IT industry to lead Belarusian export growth in 2016
In 2015, exports of IT services by HTP residents exceeded USD 700 million. The IT industry’s success is due to tax benefits, high quality of Belarusian specialists and limited abilities of the authorities to interfere with the industry. In 2016, amid expected export failures in other economic sectors, the Belarusian IT will lead export growth.
The High-Tech Park management reported an increase in export of services by HTP residents by 21% compared with 2014, up to USD 705.6 million. Export occupies more than 90% of total HTP production. HTP companies-residents employ more than 24000 people with more than 3,000 jobs created in 2015 alone.
Overall, in 2015, Belarus’ export of telecommunication and computer services for the first time exceeded USD 1 billion and listed second in the total exports of services, following transport services. Branch holds the first place in terms of gross salary in Belarus. The average salary in the HTP in late January 2016 exceeded USD 1,700.
The industry’s success in Belarus is due to highly skilled workers, raised at domestic universities. In addition, the HTP enjoys tax benefits, including tax on profits and income tax, which is 9% for HTP employees. As well, a significant flexibility in the workflow prevents the Belarusian authorities from interfering too much with the industry. HTP companies can easily change their place of residence within a couple of days should any threat occur, and leave Belarus without foreign currency inflow. Tax Ministry’s attempt to increase tax payments for HTP residents was unsuccessful so as the HTP companies were able to defend their privileges, even against the backdrop of state budget deficit.
In 2016, Belarusian exports will continue to shrink. Exports of potash fertilizers may reduce by one third in value terms, prices on dairy products may reduce by 20%-30% in dollar terms, while investment demand for engineering products is unlikely to increase. Russian market, which is the key market for exports of Belarusian goods, is unlikely to resume growth in 2016 due to persistently low oil prices.
The IT industry is focused on markets outside the CIS, software is delivered to more than 60 countries in the world, which saves the industry from foreign exchange risks. High wages attract additional manpower to the industry, which allows to increase production volumes. In recent years, the industry’s exports grew by at least 10% per year, and its potential has not yet been exhausted. Exports of the IT industry in 2016 may increase by USD 100-150 million, making the most significant increase among all goods and services.
With the overall decline in exports of goods and services, the IT sphere earned more than USD 1 billion in 2015. Diversification of exports, minimal government interference and highly skilled workers create favourable environment for at least 10% increase in exports of IT services in 2016 relative to 2015.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.