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May 20, 1996 CAPITAL: Minsk POPULATION: 10.5 million (as of January 1, 1995); 3.6 percent of the population of the former Soviet Union (FSU); 77.9 percent are ethnic Belarusian; 13.2 percent are Russian; 4.1 percent are Polish; 2.9 percent are Ukrainian; 0.84 percent are of other ethnic background. 64 percent of the population is urban. LANGUAGE: 82.7 percent of the population speaks Russian, while 77.7 percent speaks Belarusian, the national language. SIZE AND GEOGRAPHY: The area of Belarus is 207,595 square kilometers (80,154 square miles), slightly smaller than Kansas. The area of Belarus is 0.9 percent of the FSU. Belarus' dimensions are 560 kilometers (347 miles) from north to south and 650 kilometers (403 miles) from east to west. GENERAL POLITICAL OVERVIEW: The Belarusian government is composed of four divisional levels: the republican government; six oblasts (provinces) - Minsk, Brest, Vitebsk, Gomel, Grodno, and Mogilev; rayons (districts) and cities directly under an oblast; and towns, villages and settlements that make up the rayons. The Republican government of Belarus is divided into three branches: legislative (the Supreme Soviet), executive (headed by the Council of Ministers) and judicial (general courts and business courts). There are no ethnically-based subdivisions in Belarus. On July 27, 1991, Belarus formally declared its independence from the Soviet Union. In December 1991, together with Russia and Ukraine, founded the Commonwealth of Independent States (CIS). Since the establishment of the CIS Belarus has continued to pursue greater economic and other integration with Russia (see below). Alexander Lukashenko was elected as Belarus' first president in July of 1994. President Lukashenko has taken several steps to create closer political and economic ties with Russia, including measures to establish a customs union and signing a Treaty with Russian President Boris Yeltsin on April 2, 1996. The Treaty calls for the creation of a common economic space with integrated policies in the two countries' political, commercial and social spheres. Specific areas where harmonization is planned include labor, customs, tax, investment and foreign policies. According to the Treaty, unification of the two country's monetary and fiscal systems is to be completed by 1997. Until May 1995, the Belarus Parliament was one of the few legislative bodies in the NIS that had not faced elections since the dissolution of the Soviet Union. It took four rounds of elections, including two May 1995 -- when voters also voiced their support for greater economic integration with Russia, for making Russian the country's official language along with Belarusian, and for a return to a flag reminiscent of the Soviet era -- one in November 1995, and a last round in December 1995 to fill enough seats to form a new parliament. Communists hold the largest share of seats in the parliament, with members of the Agrarian party holding the second largest share. ECONOMIC INDICATORS AND SIGNIFICANCE: With only 3.6 of the population of the former Soviet Union, Belarus accounted for 4.2 percent of total FSU industrial output and 5.7 percent of the total FSU agricultural output. According to statistics, GDP fell approximately 13-20% in 1994 from 1993, and another 10% in 1995 compared to 1994. The Belarus government predicts a 1% growth in GDP for 1996, to 180 trillion Belarus rubles. Belarus industrial production fell an estimated 11.5% 1995 over 1994. Some sectors, such as light industry, experienced precipitous declines (up to 45%) in production during 1995, while others, such as Belarus' chemical and petrochemical sectors, experienced small growth. Overall agricultural production fell an estimated 6% in 1995. Belarus maintained the highest standard of living in the former Soviet Union, but inflation and other economic problems have significantly eroded the living standards in Belarus. Inflation steadily declined in 1995, from 39.8% in January to 3-4% in October. Yearly total of inflation was significantly lower in 1995 than 1994 (344% compared with 2,321% in 1994). Many economists argue, however, that this low level of inflation has been artificially maintained by the government and will eventually give way to noticeable rises in inflation. AGRICULTURAL PROFILE: In 1994, the agricultural sector accounted for an estimated 26 percent of Belarus' GDP and employed approximately 21 percent of the country's labor force. Belarus meets all of its own basic food needs with the exception of feed grains, sugar, and vegetable oil. The country's primary agricultural products are livestock, potatoes, barley, rye, flax, and fodder, with livestock contributing 60 percent to agricultural output. Belarus has been a net exporter of eggs, flour, meat, milk, flax, and potatoes. The