Belarus' Economic Lifeline: Exploring Key Income Sources

Belarus is an upper-middle-income country with an export-oriented economy. The country's main industries include mechanical engineering, chemical and petrochemical, agricultural, and manufacturing. Belarus's chief agricultural products include potatoes, flax, hemp, sugar beets, rye, oats, wheat, dairy, and beef. The country also has small reserves of petroleum and natural gas, although it imports most of its oil and gas from Russia. Belarus's major exports include petrochemicals, mechanical engineering products, meat and dairy products, and textiles.

Manufacturing

The food industry is the most important sector, making up 29.9% of total manufacturing output. Other well-developed sectors include the chemical industry (oil refining, petrochemicals, and fertilisers), automotive industry, and machinery equipment manufacturing.

Belarus has several major Soviet-built chemical factories, with two distinct sectors: "manufacturing of coke and refined petroleum products" and "manufacturing of chemical products". The core of the oil processing sector is formed by two plants: the Naftan refinery in Novopolotsk and the Mozyr refinery. The main subsector of the manufacturing of chemical products is the production of fertilisers, which accounted for 76.5% of output in 2019. Other notable subsectors include synthetic fibre production (6.3%), household chemicals (5.1%), and varnishes and paints (4.9%).

The automotive industry in Belarus emerged in the 1940s with the construction of the Minsk Automobile Plant (MAZ). Over time, this industry expanded to include truck and bus manufacturing, with several factories producing automotive units located across the country. Belarusian companies produced 39,500 tractors, 2,500 metal-processing machines, 9,100 trucks, and 1,349 buses in 2020.

Heavy industry is also well-developed in Belarus, with a focus on heavy-duty vehicles such as trucks and tractors, manufactured in Minsk, Zhodzina, and Mahilyow. Precision manufacturing is another key aspect, with consumer goods such as radios, television sets, watches, bicycles, and computers being produced in the country.

Belarus has a long history of engineering and manufacturing, dating back to the late 19th century when Minsk, Vitsebsk, Hrodna, Pinsk, and Homel became significant industrial centres. The country has maintained government control over key industries, with the state owning up to 100% of major industrial companies. This dominance of state-run companies has, however, negatively impacted small and medium-sized businesses in the manufacturing sector.

Agriculture

Belarus has a strong agricultural sector, with 39% of its land dedicated to agricultural use. The country's chief agricultural products include potatoes, flax, hemp, sugar beets, rye, oats, and wheat. Belarus also has a significant meat and dairy industry, with dairy and beef cattle, pigs, and chickens being raised. In addition, Belarus produces grain, vegetables, and sugar beet.

The country's cool climate and dense soil are well-suited for growing fodder crops, which support herds of cattle and pigs, as well as temperate-zone crops such as wheat, barley, oats, buckwheat, potatoes, flax, and sugar beets. The southern marshy regions are less fertile, but even there, agriculture is still possible.

Belarus can be divided into three agricultural regions: the north, which produces flax, fodder, grasses, and cattle; the central region, which specialises in potatoes and pigs; and the south, which focuses on pastureland, hemp, and cattle.

The agricultural sector in Belarus has undergone significant changes since the early 1990s, with a decline in the amount of land under cultivation and a shift from livestock to crop production. This shift was driven by the increased profitability of crops compared to livestock, as the sales price for crops grew more than production costs, while the inputs for livestock, such as imported fodder, became more expensive.

The food processing industry in Belarus is led primarily by state-owned enterprises, such as Belgospischeprom, and local municipal or regionally owned production facilities. The Orsha Linen Mill, part of the Belarusian State Concern Bellegprom, processes flax into various linen fabrics. Another example is the OJSC Slavianka plant in Babruisk, which uses modern textile equipment to produce clothing.

Belarus's agricultural output contributes to its export-oriented economy, with dairy and meat products among its key exports. The country's major trading partners include Russia, the Eurasian Economic Union (EAEU), and the Commonwealth of Independent States (CIS) countries. However, Belarusian manufacturers are also expanding their presence in the markets of Asia, Africa, America, and Oceania.

Exports

Belarus is an export-oriented country with a well-developed manufacturing industry, services sector, and agriculture. The country's exports include a wide range of products and commodities, which are vital to its economy. Here is an overview of Belarus's exports:

Petrochemicals

Petrochemicals are one of the key exports of Belarus. The country has a strong petrochemical industry, which processes and refines oil and natural gas imported from Russia. Belarus has a long history of dependence on Russian energy resources, and the country's refineries play a significant role in the economy. While Belarus has some small oil and natural gas fields, it relies heavily on imports from Russia to meet its energy needs and support its petrochemical industry.

