3. International Business Activities in Belarus

Since the collapse of the Soviet Union, when Belarus was almost closed for foreign businesses, very little has changed in fact. The early 90-ies saw an influx of multinationals starting their operation in the country (for example, Coca-Cola, Wella, Ford Union, etc.). But as the situation has substantially hardened since 1994, with numerous restrictions and regulations imposed, the number of new foreign companies opening in Belarus has dropped almost to zero.

The problems which occur hereby are but evident: since the Belarus' infra­structure and industrial complex are extremely underdeveloped, they require a great deal of investment, which cannot be obtained in the domestic market; the same is true for the research and development activities. Taken as a whole, the problem is that ex­tremely high regulation level of international business prevents the country's econ­omy from receiving a desirable inflow of foreign investment.

The solution to this problem is complex and includes a great variety of op­tions, but there are certain measures that must be taken by all means to provide a basis for successful international business activities in Belarus. First, one needs to liberalize foreign exchange policy. Then, an adoption of more liberal taxation and licensing regulation acts is sure to enhance international business. Next, the government will have to provide serious guarantees for the security of private property and introduce more liberal procedures for foreigners to purchase property, including land. Finally, it is necessary to provide stable and sufficient flow of investment. It is in Belarus' inter­ests to normalize its relations with the World Bank, IMF, and WTO.

The above measures seem quite radical in relation to the current situation in Belarus. So one can hardly expect these steps to be implemented, as long as the gov­ernment sticks to the policy of utmost administrative control over the economy.

(Yura K.. a 3^rd- year student)

4.Monetary Policy of Belarus: Problems and Solutions

Economies in transition face a wide range of problems concerning changes in economic structure and infrastructure, introduction of new forms of ownership, stabi­lization of national currencies, and liberalization of international business relations. In Belarus these problems tend to become more acute due to inconsistent policy of the government.

Monetary policy of Belarus seems to be the most complex sphere of the over­all economic policy. It incorporates a set of interconnected problems whose solving is crucial for the development of the economy as a whole in the modern market envi­ronment. Constant depreciation of the local currency, the Belarusian Rubel, combined with high rates of inflation and multiplicity exchange rate form a negative background for efficient production and further integration of Belarus into the pattern of economic relations.

The government cannot but search for resolving these problems. Strict control of prices has been established, an official exchange rate was fixed at an overvalued level, plus denomination of the national currency has been announced without any guarantees of its stabilization. As a result, the black market is prospering, the inflation is speeding up, with printing empty money still going on, thereby turning the Belaru­sian Rubel into useless paper. The national currency is losing its main functions, such as the measure and store of value and means of payment.

Meanwhile, there exist market solutions of the monetary policy problems. Alongside with a complete set of structural reforms, the government should take some urgent measures in order to curb inflation, including imposing tough budget con­straints, liberalization of prices, and establishing an independent banking system.

Combined with a secure system of law, the above measures will also contrib­ute to attracting foreign investment and encouraging more efficient production. They will become an excellent foundation for further reforms and growth.

(Anna A., a 3^rd-year student)