Belarus was a poor and underdeveloped country that relied mainly on agriculture and had an overpopulation problem in the countryside prior to the October Revolution. A fifth of Belarus’s people were killed, and the country’s infrastructure was obliterated, during World War II.
During the decades following World War II, Belarus developed its industrial sector and grew into a major transit point for goods traveling between the Soviet Union and Europe. Tractors, large vehicles, oil refining, metal lathes, synthetic fibers, televisions, semiconductors, and microchips all contributed to the country’s booming manufacturing sector.
More than half of Belarus’ industrial workforce in the 1980s was employed by companies with more than 500 workers. In comparison to other Soviet republics, it was the most technologically advanced and had a high export rate of about 80% for its goods.
Belarus earned the nickname “the Soviet assembly shop” due to its role as a manufacturer of goods assembled from components imported from the Soviet Union.
Since the fall of the Soviet Union, under Lukashenko’s leadership, Belarus has avoided the widespread privatizations experienced by other post-Soviet states and instead kept government control of its most important enterprises.
Belarus Economy In Europe 2023 [Facts & History]
There was a lot of monetary distress between 1996 and 2000, especially in 1998 and 1999 because of the monetary and economic crisis in Russia.
In particular, this led to a dramatic rise in prices and the devaluation of the national currency, a drop in trade with Russia and other CIS nations, a rise in inter-enterprise arrears, and an overall deterioration of the country’s balance of payments.
Read Also: Belarus Economy In Europe [Facts & History]
The foreign exchange market tensions that were extreme in 1998 and 1999 were the primary cause of economic instability. A 294% increase in price levels was seen by consumers in 1999.
In the years between 2001 and 2005, the national economy grew consistently and rapidly. The GDP increased by 7.4 percent on average, with a growth of 9.2 percent in 2005 being the highest point. Over the course of the period studied, the industrial sector contributed significantly to this expansion, growing at a rate of over 8.7 percent year on average and reaching a peak of 10.4 percent in 2005. Principal crops include potatoes, flax, hemp, sugarbeets, rye, oats, and wheat.
Animals such as pigs, poultry, and cattle for dairy and beef production are bred there. As a result of its meager reserves, the majority of Belarus’s oil and gas needs must be met through imports from Russia. Tractors and trucks, earth movers for construction and mining, metal-cutting machine tools, agricultural equipment, motorbikes, chemicals, fertilizer, textiles, and consumer goods are all products of the primary industrial sectors. Russia, Ukraine, Poland, and Germany are the top four trading partners.
The gross domestic product of Belarus increased by 9.9 percent in 2006. We had an 8.2% increase in GDP in Q1 of 2007. In 2008, GDP growth accelerated to 10%.
The majority of FDI in Belarus between 2002 and 2007 went toward the service sector, while just 20% went toward manufacturing. Foreign direct investment in agriculture was pitifully low.
Since gaining its independence, Belarus has taken a slow and steady approach to transition, with few major structural changes and only a little increase in private sector activity. Real GDP growth and poverty reduction were both aided by the gradualist policy, which was bolstered by the positive effects of trade, notably with energy commodities.
The number of households living below the federal poverty line decreased and the income of the bottom 40 percent of the population rose in tandem with the high rates of economic growth experienced between 2003 and 2013. While GDP growth rates were impressive, Belarusian income levels were lower than those of its regional neighbors.
As a result of looser restrictions on movement and more credit for state-owned businesses, the economic impact of the COVID-19 shock in 2020 was mitigated. Strong export growth fueled a cyclical upturn in 2021, but the economy is forecast to contract sharply in 2022.