Foreign investments in Belarus in the 1st half of 2022
Photo: freepik.com
In August, the value of statistics on attracting direct investment for half a year of foreign investment of the year. In 2022, the documents reported on the growth of investments and compared them with the year of issue.
Let’s analyze the presented data.
Background
Foreign direct investment (FDI) on a net basis (excluding direct investor for goods, works, services) for 2020 regular observations in the list of parliamentarians for the socio-economic development of Belarus for the year. Thus, the official forecast for 2020 provides for attracting at least $1.7 billion of FDI to the country on the basis of. However, according to Belstat, the actual income for the specified year amounted to 1414.8 million US dollars, the actual performance of the forecast was 83.2%.
Over the past years, the forecast for attracting FDI based on coincided with reality only in 2018. That year, the Council of Ministers received at least 1.4 billion US dollars, and the economic economy attracted 1634.9 million US dollars (116.8% of the forecast volume ).
Reference: Foreign direct investment based on net ownership (excluding the direct investor for goods, works, services) is the inflow of FDI minus their withdrawal, adjusted by organizations, shares (stakes in authorized funds) that are held in state ownership and sold to non-residents of Belarus.
Data on FDI in Belarus are released quarterly. In January-March, the Belarusian economy attracted $1,818.3 million in investment on a net basis, and last year saw a net investment outflow of $100.4 million. Such an investment picture in the context of quarters is the subject of observation for the Republic of Belarus. Statistics fixes the bulk of investments in the 1st quarter, after which their outflow can be observed in the 2nd and 3rd quarters. repatriation of profits by foreign beneficiaries exceeds the gross inflow of investments into the country. The repatriation of profits to foreign asset owners usually occurs through the accrual and payment of dividends.
FDI in various sectors of the economy
Following the results of 6 months of employment, the Belarusian economy attracted 1,717.9 million US dollars of FDI based on. Compared to the revised 2021 period, FDI inflows increased by 45%.
Also, the volume of investments in January-June 2022 turned out to be the fastest since 2014 (the current calculation methodology was the frequency directive of Belstat dated July 29, 2014 No. 127). The previous maximum attracted FDI for the year half year is 1394.2 million US dollars and was set 8 years ago.
Grounds-based FDI includes ex post investment in the economy, banking sector and acquisition of real estate by non-residents from residents of Belarus. In January-June 2022, FDI based on the real sector of the economy amounted to USD 1,412.6 million. The volume of investments in the real sector increased by 49.4% compared to the same period in 2021.
FDI based in the banking sector for the first half of the year verified 255.9 million US dollars. Compared to the revised period of 2021, the volume of investments increased by 29.8%. Banks of foreign countries are represented in the banking sector of Belarus.
According to the results of 6 months of 2022, the sale of natural resources – residents of real estate in Belarus to non-residents accounted for $42.2 million as FDI on a net basis (an increase of 14.3% compared to 2021).
Privatization of assets by non-residents and state regulation
Privatization processes by non-resident investors in 2022 are going poorly. The data of the State Property Committee confirm that in January-June the value of the sold blocks of shares, their ownership by the state (more than 10% in the authorized capital),
charge only 122.6 thousand US dollars (up from 128.1 thousand US dollars in 2021). The incidents got results in the Brest region.
consequence that, according to sub. 2.13 p. 2 Specified dated 14.03.2022 No. 93 “On additional measures for stable dynamics of the economy” it is prohibited to alienate the participation (shares) of legal entities of the Republic of Belarus, which are persons from foreign states that commit unfriendly actions against Belarusian legal entities and (or) individuals , shares (shares) in the authorized funds of legal entities according to the list determined by the reason of the Council of Ministers (its presidium). This list was Council of the Council of Ministers dated July 1, 2022 No. 436 “On the list of persons”. The list includes 190 positions, of which such companies as Euroopt CJSC, DANA ASTRA FLLC, LUKOIL Belorussiya FLLC, EPAM Systems FLLC, Dubai Water Front LLC, EUROTORG LLC, Triovist LLC, Lidskoye Pivo OJSC, Svetlogorsk Pulp and Cardboard Plant OJSC, Kommunarka SOJSC, SPARTAK JV OJSC, etc.
A list of foreign occupations has been defined, the occupation of which is prohibited from selling shares in Belarusian companies
A number of the closest shareholders intend to choose from Belarusian assets, despite the bans introduced in Belarus. In particular, in the semi-annual report of the Finnish group of companies Olvi it is reported that the sale of “Lida Pivo” “will be very likely within the next 12 months.” At the same time, Olvi admits that the alienation of the Belarusian asset requires permission to exercise the powers of the antimonopoly authority.
FDI in the context of an isolated
In the 1st half of 2022, the export volume of FDI based on received industrial organizations is 739.6 million US dollars. Compared to the revised period of 2021, the amount of investments increased by 59.8%.
Before the closing of external statistics in the context of commodity groups, up to 80% of the export offers of the Belarusian industry were oriented to the Russian market and the market of the CIS countries. In this regard, the growth of FDI in the industry may be predominantly just a revitalization of perceptions. The interest of Russians in a natural way increased after February 24 and on the scale of meetings in Russia. In such situations, Belarusian assets began to show up in terms of the partial capacity of broken production and logistics chains with Western countries.
