Belarus

Basic information

Capital: Minsk
Population: 9.8 mio
Large cities: Brest, Grodno, Vitebsk, Gomel
Currency: Belarus Rouble
Languages: Belarusian, Russian
Government: Presidential Republic
Time zone: GMT+2
GDP: $ 77 bn. (2005)
Dialling code: +375
Internet TLD: .by

Overview: Belarus

An ex-Soviet country which enjoys a favourable geographical situation. It has a population of 9.8 mio. multi-ethnic and multi-confessional inhabitants, consisting of Belarussians, Russians and Poles. Orthodox Christians form the largest confessional group in Belarus, around 80 % of the population belong to this group. Belarus is a presidential republic, the president, Alexander Lukashenko, is in office since 1994. Due to its favourable geographical situation, Belarus can be regarded as a transit country. Around 50 % of Russian oil and 25 % of its gas flow towards Europe through Belarus. This fact and military agreements between the two countries have become the main sources of income for the country.

The Belarusian economy has not yet been transfomed into a market economy. It still is, as was the case in Soviet times, a planned economy supported by the government. The economy is stable, but it remains dependent on relations with Russia. Germany ranks fourth among the country’s main trading partners. With his politics, the president aims to protect the domestic economy against takovers from other countries, which may have an influence on possible investments. 

Overview IT provider market

In Sowjet times, Belarus, which is poor in raw materials, was one of the main IT- and electronics suppliers of the USSR. The relevant training centres bring forth thousands of IT specialists each year, and the experts usually have an excellent training and experience with the latest technologies. In recent times, however, an increasing emigration of IT resources can be noted, with the prices of suppliers developing accordingly. The legal situation also has an influence on the co-operation with Belarusian companies, but the president’s recent initiatives such as „electronic Belarus” and the „Park of high technologies“ in Minsk make a very good impression and set the development of the IT outsourcing industry as a high-priority goal.

SWOT analysis

Strength

• Government support through tax benefits, IT outsourcing is described by the government as a direction of development.
• The prices for software deveopment in Belarus are competitive on the IT market and even lower than that in other ex-USSR countries. At the same time, the IT products’ quality and the relevantspecialists’ qualification have improved. There is a lot of flexibility and little bureaucracy in the companies in Belarus. 
• Staff qualificatiob
• Similarity between the cultures as well as the favourable geographical situation regarding Western European countries helps keep the transaction costs low.  

Weakness

• Strong competition regarding experienced staff
• Belarus is on the „watch list“ of the American coalition “International Intellectual Property Alliance” (IIPA) and is therefore among the countries guilty of the gravest copyright violations.
• Belarusian law is complicated and contradictory in parts.

Opportunities

• The „Park of high technologies“ offers many benefits for IT companies. They are exmpt from several taxes, which enables them to prepare more competitve tenders.There is a tendency of Belarusian IT companies to consolidate and merge – many activities aimed towards consolidation have been started in Belarusian outsourcing companies. This consolidation secures the size of the Belarusian companies, while at the same time safeguarding their
• stability and ability to take on board larger projects.

Threat

• Security – Belarus ranks 110th among the 178 countries of the World Bank’s list „Easy of doing business and speedy change in legal conditions and the back-dating of laws is absolutely possible in Belarus.
• The development of Russian oil and gas export prices for Belarus may possibly influence the Belarusian economy strongly.