Chernobyl disaster rendered more than 20% of the arable land in Belarus unusable. Beyond problems related to Chernobyl, the country also faces other obstacles to agricultural production. A drought in 1994 damaged crops throughout the country, and problems with harvesting and processing agricultural products result in lost or wasted harvests each year. Although the country is a major producer of certain types of agricultural machinery, including harvester combines and fertilizer spreaders, Belarus has strong potential as a market for new technologies for food processing and packaging. INDUSTRIAL PROFILE: Compared to other Newly Independent States, Belarus has a relatively well-developed and diversified industrial profile. The industrial sector accounted for nearly 60 percent of the NMP and almost 40 percent of employment in 1993, and approximately 40% of GNP in 1995. Main industrial activities in Belarus include: machine building, electronics, chemicals, light industry, defense-related products, and prefabricated construction materials. The country produces more than 25 percent of synthetic fibers and 23 percent of livestock-raising and fodder production equipment in the NIS. Among NIS countries, Belarus has ranked: first in the production of potassium fertilizers, fodder combine harvesters, organic fertilizer spreaders, and industrial stitch machines; second in the production of trucks, tractors, chemical fibers and threads, motorcycles, and industrial wood; and third in the production of metal-cutting machines, electrical motors, tires, lumber, paper, window glass, household refrigerators and freezers, tvs, radio receivers, bicycles, and knitwear. Belarus' energy-intensive industry continues to experience major shocks in supply, demand, and price because of the country's dependence on Russia and other NIS countries to supply up to 70 percent of its raw materials - for prices at or near market levels - and to absorb 40 percent of its output. Although some steps at privatization have been taken (see below), the overwhelming majority of enterprises in the industrial sector remain state-owned. Among other industries, defense conversion also holds potential for foreign investors. Belarus produced fiber optics, satellite links, and instrumentation for the Soviet defense industry. With the dismantling of defense operations in Belarus, firms are exploring opportunities for a variety of civil-use technologies, including information systems and public telecommunications products. ENERGY PROFILE: Belarus has a sizeable refining capacity for oil and gas and is an important transportation route for energy exports from the NIS to elsewhere in Europe, but the country produces only a small portion of its overall energy requirements. Domestic energy sources consist of crude oil and some peat; production of natural gas is negligible. Recent geological exploration indicates that Belarus may have significant deposits of brown coal, but significant investment are needed in order to extract and utilize the reserves. Thermal plants generate some of Belarus' domestic electricity, but Belarus imports more than 90 percent of its primary energy, most of which comes from Russia. By the end of 1995, the country's energy debt to Russia had grown to more than 500 million dollars. Belarus' mounting energy debt to Russia in the face of continued dependency on Russia to provide the raw materials to support the Belarus' energy-intensive economy is understood to be one of many key factors driving Belarus' efforts to establish closer ties with Russia. ENVIRONMENTAL ISSUES: Belarus faces a number of serious environmental problems related to the Chernobyl accident and its heavy industrial base. Nearly 25 percent of the territory and 22 percent of the population were affected by Chernobyl fallout. Approximately 1.5 million citizens are said to live in areas still contaminated as a result of the Chernobyl accident. The government has assumed the financial commitment, previously handled by the FSU, to mitigate the consequences of the fallout, and estimates that as much as 15-20% of the national budget supports Chernobyl-related activities. In response to the economic drain resulting from environmental problems, the government of Belarus has identified the development of environment-friendly technologies as a top priority. TRANSPORTATION PROFILE: Belarus does not have direct ocean/sea access, but its strategic location makes it a natural transport route between Russia and elsewhere in Europe. The country has a relatively well-developed but deteriorated road network of more than 55,000 km and a railway network of approximately 5500 km. An extensive project is underway to upgrade the Brest-Minsk-Russian border highway. Belarus also plans to expand its overall road network by nearly 40% by the early 21st century. Approximately 