Updated at 17:39,28-11-2020

How “the country from the center of Europe“ appeared between Sierra Leone and Liberia?


Belarus is at 153 place in the 2012 Index of Economic Freedom, compiled by the Institute Heritage Foundation together with The Wall Street Journal.

The Index of Economic Freedom is based on ten measurements, including business freedom, trade freedom, fiscal freedom and freedom from corruption. In total this year in the ranking are included 179 of the world countries, the most "free" of them are Hong Kong, Singapore and Australia.

Between Sierra Leone and Liberia

Belarus is located at the 153 unenviable place among African countries such as Sierra Leone and Liberia. Analysts have noted that corruption remains widespread in our country, and the protection of property rights is prevented by the inefficient judicial system and bureaucracy. The reform process in business was recognized as uneven and incomplete, and the level of intervention and state control in the economic sphere is still too high.

UDF.BY correspondent together with the doctor of economic sciences Boris Zheliba and chairman of the Presidium of Republican Confederation of Entrepreneurship Vladimir Karyagin was figuring out what causes that "the country from the center of Europe" in terms of economic freedom is more similar to Liberia, than, for example, to Lithuania and Poland.

According to the experts, the Index of Economic Freedom is not just an intellectual game of Western economists, and certainly not the machinations of the "world backstage", but rather an objective measure of the economic situation and investment climate in a country.

"Index of Economic Freedom is one of the most important and respected in the world, - says Vladimir Karyagin. - He is worthy of attention and scrutiny. We can be happy or unhappy with the position of our country in it, but any index is a mirror which is silly to blame".

Boris Zheliba emphasizes, the ratings have an impact on the size of foreign direct investment. Moreover, investors and analysts closely watch not only for the legal framework, but also for the legal practice in studied countries.

What prevents the liberalization?

Experts are paying particular attention to the fact, that one of the main problems in Belarus - the divergence between words and actions of officials. Such unsystematic and inconsistent actions are noticed by the index producers too.

"A lot of positive can be seen in famous Presidential Directive № 4. But in the last year, 76 points from 143 were not implemented by ministries and departments, very slow procrastination is going on, the authorities are not consistent", Karyagin said.

Directive № 4, to which many attributed their hope for substantial liberalization, haven't worked yet even at half-strength, the professor Zheliba thinks.

"Too much is written only on paper, but in reality nothing has changed", said the expert. He cites as an example the progressive permission given to entrepreneurs to redeem the rented areas, which in fact didn't work because of the officials. Those are not willing to lose the opportunity to receive the budgeted cost of rent. "The problem is that in our country, in the first place are not the laws of economic feasibility, but the whims of bureaucrats", Zheliba says.

It should be noted, there are small forward movements. In 2009 our country was in the ranking at 167 position, now at 153. Karyagin and Zheliba are also see some minor improvements:

"A lot of positive decisions are being made: reducing the profit tax from 24 to 18%, an opportunity to re-register the company in Minsk via Internet, from the beginning of this year statistical reports can be submitted in electronic form, - Karyagin notes with cautious optimism. - Many initiatives are being considered. Hopefully, in 2012 everything will happen much faster and more consistently".

"Life is gradually forcing the authorities to consider the business as the main driver of economics. I want to believe, the Belarusian authorities will learn lessons from the 2011 situation", Boris Zheliba shares his expectations.

Belarus' joining the Common Economic Space also lets to cherish some hopes for liberalization:

"We've entered the CES, and gradually our legislation will shift to Russian and Kazakh standards. But, as always, in Belarus everything depends on specific decisions of the certain person, so life will show", Zheliba sums up.