The second place in terms of net FDI after industry was taken by the financial and insurance sector – USD 231.5 million (+ 2.8% compared to the first half of 2021), the third – by the construction sector (USD 175.1 million, growth in 6, 2 times), the fourth – wholesale trade (134.3 million US dollars, + 47.0%), the fifth – the sector of information and communication (93.8 million US dollars, a drop of 50.8%).
The reduction of FDI in the information and communication sector is the basis for the unfolding relocation of the domestic IT business. Official statistics show an increase in the number of dismissed in the IT sector over the number of hired specialists since March 2022. The frequent presence of IT companies in an increase with Belarus. These companies tend to cause partial or full relocation of staff due to excessive customer compliance identified after February 24th.
Territorial cut of investments
The lion’s share of FDI in 2022 will be organizations registered in Minsk. For 6 months of the total amount of FDI, the capital received the amount of 870.3 million US dollars (+40.7% to the volume of 2021).
The volume of investments in the region was several times or an order of magnitude lower than FDI in Minsk. This is partly due to the registration of head functions by foreign investors, and partly due to a decrease in the investment attractiveness of the regions (decreased consumer demand of the population, less pronounced quality, less developed labor market, etc.).
FDI on a net basis in the Brest region amounted to USD 92.7 million (+44.3% by 2021), in Vitebsk – USD 34.0 million (+25.9%), in Gomel – 80, USD 1 million (+25.9%). + 7.1%), in Grodno – 137.6 million US dollars (an increase of 2.3 times), in Minsk – 297.0 million US dollars (+ 33.0%), in Mogilev – 156.8 million dollars USA (growth by 2.1 times).
Based on two quarters of 2022, 3138 organized FDI data. At the same time, only 30 of them received investments from 10 million US dollars and 22 – investments in the amount of 5-10 million US dollars. Among the registered organizations in Minsk and the Minsk region, there are 20 companies with an investment of more than 10 million US dollars and 15 companies with an investment of 5-10 million US dollars.
For 6 months in Belarus, the volume of investments in organizations with FDI from USD 10 million amounted to USD 795.1 million, in organizations with FDI USD 5-10 million – USD 137.7 million. USA. In this category, investments in Minsk and the Minsk region amount to 520.3 million US dollars and 91.6 million US dollars, respectively.
FDI from different countries
Belarus received the maximum volume of FDI on a net basis from the application. For 6 months of 2022, the amount of FDI from the EU debt is 800.4 million US dollars, which is 55.2% more than for the return period of 2021. The main part of the increase in FDI from the EU in the near future is the Netherlands. Investments from this country increased by 6.1 times – up to 242.4 million US dollars.
The first place in terms of FDI is occupied by Cyprus – 309.5 million US dollars (+ 11.2% by 2021). There are many companies in Cyprus that are beneficiaries of assets in Belarus. For example, in the list from the Resolution of the Council of Ministers dated July 1, 2022 No. 436 “On the list of persons”, 24 positions are companies (shareholders) registered in Cyprus.
Among the rest of the EU countries High amounts of FDI on an exclusive basis came from Germany (USD 56.1 million, +10.3%), Austria (USD 39.2 million, 2.5 times increase), Poland (26.5 million USD). , an increase of 2.1 times), Bulgaria (USD 23.2 million, + 86.1%), Lithuania (USD 20.2 million, -44.5%), Estonia (USD 19.1 million, an increase of 3.4 times), Finland (13.6 million US dollars, + 86.4%), Sweden (11.6 million US dollars, an increase of 2.4).
FDI inflow from the CIS region for the half year amounted to 404.9 million US dollars (+42.1% by 2021). At the same time, the Belarusian economy received 392 million US dollars (+40.7%) from the countries of the Eurasian Economic Union (EAEU). The difference in import amounts between the CIS and the EAEU is mainly with Ukraine ($8.9 million, -4.3%).
Almost the entire volume of investments from the CIS and the EAEU came from the territory of Russia – 387.8 million US dollars (+40.7%). Almost the entire increase in investment from these regions. In addition to Russia and Ukraine, FDI based on exceeding the $1 million mark from several other CIS countries: Azerbaijan ($1.2 million), Armenia ($3.9 million) and Uzbekistan ($2.3 million).
United Arab Emirates (USD 40.0 million, 4.5 times increase), China (USD 15.6 million, -35.1%), Turkey (BYR 12.2 million, 14 times increase) 4 times), Singapore ($11.4 million, there was an outflow of investments in 2021), Israel ($8.0 million, -15.6%).
In the Western world outside the EU, High FDI came from invitations ($50.9 million, +75.1%), United States of America ($26.4 million, +32.0%), United Kingdom ($14.7 million, +43.8%).
Some amounts of investment came with the arrival, which are taken to offshore. So, for 6 months of 2022, Guernsey received FDI in the amount of 13.8 million US dollars, from the British Virgin Islands – 0.7 million US dollars, from the Seychelles – 0.5 million US dollars, from Bermuda – 0, USD 3 million, from the Marshall Islands – USD 0.3 million. , from Jersey – 0.1 million US dollars, from Panama – 0.1 million US dollars.