30 percent of bulk cargo and 10 percent of passengers in Belarus are conveyed by train. ECONOMIC DEVELOPMENTS AND ECONOMIC REFORM PROGRAMS: Overview: Although the Lukashenko government has voiced its commitment to economic reform and liberalization, Belarus has maintained a policy of gradual economic reform, stressing continuity and stability over massive restructuring in order to minimize social disruptions which might be caused by change. Overall, Belarus has made mixed and erratic progress towards economic reform. Recent developments in the Belarusian economy include the signing of a treaty on greater integration with Russia, the introduction of new currency regulations, and measures to reorganize the Minsk Interbank Currency Exchange under greater state control. Price Liberalization and Controls: Belarus price reform has been characterized by a series of small steps. In January 1992, the government freed the prices of 80 percent of wholesale goods and services but maintained subsidies on a number of essential goods, including some food products and energy. Industrial and consumer energy prices were liberalized by August 10, 1994, when some subsidies for consumer goods, including bread and milk, were eliminated. Lukashenko resisted additional price liberalizations until December 1994, when he approved a partial removal of government subsidies for basic food products, including dairy products, baked goods, and meat. The major remaining front for price liberalization is general communal services (sewage, electricity, etc.). Lukashenko has promised Belarus citizens that he would not liberalize prices if they are not yet able to pay for them, but he has also vowed to move forward with price reform. Privatization and Ownership: Belarus was among the last European countries to legalize privatization, and progress has been slow. The January 1993, law "On Destatization and Privatization of Government Property" and subsequent laws created the conditions for the development of a "socially-oriented" market economy with varied forms of ownership. In July 1993, Parliament passed a voucher program whereby each citizen would receive a non- transferable voucher, with the value depending on an individual's years in the work force. The initial privatization program planned to begin with the retail sector (small businesses, restaurants, stores) and outlined three basic procedures for privatizing state property: converting to employee ownership, converting to a joint-stock company, and selling (auctioning) an enterprise. The Council of Ministers Committee on the Administration of Government Property is responsible for managing the privatization process. According to the committee, two-thirds of state property will be subject to privatization. Of the property which can be privatized, law stipulates that 50% be privatized using non-transferable vouchers. A number of enterprises, including defense operations, alcohol and fuel distillation firms, and many companies involved in transportation, are not subject to privatization. Belarus has fallen behind its privatization goals. The Belarus government has prepared several lists of enterprises to be privatized within specific time periods, but has consistently failed to fulfill its plans. The government of Belarus estimated that 20% of state property would be privatized by the end of 1994, but many estimates report that less than 10% of all enterprises have been privatized. Privatization was put on hold at the end of March 1995, when President Lukashenko suspended the operations of investment funds responsible for collecting and carrying out voucher bids. It was not until mid-August that some, but not all, of the suspended investment funds were permitted to renew their activities. There are currently 39 specialized investment funds operating in Belarus. As of January 1996, approximately 65% of Belarus citizens had received their non-transferable privatization vouchers. Belarus citizens have until July 1996 to obtain vouchers. In early January 1996 President Lukashenko issued an edict on privatization which outlines procedures for denationalizing and privatizing enterprises and the necessary conditions for Belarus citizens to obtain shares of state property. The Ministry of State Property prepared a new list of 16 enterprises to be privatized in 1996, but includes a number of restrictions. Land can not yet be privately owned by Belarus citizens, with a very few exceptions; small tracts of land can be owned for gardening (up to .37 acres), housing (up to .62 acres), and farming (up to 2.5 acres). According to the June 1993 law "On Land Ownership," foreign citizens may not own land, but both foreign and Belarus citizens may lease or be granted the right to use land for up to 99 years. Foreign investors can buy state or communal property as long as they have