1. Read the text and identify the current economic trends and issues that Belarus is facing. Recent economic trends and problems

As part of the former Soviet Union, Belarus had a relatively well-developed industrial base, but it is now outdated, inefficient, and dependent on subsidized Russian energy and preferential access to Russian markets. The country’s agricultural base is largely dependent on government subsidies. Following the collapse of the Soviet Union, an initial burst of economic reforms included privatization of state enterprises, creation of private property rights, and the acceptance of private entrepreneurship, but by 1994 the reform effort dissipated. About 80% of industry remains in state hands, and foreign investment has virtually disappeared. Several businesses have been renationalized. State-owned entities account for 70-75% of GDP, and state banks make up 75% of the banking sector.

Economic output declined for several years following the break-up of the Soviet Union but revived in the mid-2000s. Belarus has only small reserves of crude oil and imports crude oil and natural gas from Russia at subsidized, below market, prices. Belarus derives export revenue by refining Russian crude and selling it at market prices.

Russia and Belarus have had serious disagreements over prices and quantities for Russian energy. Beginning in early 2016, Russia claimed Belarus began accumulating debt – reaching $740 million by April 2017 – for paying below the agreed price for Russian natural gas and Russia cut back its export of crude oil because of the debt. In April 2017, Belarus agreed to pay its gas debt and Russia restored the flow of crude.

New non-Russian foreign investment has been limited in recent years, largely because of an unfavorable financial climate. In 2011, a financial crisis lead to a nearly three-fold devaluation of the Belarusian ruble.

The Belarusian economy has continued to struggle under the weight of high external debt servicing payments and a trade deficit. In mid-December 2014, the devaluation of the Russian ruble triggered a near 40% devaluation of the Belarusian ruble. Belarus’s economy stagnated between 2012 and 2016, widening productivity and income gaps between Belarus and neighboring countries. Budget revenues dropped because of falling global prices on key Belarusian export commodities. Since 2015, the Belarusian government has tightened its macro-economic policies, allowed more flexibility to its exchange rate, taken some steps towards price liberalization, and reduced subsidized government lending to state-owned enterprises.

Belarus returned to modest growth in 2017, largely driven by improvement of external conditions and Belarus issued sovereign debt for the first time since 2011, which provided the country with badly-needed liquidity, and issued $600 million worth of Eurobonds in February 2018, predominantly to US and British investors.

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WRITING

1. Write a letter to your penfriend telling about your last visit to your native town or village and describing your favourite sight there.

2. Read the following text, entitle it and then write an abstract of its contents.

In 2008, the Belarusian government approved of a list of 519 state-controlled companies subject to privatization by way of share issue with further sale of stakes in 2008-2010, and a list of 147 open joint stock companies with state stakes to be sold in 2008-2010. The government approved the lists by its resolution dated July 14, 2008.

Among the 176 state-run companies to be privatized as early as 2008 are Minsk Motor Plant (MMZ), Minsk Automobile Plant (MAZ), Termoplast plant, Vavilov plant, Belgaztechnika, Baranovichi auto component plant, Rogachev-based Diaprojector plant, Promsvyaz, Belarusian ocean company, NIIEVM, 558th aircraft repair plant in Baranovichi, Borisov medications plant.

Belarus plans to privatize 213 state-owned companies in 2009, including Gomselmash, BeIAZ, Minsk Wheeled Tractor Plant (MZKT), Vityaz, Agat-Sistem, Belgosproject institute, Electronica plant, Gomeltransneft Druzhba, Novopolotsk-based Druzhba oil transport company, Tsvetotron, Giprosvyaz, Transaviaexport air carrier, and DORORS trading company with Belarusian Railway.

In 2010, it is planned to privatize Minsk P.M. Masherov automated lines plant, Minsk research institute of radio materials, Orsha flax factory, Belavtostrada, Minsk electromechanical works, Baranovichi cotton factory, amongst others.

The list of open joint-stock companies in which shares will be sold in 2008-2010 includes Gomelsteklo, Kolas printing factory, Minsk Bearings Plant, Glubokoe cannery, Brest carpets, Svitanak, and Barkhim.

The government ordered state authorities to submit to the State Property Committee proposals as to the size of state stakes in enterprises on the list that will be sold to investors, as well as mechanisms to sell them. Local administrations will have to indicate conditions for auctioning state enterprises and present their statements of affairs as of 1 January 2008.

The State Property Committee will be using the proposals to draft presidential instructions to sell state stakes in open joint-stock companies by 1 May 2009 and 1 May 2010.

The original list, including 240 companies, had to be coordinated with 26 state agencies, but the government dismissed it, because to transform all enterprises subject to reform under presidential decree #7 in just three years was too short a time.

Since privatization started in 1994,1,097 state-owned enterprises have been denationalized. Most of these were transformed in the mid-90s. Privatization was virtually suspended in the late 1990s. The change in ownership patterns quite often failed to replace the owner. Most denationalized enterprises were turned into open joint-stock companies - 911 of 1,097, including 362 companies in which the state retained stakes exceeding 75%, 72 companies with state shareholdings between 50% and 75%, 117 companies with state stakes between 25% and 50% and 84 businesses with state-controlled shareholdings below 25%.

Only 310 companies were free from state control. The rest of the 1,097 transformed companies were denationalized .

SUPPLEMENTARY READING

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