1. WORLD CRISIS AND BUSINESS IN BELARUS Mikhail Kovalev

2. 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

3. Monetary Problem World GDP 2008 = $60 689 bln – nominal = $69 000 bln - by PPP World Trade 2008 ≈$14 000 bln FDI ≈ $1 000 bln New approach to the equation of quantity of money: P∙GDP=MV CountryM3/GDP Japan134 UK112 US65 China Ukraine30 Russia27 Belarus15

4. USD Problem USD: - world currency USD: - national currency Senyorage Debt – $11 000 bln China, Russia – new world currency (example: SDR)

6. Dynamics of Payment Balance in the USA

7. Creditors Ranking of the USA Government Treasury, $ bln 1.China739,6 2.Japan634,8 3.Oil Exorters186,3 4.Offshore176,6 5.Brasil133,5 6.UK124,2 7.Russia119,6 8.Luxemburg87,2 9.Taiwan73,3 10Hong Kong71,7 11Switzerland62,1 12Germany56,4 Total:3073

8. Source: finance.yahoo.com

13. Derivatives Growth (bln of contracts) Liberal Rules and ICT-opportunities turned the capital into the speculative one’s and create disbalance of real and financial sector of economics

14. Source: WFE/IOMA 2007 Derivatives Market Survey

15. Source: Bank of International Settlements, www.bis.org

16. Source: Bank of International Settlements

17. 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 14,314,3 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

18. GDP by Purchasing-Power-Parity of world leading countries in 2008, $ bln. (Belarus – $118,9 billion)

21. Consensus Prognosis GDP Growth 1Q09091011 USA-5.7-3.01.42.4 Eurozone-2.5-3.70.41.2 EU27-2.4 Japan-4-6.31.01.3 China6.17.07.99.0

22. Economic Development Indicators of particular countries in 2008 Country Population (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 750149 000 00068 99614 83810.2 EU 27 5004 324 78215 247203730.5 USA 3069 826 63014 264142746.9 China 1 3289 600 0007 916 10676.1 Japan 127377 8734 35477334.1 India 1 1483 287 2403 288 1942.8 Russia 14217 075 4002 260 334,615.9 Ukraine 46603 628337497.3 Belarus 9.6207 6001192212.3

23. BUSINESS IN BELARUS

24. Business in Belarus Human and Labour Resources Population – 9,6 mln (UN: 2050 – 7,7 mln) Urban population – 73,4% Workforce – 4,5 mln Literacy – 99,6% Human Development Rank 2008

25. Business in Belarus Unemployment rate Source: IMF

26. Business in Belarus GDP Growth

27. Business in Belarus Energy Shock

28. Business in Belarus The secret of success: export Problem: high import

29. Business in Belarus The secret of success: export

30. Business in Belarus The secret of success: growth of agricultural production

31. Business in Belarus The secret of success: export of agricultural production

32. Business in Belarus The secret of success: knowledge ex. Export of IT-service in 1994 - 2008

33. FDI dynamics in Belarus in 2001- 2008, mln. $

34. Largest M&A 2007-2008 GazProm is in the process of acquiring a control share holding of BelTransGaz ($2, 5 billion) Russian banks strengthened their position in Belarus through acquisitions of controlling stakes in 4 medium-sized Belarusian banks (VTB, Alfa Bank, VneshEconomBank, RosBank) Mobilkom Austria Group acquired 70% of a mobile service provider «MDC»(Velcom) for EUR 730 million Turk Cell acquired formerly state- owned mobile phone operator BEST for USD 600 million Home Credit Group (Czech Republic) acquired the controlling stake in «Lorobank» Getin Holding S.A. (Poland) acquired 75.04% stake in a Belarusian «Sombelbank» Baltic Beverages Holding (Carlsberg) acquired JSC «Alivariya» (3 d largest beer-producer in Belarus) Heineken NV bought Syabar brewery, (2 d -largest beer brand in Belarus) Heineken NV invested 6.4 Euro mln. In 51% stake in Rechitsa Brewery Olvi plc (Finland) acquired a majority holding in a Belarusian brewery Lidskoe Pivo for 16 mln.$

36. Business in Belarus Export – Import of goods in 2008-2009гг.

37. Business in Belarus Gross External Debt

38. Business in Belarus

39. Exports and Imports split by sector, 2008 exportimport

40. Business in Belarus Dynamics of reserves in foreign currency (2008 – 2009)

41. Business in Belarus

42. Business in Belarus Rank of World Bank 200720082009 Ease of Doing business 12985 Starting a Business 148 12197 Dealing with Construction Permits 84 9365 Employing Workers 31 4849 Registering Property 96 3514 Getting Credit 171 126109 Protecting Investors 142 101104 Paying Taxes 175 181 Trading Across Borders 113 142134 Enforcing Contracts 36 1514 Closing a Business 91 7271

43. Business in Belarus Source: Doing Business, World Bank

44. Business in Belarus