It is now 1:02 am Wednesday, April 18, 2001 |
As part of the former Soviet Union, Belarus had a relatively well-developed industrial base; it retained this industrial base following the breakup of the U.S.S.R. The country also has a broad agricultural base and a high education level. Among the former republics of the Soviet Union, it has one of the highest standards of living. But Belarusians face the difficult challenge of moving from a state-run economy with high priority on military production to a civilian, free-market system.
The government is developing plans to privatize local and state enterprises through a voucher system, but progress has been slow. A Council of Ministers' decree allows privatization to proceed until Belarus' Supreme Soviet passes legislation. The government has continued to subsidize foodstuffs and other basic goods to prevent social strife. The economy remains dependent on Russia for energy supplies and raw materials. About 80% of Belarus' products are exported to Russia.
Economic activity in Belarus has stagnated, as businesses have awaited the outcome of talks on a monetary union with Russia, including negotiations over an exchange rate between Belarusian rubels and Russian rubles. Belarus has sought to join the Russian ruble zone in order to stabilize its currency and boost its trade links with Russia.
President Lukashenka pronounces his 1995 macro stabilization policies a success - annual inflation dropped from 2,220% in 1994 to 63% in 1997. But the International Monetary Fund (IMF) criticized his insistence on maintaining the steady exchange rate for the Belarusian rouble, which traded at 11,500 to the dollar from late 1994 until early 1996 then began climbing slowly toward its actual value. The IMF suspended Minsk's $300 million standby program in November 1995 until the government would agree to a devaluation of the rouble. The overvalued rouble has especially hurt Belarusian exporters, most of which now operate at a loss. In addition, the January 1995 Customs Union agreement with Russia - which required Minsk to adjust its foreign trade practices to mirror Moscow's - has resulted in higher import tariffs for Belarusian consumers; tariffs have risen from 5%-20% to 20%-40%.
CURRENCY: The official currency is the Rouble (BR) (also known as the Zaichik for the hare that appears on the one-rouble banknote), divided into 100 Kopecks. Worth about 1/10 Russian Rouble. US Dollar Exchange Rate: $1 US = BR 33,800 (official rate, April 1998)
GDP per capita: $4,700 (1995 est.)
GDP composition by sector:
Labor force: 4.3 million
Unemployment rate: 2.6% officially registered unemployed (December 1994); large numbers of underemployed workers
Agriculture: grain, potatoes, vegetables; meat, milk
Industries: tractors, metal-cutting machine tools, off-highway dump trucks up to 110-metric-ton load capacity, wheel-type earth movers for construction and mining, eight-wheel-drive, high-flotation trucks with cargo capacity of 25 metric tons for use in tundra and roadless areas, equipment for animal husbandry and livestock feeding, motorcycles, television sets, chemical fibers, fertilizer, linen fabric, wool fabric, radios, refrigerators, other consumer goods
Exports: $4.2 billion (f.o.b., 1995)
Imports: $4.6 billion (c.i.f., 1995)
External debt: $2 billion (September 1995 est.)