WORLD CRISIS AND BUSINESS IN BELARUS Mikhail Kovalev

1. WORLD CRISISANDBUSINESS IN BELARUSMikhail 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 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=MV

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

8. Source:finance.yahoo.com

13. Liberal Rulesand ICT-opportunitiesturnedthe capital intothe speculative one’s and createdisbalance of real and financialsector of economics Derivatives Growth (bln of contracts)

14. Source:WFE/IOMA 2007 Derivatives Market Survey

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

16. Source:Bank of International Settlements

17. GDP by PPP in 2008. $69 000bln Population size 6,5 / 10 bln. The rest of the world 14,3 3/5 bln. BRIC (Brazil + Russia + India + China) + other asian countries 4 Silverbillions 2 + 2,3 + 3,3 + 7,9 + 2 = 17,5 2,5/4 bln. 1/1 bln. Golden Billion USA + EU 27 + Japan + Canada + Australia + et alias. 14,3 + 15,3 + 4,3 + 1,3 + 0,8 + 1,2 = 37,2 Demographicdisbalance

18. GDP byPurchasing-Power-Parityof world leading countriesin 2008,$ bln. (Belarus – $118,9billion)

21. Consensus Prognosis GDP Growth

22. Economic Development Indicators of particular countries in 2008

23. BUSINESS IN BELARUS

24. Business in BelarusHuman 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 BelarusUnemployment rate Source: IMF

26. Business in Belarus GDP Growth

27. Business in BelarusEnergy Shock

28. Business in BelarusThe secret of success: exportProblem: high import

29. Business in BelarusThe secret of success: export

30. Business in BelarusThe secret of success: growth of agricultural production

31. Business in BelarusThe secret of success: export of agricultural production

32. Business in BelarusThe secret of success: knowledgeex.Export of IT-service in 1994 - 2008

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

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

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

37. Business in BelarusGross External Debt

38. Business in Belarus

39. Exports and Imports split by sector, 2008export import

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

41. Business in Belarus

42. Business in BelarusRankof World Bank

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

44. Business in Belarus