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WORLD CRISIS AND BUSINESS IN BELARUS Mikhail Kovalev. Consumption and Savings Problems high consumption level hypothec boom low savings level (mainly USA) Barrier 1: restriction of capital in hypothec Barrier 2: risk retail banking and rate of savings. Monetary Problem - PowerPoint PPT Presentation
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WORLD CRISISAND
BUSINESS IN BELARUS
Mikhail Kovalev
Consumption and Savings Problems
high consumption level
hypothec boom
low savings level (mainly USA)
Barrier 1: restriction of capital in hypothec
Barrier 2: risk retail banking and rate of savings
Monetary ProblemWorld GDP2008= $60 689 bln – nominal
= $69 000 bln - by PPP
World Trade2008≈$14 000 bln
FDI ≈ $1 000 bln
New approach to the equation of quantity of money:
P∙GDP=MVCountry M3/GDP
Japan 134
UK 112
US 65
China
Ukraine 30
Russia 27
Belarus 15
USD Problem
USD: - world currency
USD: - national currency
Senyorage
Debt – $11 000 bln
China, Russia – new world currency (example: SDR)
Dynamics of Payment Balance in the USA
-455-417
2517
2337
2204
1997
1769
1514
1399
1370
14501070
-430
-485
-551
-670
-787
-838
-815
-681-673
-788
-811
-755
-640
-522
-460
-385
1836
1628
1446
1283
1157
1017
975
1084
2008
2007
2006
2005
2004
2003
2002
2001
2000
$ mlnDeficit of trade balance Deficit of current account Import Export
Creditors Ranking of the USA Government Treasury, $ bln
1. China 739,6
2. Japan 634,8
3. Oil Exorters 186,3
4. Offshore 176,6
5. Brasil 133,5
6. UK 124,2
7. Russia 119,6
8. Luxemburg 87,2
9. Taiwan 73,3
10 Hong Kong 71,7
11 Switzerland 62,1
12 Germany 56,4
Total: 3073
Source: finance.yahoo.com
Derivatives Growth (bln of contracts)
1512
108,58
6
0
2
4
6
8
10
12
14
16
2002 2003 2004 2005 2006 2007
Liberal Rules and ICT-opportunities turned the capital into the speculative one’s and create
disbalance of real and financial sector of economics
Source: WFE/IOMA 2007 Derivatives Market Survey
Source: Bank of International Settlements, www.bis.org
Source: Bank of International Settlements
Demographic disbalance
3/5 bln.
2,5/4 bln.
1/1 bln.
4 Silver billions
The rest of the world
BRIC (Brazil + Russia + India + China) + other asian countries
USA + EU 27 + Japan + Canada + Australia + et alias.
Population size 6,5 / 10 bln.
Golden Billion
14,3
2 + 2,3 + 3,3 + 7,9
+ 2 = 17,5
14,3 + 15,3 + 4,3 + 1,3 + 0,8 + 1,2 = 37,2
GDP by PPP in 2008. $69 000 bln
GDP by Purchasing-Power-Parity of world leading countries in 2008,
$ bln. (Belarus – $118,9 billion)
EU2715,3
USA14,3
Japan4,4
others19,5
Brazil2
Russia2,3
India3,3
China7,9
Consensus PrognosisGDP Growth
1Q09 09 10 11
USA -5.7 -3.0 1.4 2.4
Eurozone -2.5 -3.7 0.4 1.2
EU27 -2.4
Japan -4 -6.3 1.0 1.3
China 6.1 7.0 7.9 9.0
Economic Development Indicators of particular countries in 2008
CountryPopulation
(mln) Area
(km2)
GDP by PPP
(billion of intern. $)
Export of goods and services (billion of
$)
GDP by PPP
(thousand of $ per capita)
World 6 750 149 000 000 68 996 14 838 10.2
EU 27 500 4 324 782 15 247 2037 30.5
USA 306 9 826 630 14 264 1427 46.9
China 1 328 9 600 000 7 916 1067 6.1
Japan 127 377 873 4 354 773 34.1
India 1 148 3 287 240 3 288 194 2.8
Russia 142 17 075 400 2 260 334,6 15.9
Ukraine 46 603 628 337 49 7.3
Belarus 9.6 207 600 119 22 12.3
BUSINESS IN BELARUS
Business in Belarus Human and Labour Resources
0,935
0,87 0,862
0,804 0,8020,788
0,7
0,75
0,8
0,85
0,9
0,95
Germany (23) Poland (37) Lithuani (43) Belarus (64) Russia (67) Ukraine (76)
Population – 9,6 mln (UN: 2050 – 7,7 mln)Urban population – 73,4%
Workforce – 4,5 mlnLiteracy – 99,6%
Human Development Rank 2008
Business in BelarusUnemployment rate
4,0
0,81
1,0
1,2
1,5
1,93,1
2,7
2,32,12,1
2,3
2,8
2,9
2,1
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Q1
%
Source: IMF
Business in Belarus GDP Growth
8,310
1,2
8,1
9,9
9,4
11,4
7,05,05,0
5,8
3,4
11,4
2,802468
1012
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Q1
%
Business in BelarusEnergy Shock
7,38,4
12,1
0,78
7,3
10,4
13,7
2,71,61,3 3,72,2
5,42,62,1
0,5
2,2 2,3 34,5
5,5
0,5
2,1
10,90,9
0,70,50,50,70
2
4
6
8
10
12
14
16
1996 2000 2001 2002 2003 2004 2005 2006 2007 2008
$ b
ln
export (oil products) import (oil products) gas import
22,2
27,6
37,3
30,4
41,8
2,2 2,85,3
6,7 7,8 7,1 6,4 7,6 8,59,3
11,6
15,7
18,2
23,8
17,9
17,2
12,29,898,1
6,78,18,7
7,35,83,22,6
-3
2
7
12
17
22
27
32
37
42
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Export Import
$ bln.