Mechanical Engineering

Belarus has a strong mechanical engineering sector, which contributes significantly to its exports. The country produces and exports a range of machinery and equipment, including tractors, trucks, earth movers, metal-cutting machine tools, agricultural equipment, motorcycles, and more. Belarusian manufacturers are known for their expertise in machine-building and have a history of specialising in heavy-duty vehicles and industrial equipment.

Metallurgy

Metallurgy, or the production of metals, is another important export sector for Belarus. The country exports a range of metal products, including steel, aluminium, and non-ferrous metals such as copper, bronze, and brass. Belarus also has deposits of various minerals and ores, such as iron ore, titanium, copper ore, and mercury, which support its metallurgy industry.

Woodworking and Light Industry

Woodworking and light industry products are also significant contributors to Belarus's exports. In terms of woodworking, Belarus exports products such as furniture and wood-derived materials like fibreboard. The light industry in Belarus includes the production of textiles, clothing, and other consumer goods. These industries play an important role in providing employment and contributing to the country's economic growth.

Agricultural Products

Agriculture is a vital sector in Belarus, and the country exports a range of agricultural products. Belarus is known for its meat and dairy industry, as well as the production of grains, potatoes, vegetables, sugar beets, and flax. The country has a significant amount of agricultural land, with about 39% of its total land area dedicated to farming. Belarusian agricultural products are recognised for their quality and are sought after in both domestic and international markets.

Other Exports

In addition to the sectors mentioned above, Belarus also exports a range of other products. These include glass, fiberglass, cement, and various consumer goods. The country has a diverse economy, and its exports reflect the strength of its manufacturing and agricultural industries.

Employment

As of 2023, the unemployment rate in Belarus was 3.5%, with a total of 172,100 unemployed people based on a sample survey by the ILO (International Labour Organization) methodology. The real unemployment rate, however, is believed to be higher due to the underreporting of unemployment. This may be attributed to the obligatory public works associated with registration.

The breakdown of the employed population by type of economic activity in 2023 is as follows:

• Production sector – 24.1%
• Wholesale and retail trade; repairs of automobiles – 14.3%
• Agriculture, forestry, fishing industry – 8.4%
• Transportation, storage, postal services and courier delivery – 6.6%
• Civil engineering – 5.9%
• Information and communications – 3.0%

Belarus has a highly regulated labour market, with elements of the central planning system still in place. While firms can determine wages, the government can influence the wage structure through a centrally determined wage grid called the tariff system. This system is binding in the budget sector, including enterprises and organisations primarily financed and subsidised by the state and/or local budgets.

The private sector, which represents a small share of employment, has little autonomy when it comes to wage determination.

In 2021, the International Trade Union Confederation listed Belarus among the top 10 worst countries for working people globally due to state repression of independent union activity, arbitrary arrests, and severe cases of limited or no access to justice.

Imports

Belarus is an upper-middle-income country with a mixed economy. It is heavily reliant on imports, particularly from Russia, which is its first trading partner, with 49% of Belarus's international trade. In 2021, the EU was Belarus's second main trade partner, representing 19.9% of the country's overall trade in goods.

Belarus's chief imports are cars, packaged medicaments, light rubberised knitted fabric, video displays, and motor vehicles, parts, and accessories. In 2022, the country imported $12.5 billion worth of goods, with the majority coming from China ($3.23 billion), Poland ($1.83 billion), Germany ($1.53 billion), Lithuania ($1.5 billion), and Turkey ($1.13 billion).

Belarus's imports are closely linked to its exports, with the country relying on raw materials and equipment from other nations to produce goods for export. This is evident in the country's history as a producer of goods made from raw materials imported from the Soviet Union, earning it the nickname "the Soviet assembly shop".

The country's imports are also influenced by its centralised economic controls, with the state retaining control over key industries. Belarus has small reserves of petroleum and natural gas and imports most of its oil and gas from Russia. The country's imports of machinery, chemicals, and transport equipment from the EU are also notable, with these goods accounting for 31.2%, 15.4%, and 12.3% of the EU's exports to Belarus, respectively.

The import of goods such as cars and motor vehicles, parts, and accessories highlights the importance of the automotive industry in Belarus. The country is home to several domestic automotive manufacturers, including BelAZ, MZKT, Neman, and MoAZ. However, the import of automotive parts and accessories suggests that the country relies on external suppliers for certain components.

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