What are the key challenges in construction policy for Belarus today to spur the export of construction services from Belarus?
Some 5 years ago, export revenue from construction services export was higher than in IT. Barriers to development in non-IT service sectors, both internal and external, have led to significant migration volumes of the labor force and also to the transfer abroad of the businesses themselves.
Construction services is the third biggest service export line for Belarus today. It is ideally structured with half exported to EuraAsian Economic Union, and half to the rest of the world.
Under different scenarios, we have calculated the export growth potential. For optimistic scenario, having growth rate of export of construction services at the same pace as the general economy and assuming the government’s goal to reach USD 100 billion economy by 2025, we imply an average annual increase of 8.9%. At this rate it would have been possible to reach USD 565 million of export of construction services by 2025.
The second scenario, which we call highly optimistic, assumes construction export growth at an average annual rate of 10.7%. It is this increase that the sector showed in the period from 2012 to 2017. The implementation of this scenario will bring USD 625 million in revenues in 2025.
What transport policy changes are needed to achieve the above? In short, those are:
1. To pursue a pro-active export promotion policy in priority geographic areas (co-financing of hospitality expenses, export grants, etc.)
2. To increase the efforts of the government, foreign affairs agencies and diplomatic missions to achieve equal business conditions for all companies within the EurAsian Economic Union, and to eliminate discrimination against Belarusian companies in EAEU member countries
3. To enhance usage of export loans and export bank guarantees for the sector
4. To run a feasibility study of providing tax and customs preferences to architectural companies close to those that IT Park has today (or incorporating architectural companies into the list of residents of the IT Park)
|5. To carry out an education and training reform for architecture specialists: first of all, to audit and revise curricula in universities; to put more attention to the development of soft skills of students; to run more international exchange programs for students and teachers; to support and encourage student initiatives in the sector.|
The policy paper is prepared under financial support of the British Embassy in Minsk.