Belarus: Living with an image problem
Hyperinflation, a stalled privatization process, a lack of raw materials and a national currency near-impossible to convert have understandably encouraged the view among foreign investors that Belarus is an economic basket-case. But, as Theodore Kim reports, for the adventurous it's one of the cheapest places in the world to do business and it does have an industrial infrastructure so massive that it earned a reputation as the assembly plant of the Soviet Union
Depending on which rate is used, the Belarusian ruble is worth anywhere from 300,000 to 550,000 to the dollar. That's from a fixed starting rate of 20 to to the dollar in 1992. The fall in the value of the currency has mirrored the collapse of the Russian ruble. Ditto the Belarusian economy. Seventy per cent of its exports are directed to Russia.
The problem of currency conversion puts Belarus at a disadvantage to all of its more favourably regarded neighbours countries which are competing to attract foreign investment using precisely the same selling points of skilled, low-wage workforces and low operating costs.
Even if a potential foreign investor can find a promising niche in the Belarusian market not too difficult a proposition given that few foreign investors have established themselves in the country there is still no reliable method to convert Belarusian ruble revenues into dollars and to repatriate the proceeds. That is unlike the situation with, for example, Russian rubles, Kazakh tenges, and Ukrainian hyrvnas.
The National Bank of Belarus (NBB) is trying to tackle the currency problem.