The Economy in Belarus

Historically, the economy in Belarus has been dominated by State-owned or state-controlled enterprises. The economic base has been oriented towards the Soviet market, and Russia will continue to be an important economic player in the country. In addition, the Education system has been uniquely adapted to support the IT sector.

Russia will remain an important economic player in Belarus

Until the late twentieth century, the territory of modern Belarus was a part of the Russian Empire. The modern boundaries of the state took shape after World War II. Modern Belarus eventually became a part of the Grand Duchy of Lithuania.

In the 1990s, Belarus acted as a key Russian political staging ground. The two countries also established a joint military training center in Hrodna. Russia has been an important economic player in Belarus, as well. Belarus is a transit route for more than 20 percent of Russia’s energy exports to the European Union.

After the Ukraine crisis, tensions between Russia and Belarus erupted. In November 2021, Belarus and Russia agreed to a new military doctrine, which emphasizes closer bilateral cooperation. The two nations held large-scale military exercises.

Russia’s drive for predominance may also exacerbate tensions with its regional partners. Russia views all of Eurasia as a privileged zone, and will continue to seek Western recognition for its dominance in the former Soviet Union.

The United States and the European Union have been imposing sanctions on Belarus, limiting its access to global trade and cutting off international funds. In addition, Estonia closed its visa center for Belarusians.

Belarus’s President Andrei Lukashenko has made significant political concessions to the Kremlin. The Kremlin sees the region as its own and has been eager to maintain control over Belarus. The Belarusian leader will continue to balance dependence on Russia with Western support.

Russia’s domestic environment will be more difficult than it has been in recent years. In addition, there will be an ongoing war in Ukraine, which may result in further elite defections. Low birth rates will also limit governments’ ability to raise revenue.

Economic base was oriented toward the Soviet market

During the early days of the post-Soviet era, Belarus enjoyed a healthy economy. Its heavy industrial base was oriented toward the Soviet market. The country’s private sector also benefited from the Soviet industrial policies.

The United States has provided significant assistance to Belarus. Programs include technical assistance, humanitarian aid, and assistance to small-scale democracy-building efforts.

The United States has also supported Belarus’ transition to a market-based economy. It has worked with a diverse array of government officials, business leaders, and the general population to promote the country’s transition. Among its priorities are programs to support economic restructuring, strengthen defense industry conversion, and improve social services.

The United States has also worked with Belarus to promote human rights, including the rule of law and civil rights. It has also helped to improve the quality of medical care in Belarus.

Belarus has developed a relatively stable political environment, but the country remains dominated by the more powerful neighboring states. Its economy has performed well over the past quarter century. Belarus has benefited from the legacy of World War II and the major post-war reconstruction efforts of the Soviet government.

Despite its shortcomings, Belarus has emerged as one of the most stable former Soviet republics. It is important to remember that Belarus’ fortunes are closely tied to its ties with Russia.

Belarus also benefited from Soviet-era investments and heavy indoctrination. The Russian government spent considerable political capital to manage its relationship with Belarus.

The best way to approach Belarus is through a carefully calibrated multilateral engagement strategy. Western actors should assume that Minsk is willing to pay for such engagement. The best way to do that is to structure engagement so that it is demand-driven.

State-owned or state-controlled enterprises dominate the economy

Among the many changes introduced by the Bureau of Industry and Security (BIS) in response to the Russian invasion of Ukraine, the issuance of a Commerce Control List (CCL) based license requirements for Russia is a notable one. This rule will also restrict the sale and distribution of certain products that are foreign-produced and are destined for Belarus.

This new rule will affect a wide variety of products. The EAR’s restrictions on items to Belarus are intended to prevent the diversion of U.S. military items to Russia. This policy is also designed to help prevent the diversion of sophisticated technologies produced in the U.S. and designed in the U.S. from Belarus to Russia.

