Services

The service sector increased from 30 per cent of Belarus’ GDP in 1990 to around 50 per cent in 2010.

Services are mainly related to transport, trade and catering which reflects the favourable strategic geographical location of Belarus for West-East traffic (especially for goods involving Russia) given the relatively well maintained transport and communications network.

 A specific feature of the Belarusian economy, inherited from the Soviet era, is the highly developed public sector. One fifth of the population are employed in the field of education and healthcare: these areas are characterised by well-qualified professionals and a good quality of services provided.

In fact, Belarus has one of the highest numbers of physicians proportionate to the population (5 per 1000 inhabitants in 2009; compared to 3 per 1000 in the EU).

 In the USSR Belarus was one of the leading republics in scientific research, it was at the vanguard of productive technologies. Although over the years of transition, science has declined as much as any other sector in Belarus, the country still outscores the neighbouring Poland, Ukraine, Latvia, Lithuania and Estonia as far as resident patent applications are concerned (4 per 1000 of labour force, which is the same in Russia and the EU).

In central planning, the financial system of Belarus consisted of a single-tier banking structure – the National Bank.

Since the collapse of the USSR, a legal basis for the creation of a financial market has been created: by 2010, a two-tier banking system had been introduced, comprising of the National Bank of Belarus and several commercial banks.

The development of the banking sector has not been linear, however. One of its peaks was 1995, when the financial market was one of the most developed markets in Belarus. However, the arrival of Lukashenka led to the reintroduction of central planning elements in this sphere: the National Bank was put under direct state control. The state has also been interfering substantially with the activity of commercial banks, mainly by obliging them to provide credits for the agriculture and construction sectors: in 2010 more than 60 per cent of all banking credits originated within government-directed programs.

Since recently, the government directed lending programs were disbursed through a state-owned bank, the Development Bank.

At the moment, the financial market in Belarus ranks probably the worst among its regional peers. It is shallow in terms of the number and volumes of assets traded as well as the number of participants. Institutionally, it is mainly represented by the Belarusian Currency and Stock Exchange (99 per cent of shares held by the state) and other administrative units.

The biggest volume of all financial operations is accounted for by currency (70 per cent) and state securities (20 per cent). The development of the stock market has been impeded by the lack of provision for corporate property, and since property is largely state-owned, a private stock exchange is negligible.