The Forum “Broadening the Horizons: Investment. Finance. Development” will take place 29-30 September in Minsk and gather more than 300 participants. One of the key topics is the investment government policy. Before this milestone event Natallia Nikandrava, Director of the National Agency of Investment and Privatization of Belarus, tells what the government is specifically planning to do on that front.
— In Belarus, you may hear at all levels that Belorussian economy needs investment. What specific steps does the government take today to raise foreign investment?
— In reality, nowadays there are reasonably attractive framework conditions for investors in Belarus. In our country they are given different preferences. Pretty high position of our country in Doing Business Report confirms this fact. Belarus ranked 44 in 2016 in comparison to 91th place 5 years ago.
At the same time, we understand that now is not the time to rest. Nowadays there is a high competition for investment in the world, and we should head to investors so that it will be Belarus which they choose while making decisions on starting new projects.
In particular, one of the improving measures for investment climate, that we initiated and that needs no financial placements, is the establishment of visa-free regime for foreign investors.
— In reference to which countries do you believe it possible to establish visa-free regime, and in what particular way do you suggest to facilitate visa formalities?
— We think that visa-free regime can be established relating to the main investing in Belarus countries. Our offers implying the establishment of visa-free regime won government departments and institutions support, and have already been sent over to the government.
Before creating this offer, we also analyzed other countries’ practice. For example, Kazakhstan already imposed visa-free regime for 19 countries in 2015 in order to create favorable conditions for foreign investors. This decision provides for possible entrance to Kazakhstan for up to 15 days on a business purpose without visa. In Kyrgyzstan visa-free regime for 44 was established even in 2012. Examples seem to indicate that such policy towards investors responds favorably.
In our opinion, visa-free establishment decision will be very handy in terms of the thaw in our relations with the European Union. Besides, it could contribute to facilitating visa formalities by the EU countries for the citizens of the Republic of Belarus.
— In your opinion, which other steps oriented to stimulating an inflow of foreign investment are to be taken?
— The National Agency is planning to accept the responsibility of coordinator at the Consultative board on foreign investment in the Council of Ministers. Now we are waiting for a decision on this question on the part of the government in order to get proper authorization.
From our point of view, the Council can become such an institution thanks to that we will manage to define concrete measures on the development in terms of doing business in the country with the support of business community.
— Natallia Mikhaylovna, to be sure, there are a lot of investment projects on administration sites that, however, do not actualize for years. From your point of view, is it necessary to organize the inspection of those projects, which the government is planning to promote and present to foreign investors, at the domestic level?
— Definitely, in certain cases the offers published on administration sites in reality turn up to be ideas. After all, project is the product which hast to be well established both from the technical and financial points of view. And only in this case it can stand on its feet and interest potential investors.
That is why it is necessary to call specific companies, which can evaluate the creditworthiness of the prepared offers, to realize present ideas.
By the way, expert support is also provided by the international financial institutions. Thus, during the forum taking place in Minsk 29-30 September, we want to share information about such possibilities with the project promoters. If today international organizations provide financing for project expert operations, it is worth taking advantage.
— Did the National Agency of Investment and Privatization analyze the real sector projects which it is planning to forward and systematically deal with?
— In August 2016 we extended grant financing agreement with the World Bank, according to which we attract foreign investment to the state-owned companies, for 2 more years.
We deliver this project in association with the World Bank since 2011. Eight companies, which were determined 5 years ago for pilot privatization, due to different reasons, still have not managed to attract investors.
At the end of July the Agency announced two tenders to attract strategic foreign investors for OJSC “Minsk Margarine Plant” and OJSC «Baranovichi Reinforced Concrete Products Pant». Besides, according to the approved Administration’s agenda for the next 5 years, we prepared additional enterprises to include them in our project.
Inclusive of gathered experience, we extended our powers within the agreement and in addition to the standard privatization we will also use other means of the attraction of investors to the state-owned enterprises, which includes the purchase of the additional issue of shares, or foundation of joint ventures, it will help not to constrain the modes of investment.
Also taking into account the background of experience, we prepared a new list of companies, which, from our point of view, are more likely to raise investment.
According to the World Bank’s conditions, the companies participating in this project have to show a profit, have prospects for the development, and stuff headcount up to 1000 people. Reasoning from these criteria we chose state-owned enterprises interested in foreign investors.
By now, we have visited 20 state-owned enterprises. In the coming months, we expect the governmental confirmation of additional enterprises list. The businesses, for which we are planning to attract investors, work in chemical, food, textile, and other industries.
— Belarus arranges investment forums on a regular basis: in Turkey in autumn 2015, in Austria in May 2016. What initiatives is the government planning to propose during the September’s forum “Broadening the Horizons: Investment. Finance. Development”?
— The goal we set is to make the event an annual meeting platform for investment sponsors and receivers, so that they could have a permanent dialog. We prepared the list of investment offers, which was formed taking the government’s and potential investors’ preferences into consideration.
The list of these offers we headed to the government in order to define the reasonability of their realization. And we expect that by the end of September we will have an agreed list of projects which we will be able to present during the forum.
— In what kind of projects are the investors interested most nowadays?
— They are very interested in refining complex and gas treatment plants, pharmaceuticals, renewable energy, and waste processing projects. Besides, foreign business is interested in machinery and equipment manufacturing. It is too early to announce the details, I only would like to notice that pretty famous companies show sustainable interest in this sphere.
— In July the government decided to transfer the management of the Public Private Partnership Center to the National Agency of Investment and Privatization. How are you planning to organize work on that front?
— We expect that the Public Private Partnership Center will start working on the base of the Agency from 1 September.
National Infrastructure plan for 2016-2030 has been already adopted; it provides the realization of pilot public-private partnership projects. It is a good sign that international financial organizations (European Bank for Reconstruction and Development, International Financial Corporation) have already shown interest in these projects. Maybe in the future the number of such projects will increase.
— What amount of money is to be invested now to implement these projects?
— For years the government annually has been spending about $2 bln on different infrastructure projects. Since the government requirement on such projects is increasing, there have been worked out the National Infrastructure plan for 2016-2030. It contains the pilot projects which the government is planning to implement in cooperation with the private investors.
The government requirement on extra financing is now estimated at $2,2 bln annually.
In the National Infrastructure strategy, the project prepared by our Agency upon the government decision, there will be stated the government requirements of high priority in the sphere of public-private partnership in order to define the projects we will be implementing in the near future.