Lukashenko lets a little light in

Belarus has long been considered as a somewhat undesirable destination in this part of the world. However, it is now, very gradually, opening up to foreign investors, and in a few years may well become one of the most rapidly growing markets in Central and Eastern Europe, due to both its substantial needs and potential opportunities. Now could be the ideal time to establish a foothold in the country, in anticipation of a future boom. Eurobuild spoke to Mikhail Abramchuk, Belarus’ first Deputy-Minister for Architecture and Construction about the country’s still infant real estate and construction industry

Emil Górecki, ‘Eurobuild CEE’: What is the most serious problem hindering the growth of the construction and real estate industry in Belarus?

Mikhail Abramchuk, Belarus’ first Deputy-Minister for Architecture and Construction: The answer is simple. Despite a great deal of investment, the main obstacle is the shortage of opportunities to facilitate investment. We don’t produce enough cement, although we are building three new cement-producing plants. We are modernizing all housing construction consortiums and increasing their production potential. We are doing much to increase brick manufacturing, yet the country’s requirements still outstrip the potential for growth in the industry.

The general consensus is that Belarus does not like foreign investors, despite the market appearing to open up somewhat.

Of course we want to attract foreign investors. Three sites on which cement factories are going to be built have been made available to foreign companies. Moreover companies with foreign capital for private investments are entering the market, indeed one is planning to upgrade an old manufacturing plant and set up three glass-production lines. We are trying to attract foreign businesses and are definitely not closing our market, as foreign investment offers an opportunity for the whole country, not just the construction sector.

What, if any, restrictions exist for foreign companies which would like to enter the Belarus market? What problems are they likely to encounter?

There are no such restrictions. A short time ago 51 pct of the shares in every enterprise had to belong to Belarus nationals, with only 49 pct allowed to be in the hands of foreign capital. These margins have been liberalized, with several regulations now in force streamlining economic activities. For instance, a Polish door-manufacturing company will soon be opening a factory in Mohilev.

Which country is Belarus’s most important foreign partner in the construction industry?

Russia, of course. It has always been our most important partner and we have had close economic relations with them for many years. Next would be the Ukraine and Poland. Last year, in partnership with Budimex of Poland, we constructed the Kozłowicze II border crossing point. Large contracts to supply building materials also exist, e.g. we exported products worth USD 3 mln to Poland in the first four months of the current year, while Polish plants supply finishing materials to Belarus. We still do not have such factories in our own market, which is why we import these products from our nearest neighbour – Poland.

Political relations between Belarus and the European Union leave much to be desired, but economic relations often operate on other principles. Do Belarus’ economic relations with Poland, Romania and Hungary really shape up better than the political?

I have nothing to do with politics so I cannot reply to that, but I am sure that no such negative relations exist in the economy to any major extent. I do think, however, that political relations are beginning to improve, which is bound to have 
a positive effect on the economy. Our two countries have always been good neighbours.

In what ventures can foreign companies participate to the greatest mutual benefit? What are the industry’s greatest needs in Belarus?

My ministry has drawn up 
a list of projects in which foreign companies could participate. What we need most of all is money and materials. Cement industry investment is high on the list – a product that is in great demand not only in Belarus but also in the Ukraine, Poland and other countries. Our goal is to become a major supplier of cement.

What will be the future form of the construction and real estate industry in Belarus? Will your country take the same road as Poland, Hungary and the Ukraine, or will it go its own way?

Many Russian companies are already starting projects in my country. But there are not as many western businesses – 
a significant difference I think that will establish a market trend. Many strong businesses with their own capital are active in Russia which are also interested in the Belarus market. But companies from our other neighbours like Poland, Lithuania and other Baltic countries are also starting to appear here. Our legal framework is ready to receive them and the market really does need them. ν