Policy Studies

Policy Study 02/2018

Diversification of Belarusian Exports: The Potential of Machinery Exports on Non-Traditional Markets

Belarus is an open economy, with exports exceeding 50% of GDP. Within the basket of export goods, machinery and equipment exports play an important role. In 2017, they amounted to USD 5.3 bn, which implies a share of 18% in total goods exports. Vehicles are the largest category of Belarus machinery exports, accounting for 43% of total. This includes vehicles for the transportation of goods, tractors and motor cars. However, the geographical structure of machinery exports is – in line with the overall export structure – highly concentrated. Belarus’ traditional export destinations are the Eurasian Economic Union EAEU (including the Russian Federation), the CIS (outside the EAEU) and to some extent the EU. Taken together, these markets absorb a whopping 93% of Belarusian machinery exports.


Policy Study 01/2018

Strategic Options to Improve the Effectiveness of Investment Promotion Agencies (IPAs)

Not only competition between locations, but also between IPAs has significantly increased in the recent past. Taking into account international best practice, this policy study assesses strategic options to increase the effectiveness of IPAs in a competitive landscape.


Policy Study 02/2016

International linkages and external shocks: A Global VAR perspective for Belarus. Evidence from different model specifications

Belarus as a small, open economy is closely integrated into the global economy via complex commodity, trade and financial channels. The empirical investigation of the impact of different external shocks, e.g. changes in the global price of crude oil, or a recession in Belarus’ main trading partners on its main macroeconomic variables like GDP, inflation and the exchange rate is of concern to policymakers and researchers alike.

In this policy study, we use a very modern and sophisticated econometric approach to investigate these issues further. The Global Vector Autoregression (GVAR) as a multi-country model has been specifically developed to study such global macroeconomic issues, and has to our knowledge not previously been applied to the case of Belarus.


Policy Study 01/2016

Policy Options to Reform Free Economic Zones in Belarus

In Belarus, six Free Economic Zones (FEZs) exist in the country, with the first one (Brest) coming into existence 20 years ago. Their main objectives are according to the Law the promotion of the socio-economic development of Belarus and its regions, the attraction of investments aimed at the creation and development of export-oriented and import-substituting industries based on new and high technologies, as well as other purposes.

A more detailed assessment of their economic performance reveals a very mixed picture, though. While their contribution to the nations FDI and employment stock is relatively limited (5% and 3%, respectively), there have been worrying growth dynamics over the last years. The number of zone residents as well as the people employed in FEZ shrank over the last couple of years. The export share in FEZ is rather poor in international comparison, and they did not really contribute to the diversification of exports from traditional CIS markets towards new markets.


Policy Study 01/2015

Money as a leading indicator of inflation in Belarus and its implications for monetary policy

High inflation is one of the most acute problems of the Belarusian economy in recent years. It undermines the foundations of macroeconomic stability, introduces a significant uncertainty in the activity of enterprises and households, and creates difficulties for private business development. Therefore, at the moment the reduction of inflation is a key issue for economic policy in Belarus. In order to stabilize high inflation and make monetary policy more effective, the National Bank of Belarus (NBB) in 2015 moved to a regime of monetary targeting. However, the usage of monetary targeting requires clear-cut and stable relationships between the variables used as the operational, intermediate and final target. The absence or weakness of such links makes a monetary targeting regime actually ineffective in reducing inflation.