the permission of the Ministry of State Property or the local council for communal property, respectively. Property owned by foreign entities can not be resold. In Belarus' transitional economy, identifying and confirming property ownership and rights remains a problem. LABOR FORCE AND RIGHTS OF WORKERS: Overview: Belarus has a skilled and educated labor force of 5.1 million workers, almost half its population. Large state enterprises remain the country's largest employers. Recent statistics list the country's unemployment level at 3%, but actual unemployment may be much higher. A 1992 labor code liberalized labor management relations in Belarus. Workers' Rights: As a result of a trade union law passed by the Supreme Soviet of Belarus in April 1994, an independent trade union movement is slowly developing in Belarus. The Federation of Trade Unions in Belarus, which is still guided by government directives, is the largest trade union in Belarus. The Federation consists of 5 million members. Under current legislation, workers have the right to organize and bargain collectively and may organize unions without discrimination. This legislation does not always apply in practice; independent union members have reported cases of dismissals and threats of loss of employment. The minimum age of employment is 16 years old. Exceptions are made in certain cases where the primary wage earner in a family is incapacitated. The labor code limits the work week to 41 hours, with a required 24-hour rest period. However, many workers find themselves underemployed and are forced to take unpaid leave due to the decline in factory production. The law also establishes minimum standards for workplace safety and employee health. Apparently, enforcement of these provisions is lax. Minimum Wage: In February 1995, President Lukashenko issued a decree raising minimum pensions, student stipends, and some salaries by a factor of more than two. The minimum monthly pension, for example, was raised to 158,000 BRB (more than $13), and the minimum monthly wage was increased to 60,000 BRB (just over $5) per month. The minimum wage was raised again as of January 1, 1996, to 100,000 BRB ($8.70 using the exchange rate maintained throughout 1995) per month. PRACTICAL INFORMATION 1996 Belarusian Holidays: January 1: New Years Day January 7: Orthodox Christmas March 8: Women's Day Second Monday in April: Catholic Easter Third Monday in April: Orthodox Easter Nine days after Orthodox Easter: Radunitsa May 1: Labor Day Second Sunday in May Flag Day May 9: Victory Day July 27: Independence Day November 2: Memorial Day/All Soul's Day December 25: Christmas Time Difference: Belarus is 7 hours ahead of East Coast time, or GMT plus 2. Visa Requirements: The Belarus Embassy in Washington issues visas. If you are planning to stay overnight in Belarus, you are required to obtain a Belarus visa. Visas from another Newly Independent State are only being accepted for transit through Belarus. An agreement on mutual recognition of visas in the CIS has been initialed, but it is not expected to go into force for some time. A tourist visa is only valid for a maximum of 30 days. If you are planning to stay in Belarus on business for over 30 days, you are required to obtain a business visa. In order to obtain a business visa, an invitation from a Belarusian company or the Belarusian government is required. Multiple-entry visas for Belarus can be expensive and can take a long time to obtain. As of 1 April 1995, plane-side visas (visas issued upon arrival in Belarus) are no longer issued by the government of Belarus. All travelers must obtain a valid visa prior to arrival in Belarus. Currency Exchange and Credit Cards: Although many hotels in Minsk accept Visa and American Express cards, travelers to Belarus should expect to rely primarily on cash for their payment needs. Currencies can be exchanged at most of the major tourist points (the international airport in Minsk, some hotels) and, in Minsk, at many stores. Medical Information: For information on health advisories for travel to Belarus, contact the International Travelers' Hotline provided by the Centers for Disease Control. Tel: 404/332-4559. For additional travel information, including travel advisories, contact the State Department's 24-hour Travel Hotline at 202/647-5225. Calling Belarus: In 1995 Belarus introduced a new country code, 375. At the same time, many Belarus city codes, including Minsk, also changed. With the introduction of the new country code, Minsk and other cities assigned a four-digit code which started with the number zero dropped the zero. It is also reported that local telephone numbers in Minsk which began with 293 and 296 have been changed to begin with 223 and 226, respectively.
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YOU ARE VISITOR SINCE OCTOBER 1997