Belarus' PM reported on proposed novelties to investment bill, President approved them as a whole
A bill on assistance and stimulation of the implementation of investment projects has been submitted to the President of Belarus, Aleksandr Lukashenko, for consideration. The Head of State approved the document as a whole, but instructed to polish some of its provisions before further sending to Parliament. Prime Minister Roman Golovchenko reported on the details following today’s meeting of the President with the leadership of the Council of Ministers.
Mr. Golovchenko explained why the document had been prepared, stressing that – some time ago – Decree No. 10 On Creation of Additional Conditions for Investment Activities in the Republic of Belarus was truly one of the most progressive documents, “It has produced a tangible effect in terms of attracting investors, creating new industries. Unfortunately, you cannot patent a decree, so many of our neighbours started using the Belarusian innovations envisaged by that document. After a certain period of time, it became necessary to see what other tools we can use in order to maintain investment activity.”
By analysing the international experience, the Government ‘has found the anchors that will attract new investors to Belarus’, and, as the Prime Minister stressed, ‘exactly into the spheres we need’. “This does not mean that we experience an acute investment hunger. Absolutely not. At the same time, we need investors in the areas that are currently in demand by the economy,” he said.
Speaking about concrete examples, Mr. Golovchenko mentioned the pharmaceutical industry. At present, more than 50 percent of drugs in Belarus are domestically produced, but the goal is to increase this share to 70 percent. The task is ambitious, and it requires the involvement of ‘status investors’. At the same time, the Prime Minister noted that, according to established world practice, such investors in the pharmaceutical industry should receive a guaranteed volume of repurchase of their products (so-called offset contracts).
“We lack such a provision in our legislation now. It is applied to individual decisions made by the Head of State. It is proposed to apply this right to a number of investment contracts – of course, when it will be beneficial to the state. This will guarantee the investor that he, at least, will enjoy a guaranteed demand for his products," Mr. Golovchenko said.
Another novelty of the bill is the construction of backbone networks at the expense of the state. According to the Prime Minister, some investors cannot afford this – especially in remote regions of the country, where there may not be enough communications for powerful production facilities. “If we want to attract investors there, then we should definitely give them an opportunity to use our backbone networks and communications. We believe this will also give a powerful impetus to the implementation of various projects, especially in the regions,” he noted.
The Government also proposes to introduce a mechanism of budget transfers to compensate for part of the investment costs. This practice is used in the agro-industrial complex and, in fact, it is an alternative to concessional lending.
In addition, the bill proposes to give districts the right to conclude investment agreements.
“We want to liberate the local initiative, and the Head of State always repeats this: we need to allow our lower level heads to manage the economy, so that the executive power is interested in implementing projects on its territories. Accordingly, such powers are needed. Previously, the lowest level was represented by regional executive committees,” Mr. Golovchenko said.
