[AS PREPARED FOR DELIVERY]
Deputy Prime Minister Kobyakov,
Deputy Minister Aleinik,
Resident Coordinator of the UN in Belarus, Mr. Broek,
Ladies and Gentlemen,
It is an honour to welcome you to Geneva for this presentation of the Investment Policy Review of Belarus, prepared by UNCTAD. The high-level government representation here today reflects the importance of the investment policy review process for the country, which we jointly initiated in 2007. Investment Policy Reviews (IPRs) are one of the core activities of our organization, and are greatly appreciated by our member States for their concrete contribution to making FDI work for development. I was therefore delighted that the Government of Belarus requested support from UNCTAD´s IPR programme.
In November 2008, UNCTAD had the honour of presenting the key preliminary findings of the report before you today to the Prime Minister of Belarus and a large number of investors gathered for the first Belarus Investment Forum, in London. UNCTAD´s initial findings highlighted the country´s comprehensive reform agenda, which Belarus continues vigorously to pursue.
The final IPR was completed in 2009, and the Government expressed strong support for the implementation of its recommendations. Indeed, since the completion of the IPR, UNCTAD has already provided several government officials with follow-up technical assistance, for example, on how to strengthen investment promotion capacities and improve data collection methodologies. It is my hope that this report will continue to provide a blueprint for government efforts to establish a strong enabling environment for entrepreneurial activity. Today´s session will hopefully provide the Belarusian authorities with a useful exchange of experiences.
Deputy Prime Minister,
Ladies and gentlemen,
As emphasized in the Investment Policy Review, Belarus has a lot to offer investors. It has a sizeable internal market; it boasts a privileged location between Russia and the European Union; and it has a well-developed transport infrastructure and highly skilled labour force. Nonetheless, a heavy regulatory and administrative burden on business has long limited the scope and role of local and foreign private investment in the economy.
The Belarusian policy stance towards private sector development has changed since 2007, when the Government started introducing many reforms necessary for a more transparent, predictable and competitive business environment. These involved improving the interface between the public and private sectors and reducing the cost of doing business. Reforms also addressed important regulatory impediments and launched a new round of privatizations that openly target foreign investors in several different sectors. The fact that the Government has asked UNCTAD to undertake an objective review of investment policies, regulation and operational frameworks is part of a transparent effort to improve the climate for doing business.
UNCTAD´s assessment of an improved business climate is shared by investors and reflected in the improved performance of Belarus in international ratings on the ease of doing business in a given country. It is also backed up by the boom in FDI since 2007, with annual FDI inflows increasing more than tenfold since the early 2000s.
However, the IPR has identified a number of areas where coordinated policy action is needed to enhance Belarus´ competitiveness, increase its attractiveness as an investment location, and help secure development gains for the local economy from inward foreign investment.
To this end, fostering a sustainable and dynamic local private sector is a key area for action, which will have a strong positive affect on international investment attraction. Although the private sector´s role in the economy has been growing, it is still limited, confined largely to the services sector. This hampers local competition and the opportunities for business linkages that may arise from the entrance of foreign investors. In this respect, the IPR makes a number of recommendations that will be presented to you shortly by the Director of the Investment and Enterprise Division.
I would just like to stress that reducing subsidies for energy, exposing the State-owned productive sector to international competition and improving the fiscal competitiveness of the country will be important ingredients in creating a competitive economy. Business development will also be fostered by fair pricing mechanisms and a more effective land titling system. And finally, a level playing field among the different economic agents will be instrumental in maximizing the benefits of foreign investment for the development of the local private sector and for reducing potential crowding-out effects of foreign investment.
In addition, these reforms will help make Belarusian policies consistent with WTO rules and regulations and facilitate the country´s ongoing accession process.
While Belarus has made significant improvements to the business climate, it still faces challenges of coherence and implementation, which will require effective coordination in several areas of government. We recognize that this is a difficult task, one that was compounded by the recent financial and economic crisis. However, we believe that with commitment and persistence, Belarus is positioned to attract increased levels of foreign direct investment and take full advantage of the recovery phase.
Deputy Prime Minister,
In closing, I would like to acknowledge with appreciation the support received from the Mission of Belarus to the UN in Geneva, the Ministry of Economy and the National Investment Agency, throughout the preparation of this report. I would like to express our sincere gratitude to Mr. Antonius Broek, United Nations Resident Coordinator in Belarus. Not only did UNDP finance the project, but the support of the UNDP Office was vital to its completion. We hope that this fruitful relationship continues as we move on to the implementation phase. This work will be undertaken in the context of broader UN operations in Belarus.
Let me finally reiterate that UNCTAD stands ready to assist Belarus in achieving its goals. I wish you an open and fruitful discussion of the report.
Thank you for your attention.