Business in BelarusThe secret of success: export
Problem: high import
Business in BelarusThe secret of success: export
1334 1277 1098 1171 13382071 2147
27273623
50786371
7664
9234
14428
516421348241232 8127317530
2000
4000
6000
8000
10000
12000
14000
16000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
export in EU27 including Germany
Business in BelarusThe secret of success: growth of
agricultural production
6,6
-4,9
8,94,16,0
1,7
12,6
6,6
0,71,8
9,3
-8,3
-0,72,4
-4,7-10
-5
0
5
10
15
1995
1996
1997
1998
1999
2000
2001
2002 20
320
0420
0520
0620
0720
08
2009
, IV
%
Business in BelarusThe secret of success: export of
agricultural production
503605 638
832
11441329
1484
1816
2235
0
500
1000
1500
2000
2500
2000 2001 2002 2003 2004 2005 2006 2007 2008
$ m
ln
Business in BelarusThe secret of success: knowledge
ex. Export of IT-service in 1994 - 2008
49,5
160
94
26,417,517,412,36,75,33,95,92,11,10,2
0
50
100
150
200
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
FDI dynamics in Belarus in 2001-2008, mln. $
2279,8
1769
35130316396 453
170 28,9%
16%36,2%
374,7%
-20% -62,4%-4,6%
404%
0
500
1000
1500
2000
2500
2001 2002 2003 2004 2005 2006 2007 2008
-100%
0%
100%
200%
300%
400%
500%FDI, min. S Growth rates, %
Largest M&A 2007-2008GazProm is in the process of acquiring a control share holding of BelTransGaz ($2, 5 billion)Russian banks strengthened their position in Belarus through acquisitions of controlling stakes in 4 medium-sized Belarusian banks (VTB, Alfa Bank, VneshEconomBank, RosBank)Mobilkom Austria Group acquired 70% of a mobile service provider «MDC»(Velcom) for EUR 730 millionTurk Cell acquired formerly state- owned mobile phone operator BEST for USD 600 millionHome Credit Group (Czech Republic) acquired the controlling stake in «Lorobank»Getin Holding S.A. (Poland) acquired 75.04% stake in a Belarusian «Sombelbank» Baltic Beverages Holding (Carlsberg) acquired JSC «Alivariya» (3d largest beer-producer in Belarus)Heineken NV bought Syabar brewery, (2d-largest beer brand in Belarus) Heineken NV invested 6.4 Euro mln. In 51% stake in Rechitsa BreweryOlvi plc (Finland) acquired a majority holding in a Belarusian brewery Lidskoe Pivo for 16 mln.$
Business in BelarusExport of goods in 2008 - 2009
2419
,6
2651
,2 2939
,5
2852
3083
,1
3307
,732
38,9
3069
,5
3019
,726
62,1
1921
,7
1737
,112
99,6
1334
,5
1469
,3
0
500
1000
1500
2000
2500
3000
3500
january
febru
ary
mar
chapril
may
june
july
august
septem
ber
october
novem
ber
decem
ber
january
(2009
)
febru
ary
mar
ch
$ m
ln
Business in BelarusExport – Import of goods in 2008-2009гг.
2419
,626
51,2
2939
,5
2852
3083
,133
07,7
3238
,930
69,5
3019
,726
62,1
1921
,7
1737
,112
99,6
1334
,514
69,3
2623
,728
83,3
3257
,234
74,9
3461
,638
24,940
69,4
3650
,1
3540
,5
3317
,4
2542
,328
37,6
1761
,9 1977
,2
2230
,6
0
500
1000
1500
2000
2500
3000
3500
4000
4500
janua
ry
febru
ary
mar
chap
rilm
ayju
ne july
augu
st
sept
ember
octo
ber
novem
ber
decem
ber
janua
ry (2
009)
febru
ary
mar
ch
$ m
ln
Export Import
Business in BelarusGross External Debt
2,83,8 3,7
4,8
7,9
9,5
4,24,9 5,1
6,8
12,5
14,8
1
3
5
7
9
11
13
15
17
2003 2004 2005 2006 2007 2008
$ bln
Business in Belarus
64
45
15,6
1,5 3,6
16
35
47
12,3
36
0
10
20
30
40
50
60
70
Germany USA Poland Belarus Russia
$ t
ho
us
an
d
GDP by PPP per capita Gross External Debt per capita
Exports and Imports split by sector, 2008
export import
6,8
18,9
17,7
18,7
37,9
7,9
11,7
18,6
24,3
36,4Mineral products
Machinery, equipment andvehicles
Other
Chemical products, rubber,fibers, and filements
Food and agricultural rawmaterials
Business in Belarus
Dynamics of reserves in foreign currency
(2008 – 2009)
3
3,4
2,42,8
2,63,33,63,6
4,14,14,13,93,9
12345$ bln
Business in BelarusEase of Doing Business - Global rank
1
68 7085
103
120
145159
0
20
40
60
80
100
120
140
160
180
Singa
pore
Kyrgys
Kazak
hsta
n
Belar
us
Mol
dova
Russia
Ukrai
ne
Tajiki
stan
Business in BelarusRank of World Bank
2007 2008 2009Ease of Doing business 129 85
Starting a Business 148 121 97
Dealing with Construction Permits 84 93 65
Employing Workers 31 48 49
Registering Property 96 35 14
Getting Credit 171 126 109
Protecting Investors 142 101 104
Paying Taxes 175 181 181
Trading Across Borders 113 142 134
Enforcing Contracts 36 15 14
Closing a Business 91 72 71
Business in Belarus
Source: Doing Business, World Bank
Business in Belarus
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