Belarus: country overview

Belarus has the opportunity to be an active partner of the EU in the framework of the European Neighbourhood Policy (ENP), provided that the country embarks on fundamental democratic and economic reforms to bring the country closer to European common values.

Member of Schengen area: No

Political system: Republic

Capital city: Minsk

Total area: 207 600 km²

Population: 9.7 million

Currency: Belarusian rouble

Belarus and the EU

The EU's offer to re-engage with Belarus was set out in the document What the EU could bring to Belarus, which the Commission released in November 2006 and which offers Belarus to enter a full partnership, as part of the European Neighbourhood Policy, provided that Belarus takes convincing steps towards democratisation, respect for human rights and the rule of law. It contains concrete examples of how the people of Belarus could gain from a rapprochement between the EU and Belarus.

Economy overview

As part of the former Soviet Union, Belarus had a relatively well-developed industrial base; it retained this industrial base - which is now outdated, energy inefficient, and dependent on subsidized Russian energy and preferential access to Russian markets - following the breakup of the USSR. The country also has a broad agricultural base which is inefficient and dependent on government subsidies. After an initial burst of capitalist reform from 1991-94, including privatization of state enterprises, creation of institutions of private property, and development of entrepreneurship, Belarus' economic development greatly slowed. About 80% of all industry remains in state hands, and foreign investment has been hindered by a climate hostile to business. A few banks, which had been privatized after independence, were renationalized. State banks account for 75% of the banking sector. Economic output, which had declined for several years following the collapse of the Soviet Union, revived in the mid-2000s thanks to the boom in oil prices. Belarus has only small reserves of crude oil, though it imports most of its crude oil and natural gas from Russia at prices substantially below the world market. Belarus exported refined oil products at market prices produced from Russian crude oil purchased at a steep discount. In late 2006, Russia began a process of rolling back its subsidies on oil and gas to Belarus. Tensions over Russian energy reached a peak in 2010, when Russia stopped the export of all subsidized oil to Belarus save for domestic needs. In December 2010, Russia and Belarus reached a deal to restart the export of discounted oil to Belarus. In November 2011, Belarus and Russia reached an agreement to drastically reduce the price of natural gas in exchange for selling to Russia the remaining share of Beltransgaz, the Belarusian natural gas pipeline operator. Little new foreign investment has occurred in recent years. In 2011, a financial crisis began, triggered by government directed salary hikes unsupported by commensurate productivity increases. The crisis was compounded by an increased cost in Russian energy inputs and an overvalued Belarusian ruble, and eventually led to a near three-fold devaluation of the Belarusian ruble in 2011. The situation has stabilized short-term due to a $3 billion loan from the Russian-dominated Eurasian Economic Community Bail-out Fund, a $1 billion loan from the Russian state-owned bank Sberbank, and the $2.5 billion sale of Beltranzgas to Russian state-owned Gazprom.

Source: Europa, The World Factbook

Useful links

Delegation of the EU to Belarus

Government of Belarus

Tourist information