Minsk continues its active efforts to attract foreign investments, primarily focusing on Russian capital. Since the World Bank (and several other organizations, including the Russian agency ACRA) stopped including Belarus in their ratings “due to data distortion,” there is little left to support the myth of the country’s attractiveness for foreign investors. As a result, local “improvised” methods have had to be employed.
Belarusian authorities remain active in attracting Russian investments into the economy. On November 1, Deputy Minister of Economy Vladimir Naumovich reported on this at a joint meeting of the boards of Russia’s Ministry of Economic Development and Belarus’s Ministry of Economy. Efforts are being made to promote topics like contractual and legal cooperation and the implementation of projects in the real sector of the economy. However, details on specific projects are traditionally scarce. On November 28, Russia’s First Deputy Prime Minister Denis Manturov stated that Russia is ready to provide funding for joint projects with Belarus if there is “mutual interest.”
According to the Ministry of Economy, the results of investment cooperation between the two countries in the first half of the year show positive trends. Russian investments in the Belarusian economy increased by 6.8%, while net foreign direct investment (FDI) rose by 43.6%. (Note: Foreign direct investment refers to funds used to establish enterprises under the investor’s control within Belarus.)
When Belarusian authorities report something optimistically, such as growth figures, it is essential to identify where declines or stagnation occur. According to Belstat, from January to June 2024, foreign investors poured USD 4.1 billion into the Belarusian economy. In the same period last year, the amount of foreign investment was USD 4.5 billion, a decrease of USD 400 million. Thus, the “investment boom of 2023” ended rather quickly, as experts had long predicted.
For the first half of 2024, Russia accounted for the overwhelming share of foreign investments – 66.8% (up from 57.1% a year earlier and 63.1% for all of 2023). Investors from Cyprus (predominantly of Russian origin) contributed 9.7% of the total investment, while the UAE accounted for 7.5%. Despite the increase in Russian investments, there is a continuing decline in investments from other countries, including friendly nations. Over the past year and a half, Iran halved its investments in Belarus, and Israel’s investments decreased ninefold. Investments from China and other post-Soviet countries also saw significant reductions.
Therefore, there are no improvements in the geographical structure of investments. On the contrary, there is a growing imbalance in favor of Russia, which has become the only significant investment hub for Belarusian authorities. The myth of Belarus’s investment attractiveness has long been dead, but Russia remains uninterested in such narratives.
