Belarus’ reputation as the best place to bury your business or scare the investors away is steadily fading.
This is mostly due to global success of the country’s Hi-Tech Park and well-known business giants such as Wargaming, EPAM Services and Viber.
Tech savvy paved the road to foreign investors and now it’s high time for Belarus to walk it.
The High-Tech Park in Minsk, Belarus
In a new article, the Forbes explores the latest changes in Belarus economic landscape, its openness to foreign investors and new markets.
For decades, Russian export demands, its oil refinement and occasional subsidies from the Eastern neighbour formed the Belarus economic model. But times change.
The author repeatedly highlights that now the country uses its chance of global deluge-liquidity to entice foreign capital and get rid off its over-dependence on external factors.
“The government floated a eurobond in June and got $1.4 billion from foreign funds. On October 17, Belarusian supermarket chain Eurotorg did even better.
They raised $350 million in five-year bonds priced in dollars. It was oversubscribed four-fold to around $2 billion on the B-rated credit.
It was the first corporate bond ever to be fundamentally based on the wiles of the Belarusian economy,” the article goes.
According to the latest Moody’s Investors Service data, Belarus will highly unlikely need money from the International Monetary Fund in the near future.
Capital from the Russian government, foreign lenders, and foreign companies are coming in. Eurotorg latest deal stands as a solid proof to that.
In Belarus, tech is a part of the domestic story
While Eurotorg is the current star of the show, Belarus’ best brands are companies, co-founded or owned by Belarusians.
A unique branded airliner Boeing 737-300 with the logo of Wargaming’s World of Tanks
“Eurotorg is just a domestic story so no one around the world knows what it is,” says Alexander Martinkevich, deputy director of the Belarus Hi-Tech Park (HTP).
“What is a country’s brand? For Germany, it’s Mercedes. For the U.S., maybe it is Apple today, or Google. In Belarus, we are popular because of Viber. Because of World of Tanks.
And because of these products, we have become famous around the world to companies in-the-know. The real Belarus growth story is in IT and only in IT.”
Read also: Why is Belarus tech booming?
Hi-Tech Park Belarus is a special economic zone with a special tax and legal regime for IT companies. There are 187 companies with over 30,000 professionals registered in the HTP system.
The author mentions Epam Systems, a global provider of software engineering and IT expertise, Viber, the creator of a successful messaging app; and Masquerade, a Minsk-born collective that sold its selfie app MSQRD to Facebook,
Among other successful tenants of the Park are AI Matter start-up that was bought by Google for an undisclosed sum, and Minsk-based app developer Apalon bought by a division of IAC (IACI).
Economic recovery driven by people and the state
“The thing about Belarus is we have limited natural resources, no sea access and a high dependence on external factors beyond our control.
The main resources we have are Belarusians,” Prime Minister Andrei Kobyakov said in an interview with Forbes Magazine.
Students invited to participate in career guidance meetings in the Hi-Tech Park
The magazine also hails the old Soviet system of education in the math and sciences that gives birth to 16,000 technical graduates every year.
Proximity to the EU, the abundance of skilled IT specialists, elaborated technical infrastructure and low level of brain drain makes an attractive outsourcing partner.
According to Ernst & Young, Belarus “managed to build a mature export-oriented software development industry”.
It became a strong player on the Europe IT services market in just 10 years. It is now ranked number 9 for best outsourcing shops in the Europe, Middle East, and Africa region.
Read also: 10 things Belarus is famous for in the world
Besides, the tech sector is helping Belarus be less dependent on Russia that accounts for nearly 40% of Belarusian exports, while the IT sector accounts for just 3.2% of exports.
Last year, the sector helped make tech a larger part of the economy, accounting for 10.5% of services GDP and 5.1% of total GDP.
“We developed the best business plan for the IT industry because it’s not a physical place. It’s nationwide. It doesn’t matter where you set up your office.
We have the brain power and you can see that the international companies that buy Belarusian companies are keeping their research and development teams here,” Martinkevich sums up.