Belarus - Economy

Economy

Most of the Belarusian economy remains state-controlled and has been described as "Soviet-style." Thus, 51.2% of Belarusians are employed by state-controlled companies, 47.4% are employed by private companies (of which 5.7% are partially foreign-owned), and 1.4% are employed by foreign companies. The country relies on Russia for various imports, including petroleum. Important agricultural products include potatoes and cattle byproducts, including meat. As of 1994, Belarus's main exports included heavy machinery (especially tractors), agricultural products, and energy products.

Historically, textiles and wood processing have constituted a large part of industrial activity. As of the 1991 dissolution of the Soviet Union, Belarus was one of the world's most industrially developed states by percentage of GDP as well as the richest CIS member-state. Economically, Belarus involved itself in the CIS, Eurasian Economic Community, and Union with Russia.

In the 1990s, however, industrial production plunged due to decreases in imports, investment, and demand for Belarusian products from its trading partners. GDP only began to rise in 1996; this coincided with the implementation of social welfare and state subsidies. In 2006, GDP amounted to US$83.1 billion in purchasing power parity (PPP) dollars (estimate), or about $8,100 per capita. In 2005, GDP increased by 9.9%; the inflation rate averaged 9.5%.

As of 2006, Belarus's largest trading partner is Russia, accounting for nearly half of total trade, and the European Union is Belarus's next largest trading partner, with nearly a third of foreign trade. Because of its failure to protect labour rights, however, Belarus lost its EU Generalized System of Preferences status on 21 June 2007, which raised tariff rates to their prior most favoured nation levels. Belarus applied to become a member of the World Trade Organization in 1993.

The labor force consists of more than four million people, among whom women hold slightly more jobs than men. In 2005, nearly a quarter of the population was employed by industrial factories. Employment is also high in agriculture, manufacturing sales, trading goods, and education. The unemployment rate, according to government statistics, was 1.5% in 2005. There were 679,000 unemployed Belarusians, two-thirds of whom were women. The unemployment rate has been in decline since 2003, and the overall rate of employment is the highest since statistics were first compiled in 1995.

The currency of Belarus is the Belarusian ruble (BYR). The currency was introduced in May 1992, replacing the Soviet ruble. The first coins of the Republic of Belarus were issued on 27 December 1996. The ruble was reintroduced with new values in 2000 and has been in use ever since. As part of the Union of Russia and Belarus, both states have discussed using a single currency along the same lines as the Euro. This led to a proposal that the Belarusian Ruble be discontinued in favour of the Russian ruble (RUB), starting as early as 1 January 2008. As of August 2007, the National Bank of Belarus no longer pegged the Belarusian Ruble to the Russian Ruble. The banking system of Belarus consists of thirty state-owned banks and one privatised bank. On 23 May 2011, the Belarusian Ruble depreciated 56% against the U.S. dollar. The depreciation was even steeper on the black market and financial collapse seemed imminent as citizens rushed to exchange their rubles for dollars, euros, durable goods, and canned goods. On 1 June 2011, Belarus requested an economic rescue package from the International Monetary Fund.