Attraction of FDI failed
By the end of 2011 the net volume of the foreign direct investment (FDI) may be just over $ 2 billion that will not balance out the budget (the deficit is expected to reach $ 6 billion).
Economy Minister Snopkov criticized the actions of the ministries, corporations and local authorities. For instance, Vitebsk region attracted only $ 9 million of FDI, Gomel oblast $ 22 million, Grodno $ 23.7 million. “Belneftehim” attracted only $ 43.8 million (6.6% of the planned for 2011 $ 663 million of net FDI) in the past 5 months, the Ministry of Trade raised $ 102.8 million (18% of the plan of $ 570 million), Ministry of Agriculture raised $ 49.3 million (6.4% of $ 770 million), Ministry of Industry raised $ 53.4 million (3.3% of $ 1.6 billion), Ministry of Energy raised only $ 200 thousand (0.07% of $ 300 million).
All in all, during the past five months only $ 700 million of net FDI has been raised or 11% of the annual plan for 2011 of $ 6.5 billion. Sergei Rumas emphasized that the greatest contribution in terms of attraction of FDIs is made by private enterprises. They account for 92% of the overall volume of the foreign direct investment.
Raising $ 6 billion of FDI was initially an impossible task, however the government and the National Bank insisted on this figure. Via FDI the government intended to align the balance of trade. However, in practice, by the end of the year there will be a slight decrease in the trade deficit, which must be financed somehow. It is Utopia to expect FDIs within the new economic conditions (except for revenues from privatization, while payments for “Beltransgaz” are certainly to come in tranches, i.e. the whole amount is unlikely to arrive this year). Accordingly, the Government has to attract USD 3-4 billion before the end of the year. Country’s economists, responsible for the proper implementation of the economic policy, still have no clue how to achieve it. Hence, there is public criticism, calling for a political decision on the IMF loan or for the sale of strategic assets, as well as for resolving the currency crisis.
Hence, there is public criticism, calling for a political decision on the IMF loan or for the sale of strategic assets, as well as for resolving the currency crisis.
As a result, previously opened Chinese credit lines have been frozen (USD 1.2 billion) due to the fact that Belarusian counterparts incapable of buying the minimum necessary amount of currency to pay the bank fees and other related payments.