The Belarusian Model of Economic Transition and Industrialization

Abstract

This article discusses the economic development of Belarus, which took the gradualist approach in transition. Rejecting the Washington Consensus—based reform, Belarus experienced a quick recovery during the 1990s and rapid economic growth during the early to mid-2000s. The government took various policy measures to ensure the structure of a centrally planned economy. These measures included price control, emphasis on the large state-owned enterprises, restrictions on foreign direct investment (FDI) inflows, and tariff protection. Facing limits to economic growth since the late 2000s, the government has undertaken liberalization measures including price decontrol, promotion of small and medium-sized enterprises, derestriction of FDI inflows, and trade liberalization. In the meantime, realizing the role of industrialization, it placed an emphasis on development of the manufacturing sector by lowering tariff rates imposed on capital goods. Finally, the article provides policy implications for the other developing and transition economies pursuing economic development in light of the experience of Belarus.