The deterioration of the performance parameters of the economy in 2020 was greatly influenced by the interdependence with the stagnant Russian economy and the confrontation regarding the conditions of the supply of Russian oil. Also lower demand for Belarusian goods on world markets as a result of the spread of the coronavirus and the heightened internal political situation after the presidential elections. The crisis significantly affected the economy through inflationary expectations, the deepening of the country’s indebtedness and the decline in domestic demand.
The growth prospects of the Belarusian economy in the coming years are considerably limited, and due to persistent internal threats (increasing inflation overhang, limited financial and investment resources, mismatch between wage levels and labor productivity, outflow of qualified personnel), it is necessary to take macroeconomic forecasts for 2021 with a grain of salt. The further development of the situation will largely depend on the overall cooperation with Russia (the solid economic growth of the main trading partner remains a prerequisite for the Belarusian economy) and the further development of relations with the EU and the USA (new sanctions, Belarusian countermeasures).
In response to the covid-19 pandemic, Belarus did not impose a blanket quarantine and did not adopt any other restrictions that would affect production and trade. The reason was not only President Lukashenko’s completely dismissive approach to the pandemic, but also the worsening situation of the country, which did not allow production to stop even for a few weeks. Therefore, in connection with the pandemic, only a single decree of the President was adopted to support the economy, which the government quantified as approximately USD billion (3.9% of GDP), but in fact, at the beginning of 2021, approximately USD 753 million (1, 2% of GDP). However, the measure did not bring a breakthrough effect for small and medium-sized enterprises, it was aimed mainly at supporting state-owned entities with a dominant position on the market, which are a guarantor of employment and generate significant foreign currency income for the Belarusian economy.
Post-COVID-19 opportunities for foreign exporters
According to allcountrylist, the strategic goal of the Belarusian government for the period 2021-2025 is to increase the energy independence of the country. The planned completion of the construction of the Astravec nuclear power plant (launch of the first unit this year and commissioning of the second unit in the first half of 2022) and its subsequent integration into the transmission system of Belarus bring export opportunities, especially for the supply of equipment for the construction of backup sources of thermal power plants, construction and modernization of power lines and substations.
The pursuit of greater energy self-sufficiency and the absence of its own energy engineering represents a chance for Czech companies in the field of supplying energy-efficient and energy-saving technologies, especially in the municipal sector, where there is a gradual increase in prices for services (potential for the modernization of heating systems in apartment buildings, including the installation of automatic control systems and in the supply of small boilers for local raw materials).
Water management and waste industry
Potential for projects to build recycling and regranulation plants with respect to the interest in reuse and recycling of municipal waste. A waste incinerator for the capital, which produces almost a quarter of all waste in the country, is another interesting chance for Czech companies. The current capacity of landfills will be filled by the end of 2022. Therefore, the issue of building a modern incinerator in which municipal waste (550,000 tons per year) would be disposed of is now very urgent for Minsk.
In 2025, the program for developing the quality of drinking water in Belarus is also to be completed. As part of the program, the government announced the modernization of wastewater treatment plants in several Belarusian cities. The largest project is the government-approved (temporarily suspended in September 2020) EBRD and EIB investment for EUR 168 million in water management buildings and wastewater treatment plant equipment of the Minsk city water company. It is very likely that financing from international financial institutions will be restored sooner or later – an opportunity for the participation of technical consultants, construction companies and contractors in the expected tenders.
Agricultural and food industry
In February 2021, the Government of Belarus decided to allocate approximately USD 110 billion in 2021-2025 to support agriculture and the food industry under the “Agrarian Entrepreneurship” program. In the agrarian sector, the focus is on the reconstruction/construction of farms, pig farms and the modernization of the processing industry. Livestock production and the related processing industry are among the key perspective fields that will be financially supported by the Belarusian state.
In the context of the ongoing expansion of Belarusian dairy production and the ongoing expansion into Asian markets, new opportunities are opening up in the field of modernization of Belarusian dairies and the possible involvement of Czech technologies in this process. There is a long-term interest in high-quality blue poppies, hops and barley, which are grown in the Czech Republic, as well as Czech beer and cooperation in the field of brewing and brewing technologies (especially microbreweries).
Rail and rail transport
In the transport infrastructure, which is also related to the Belarusian government’s Program for the Development of the Country’s Logistics System, there is an opportunity in the offer of rail technology and optimization of supply chains by increasing the efficiency of existing global transport solutions (especially considering the increase in the volume of freight transported from China by rail, which will continue in the coming years). The permanent demand for signaling, security and electronic systems in the railway transport infrastructure also offers scope for Czech exporters.