Republic of Belarus
After seven decades as a constituent republic of the USSR, Belarus attained its independence in 1991. It has retained closer political and economic ties to Russia than any of the other former Soviet republics. Belarus and Russia signed a treaty on a two-state union on 8 December 1999 envisioning greater political and economic integration. Although Belarus agreed to a framework to carry out the accord, serious implementation has yet to take place. Since his election in July 1994 as the country's first president, Alexandr LUKASHENKO has steadily consolidated his power through authoritarian means. Government restrictions on freedom of speech and the press, peaceful assembly, and religion continue.
Belarus's economy in 2006 posted more than 8% growth. Trade with Russia - by far its largest single trade partner - decreased in 2006, largely as a result of a change in the way the Value Added Tax (VAT) on trade was collected. Trade with European countries increased. Belarus has seen little structural reform since 1995, when President LUKASHENKO launched the country on the path of "market socialism." In keeping with this policy, LUKASHENKO reimposed administrative controls over prices and currency exchange rates and expanded the state's right to intervene in the management of private enterprises. Since 2005, the government has re-nationalized a number of private companies. In addition, businesses have been subject to pressure by central and local governments, e.g., arbitrary changes in regulations, numerous rigorous inspections, retroactive application of new business regulations, and arrests of "disruptive" businessmen and factory owners. A wide range of redistributive policies has helped those at the bottom of the ladder; the Gini coefficient is among the lowest in the world. Because of these restrictive economic policies, Belarus has had trouble attracting foreign investment, which remains low. Growth has been strong in recent years, despite the roadblocks in a tough, centrally directed economy with a high, but decreasing, rate of inflation. Belarus receives heavily discounted oil and natural gas from Russia and much of Belarus' growth can be attributed to the re-export of Russian oil at market prices. This growth will be threatened in 2007, however, when Russia raises energy prices closer to world market prices for Belarus. Russia is planning to increase Belarusian gas prices from $47 per thousand cubic meters (tcm) to $100 per tcm for 2007, gradually increasing to world prices by 2011. Russia has also introduced an export duty on oil shipped to Belarus, which will increase gradually through 2009, and a requirement that Belarusian duties on re-exported Russian oil be shared with Russia - 70% will go to Russia in 2007, 80% in 2008, and 85% in 2009.
This information is from The World Factbook.
