flax. The climatic conditions in Belarus are favourable for sugar beet cultivation. The country can completely satisfy the domestic demand for sugar. More than 1,000 agricultural companies and about 3 million private households and farms grow vegetables.

The processing branch stands second in terms of output in the structure of Belarus’ agricultural industry. One of the most important components is food industry, which is divided into 20 sectors. Meat and milk branches take the leading positions in the structure of the industry, which also unites bread-making, sugar, confectionary, wine-making and fish sectors.

Belarus can completely satisfy the needs of the population for meat and milk products. But the country has to import vegetable oil, fish and fish products, vegetables and fruit to meet the domestic demand.

Service system is developed in Belarus unevenly. Infrastructure and services are more developed in the big cities of the Republic. In the year of 2008 this sector of economy generated 42-43% of the total GDP.

Belarus’ favourable geographical position helps to build up high transit potential of the country’s transport communications. Transport infrastructure of Belarus is well integrated into similar infrastructures of the CIS countries. It includes a fairly developed network of automobile, rail, air and pipe communications.

The automobile public transport in Belarus is well developed and plays a great role in passenger transportation. Public railways in Belarus make 5,500 kilometres including 900 kilometres electrified. The railroad and the railroad transport are monopolized by the state. Belarus is at the crossroads of air routes from Asia to Western Europe. Nowadays Belarus has several well-equipped airports including international ones, the largest of which is Minsk-2.

For the purpose of developing effective foreign trade in the country, appropriate infrastructure is being established. Such infrastructure contributes to the establishment of mutually beneficial business contacts, development of industrial and commercial links, attraction of investments, and new technologies.

A great number of goods produced by Belarusian industries and agriculture are oriented towards the CIS countries’ markets. The largest trading partner of Belarus is Russia, the largest supplier of raw materials to Belarus and the largest consumer of Belarusian investment, chemical, and food products.

The EU is Belarus’ second main trade partner, accounting for almost one third of its overall trade. The main export items from Belarus to the EU are mineral products, petrochemicals and fertilizers, textiles and textile goods, wood and wood products.

The major import and export items are mineral products, machinery and equipment. These sectors contribute 57.9% to total exports and 60.5% to imports. Belarus exports more than 90 % of its car and tractor output, 83% of its machine tool output, 88% of its refrigerator and freezer output, and around 90% of its television and potash fertilizer output.

Global financial and economic crisis caused Belarus less damage than the USA, Russia and other countries in Europe. Smaller impacts are related to smaller, in comparison to many other countries, amount of foreign loans and investments, and incomplete reforms in the domestic stock market.

A key negative effect of the global economic crisis featured a decrease of the demand for the Belarusian goods on foreign markets and of the amount of loans and investments from abroad. To help mitigate the impacts of the crisis, the Government adopted a plan of economic liberalization measures and a set of measures to support major industrial enterprises.

In the year of 2008 some major steps were taken to opening up the country to foreign investors, and improving the investment climate in general. The efforts made resulted in the debut of the Republic of Belarus among the TOP-10 reformers according to the World Bank’s “Doing Business – 2009” report as well as in the significant ranking advance in FDI (Foreign Direct Investment) attraction according to the “World Investment Report 2008” issued by the United Nations Conference on Trade and Development.