The SS 746.9 rule is the most significant change. It includes an FDP rule which is the first of its kind. The rule is specifically targeted at Belarusian military end users and is targeted as a destination. It also includes a licensing policy that will be reviewed on a case-by-case basis.

The Commerce Department’s issuance of new EAR license requirements for Russia is part of a broader U.S. Government response to Russia’s military invasion of Ukraine. It is also coordinated with the United Kingdom and other allies. The BIS’s new rules are a major step forward in the United States’ ability to implement sanctions against Russia.

The BIS has also added Belarus to a Commerce Country Chart (CCC) supplement that includes other countries that are excluded from the Commerce Department’s sanctions program. This is a small but important addition that will be beneficial to U.S. companies doing business in Belarus. It also includes an exclusion for the country’s first direct-elected president, Alexander Lukashenko.

Education system uniquely suited to support the IT sector

Among the many factors influencing the IT sector’s success is the country’s education system. With 249 vocational-technical schools, an estimated 22% of Belarusians will specialize in science, technology, engineering, and mathematics (STEM) fields in 2025. The IT sector is also supported by a robust higher education system. This is not to mention the country’s long tradition of high-tech industrial production. In spite of political unrest, the IT sector is likely to remain an integral part of the country’s economy for the foreseeable future. In 2018, the IT sector contributed 5.5% of the country’s gross domestic product. It also offers higher wages than average.

The education system is regulated by the Ministry of Education. It is responsible for developing and applying State educational standards, as well as the accreditation and licensing of higher education institutions. It also oversees quality assurance and recognition systems. Aside from the aforementioned Ministry of Education, the country’s higher education system is populated by research institutions, educational institutions, and private HEIs. It is also home to the Hagen Correspondence University, which started operating in Belarus in 1996.

The higher education system also benefits from the country’s robust vocation-based education system. Vocational training is offered at both the secondary and tertiary levels. This type of education complements basic education. During vocational training, students learn specific trades and acquire technical skills and knowledge. Aside from the typical three-year vocational training course, students can also choose to enroll in specialized secondary education establishments, which include technical schools, technicums, and colleges.

The IT sector has been a boon to Belarus’ economy, and the country has a long tradition of high-tech industrial production. However, the political turmoil in the country has threatened to wreak havoc on the sector’s stability.

Privatization threatens the sovereignty and independence of Belarus

Among the principal challenges facing Belarus today is the risk of a rapid change of course. The Belarusian regime, led by President Alexander Lukashenka, may not have enough political space to implement necessary reforms. This would not only undermine the state’s sovereignty, but also increase the likelihood of political instability.

Belarus’s economy has been stifled by low oil prices and low growth. The country has been relying on subsidies from Russia to sustain its economy. Belarus’s privatization of state-owned enterprises (SOEs) has become more difficult over time. However, it has provided employment to millions of Belarusians.

Belarus has a complex relationship with Russia. It is a post-Soviet country that was one of the first to sign a “Union Treaty” with Russia in 1999. Belarus is a member of the Eurasian Economic Union (EEU), spearheaded by Russia. The EEU is a vehicle for gathering former Soviet Union states into a sphere of influence.

Belarus’s foreign policy has been redefined by an undeclared war with Ukraine in 2014. The Russian government wants Belarus to follow a harder line with Ukraine. There are also some Russian nationalist groups that pressure the Belarusian regime. Belarus is a vulnerable target for Russia’s nationalists.

Belarus’s leadership has a difficult task of managing both its domestic and foreign affairs. It is tempted to trade sovereignty for foreign subsidies. The regime’s priorities include maintaining the system built since 1994 and protecting the state’s sovereignty.

While the Belarusian leadership has achieved nontrivial accomplishments in its foreign affairs, it has faced an increasingly difficult geopolitical environment. Belarus has faced many of the same challenges faced by Ukraine. Russia’s annexation of Crimea and its confrontation with the West have made it more difficult to present Belarus as a “neutral” state.