2015 Index of Economic Freedom

Belarus

overall score49.8
world rank153
Rule of Law

Property Rights20.0

Freedom From Corruption29.0

Limited Government

Government Spending54.7

Fiscal Freedom86.4

Regulatory Efficiency

Business Freedom72.0

Labor Freedom80.1

Monetary Freedom44.5

Open Markets

Trade Freedom81.0

Investment Freedom20.0

Financial Freedom10.0

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Quick Facts
  • Population:
    • 9.5 million
  • GDP (PPP):
    • $149.1 billion
    • 0.9% growth
    • 3.2% 5-year compound annual growth
    • $15,753 per capita
  • Unemployment:
    • 5.9%
  • Inflation (CPI):
    • 18.3%
  • FDI Inflow:
    • $2.2 billion
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Belarus’s economic freedom score is 49.8, making its economy the 153rd freest in the 2015 Index. Its overall score is 0.3 point lower than last year, reflecting declines in half of the 10 economic freedoms including investment freedom, the control of government spending, and fiscal freedom. Belarus is ranked 42nd among the 43 countries in the Europe region.

Despite this year’s decline, Belarus’s economic freedom score has improved by nearly 2 points over the past five years. Marked improvements in overall fiscal management and a decline in perceived corruption have bolstered overall economic freedom. However, the score decline in the 2015 Index has pushed the country back into the “repressed” category.

Belarus remains one of the world’s most controlled economies. The state directs or interferes in many areas of the economy. Proposed labor laws include a so-called serfdom decree that threatens to limit the free movement of agricultural workers. These policies, along with centralized state control and harsh redistribution, have stifled Belarus’s prosperity and economic freedom compared to the rest of Europe.

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Background

President Alexander Lukashenko, in power since 1994, rules all branches of government. The U.N. Human Rights Council has appointed a human rights investigator for Belarus. The European Union imposed targeted economic sanctions following beatings and arrests of opposition figures after Lukashenko falsified the December 2010 election results. Parliamentary elections in 2012 were rigged, and the two main opposition parties boycotted the elections. Belarus’s industries and state-controlled agriculture are not competitive. Corruption and inflation plague the economy. Russia maintains huge political influence in the government and economy, and a significant portion of Russian oil and gas exports passes through the country. In May 2014, Belarus signed an agreement with Russia to create a Eurasian Economic Union.

Rule of LawView Methodology

Property Rights 20.0 Create a Graph using this measurement

Freedom From Corruption 29.0 Create a Graph using this measurement

President Alexander Lukashenko presides over an authoritarian system that has destroyed checks and balances and dominates all branches of government. The state controls 70 percent of the economy, feeding widespread corruption. Graft is also enabled by the lack of transparency and accountability in government. Soviet-era state ownership of land and government-controlled collective farms continues.

Limited GovernmentView Methodology

Belarus’s flat individual income tax rate is 12 percent, and its corporate tax rate is 18 percent. Income earned in technology parks is taxed at a lesser rate. Other taxes include a value-added tax and excise taxes. The overall tax burden equals 29.8 percent of gross domestic income. Government spending has reached 38.9 percent of domestic income, and public debt equals 37 percent of GDP.

Regulatory EfficiencyView Methodology

Simplified registration formalities facilitate business formation, but obtaining necessary permits remains time-consuming and burdensome. A well-functioning labor market has not developed, and the public sector is the main source of employment. The state subsidizes prices for energy and many household goods and fixes artificially low prices for products made by state-owned enterprises.

Open MarketsView Methodology

Belarus has a relatively low 2.0 percent average tariff rate. It is a member of the Eurasian Customs Union and has not joined the World Trade Organization. The government reviews foreign investment. The financial sector, dominated by banking, remains heavily government-influenced, with commercial banks’ lending practices subject to state pressure. The stock market is small and largely dormant.

Country's Score Over Time

Bar Graph of Belarus Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Belarus to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Switzerland80.5-1.1
2Estonia76.80.9
3Ireland76.60.4
4Denmark76.30.2
5United Kingdom75.80.9
6Lithuania74.71.7
7Germany73.80.4
8The Netherlands73.7-0.5
9Finland73.40.0
10Luxembourg73.2-1.0
11Georgia730.4
12Sweden72.7-0.4
13Czech Republic72.50.3
14Iceland72-0.4
15Norway71.80.9
16Austria71.2-1.2
17Latvia69.71.0
18Belgium68.8-1.1
19Poland68.61.6
20Cyprus67.90.3
21Spain67.60.4
22Slovakia67.20.8
23Armenia67.1-1.8
24Macedonia67.1-1.5
25Hungary 66.8-0.2
26Bulgaria66.81.1
27Romania66.61.1
28Malta66.50.1
29Albania65.7-1.2
30Portugal65.31.8
31Montenegro64.71.1
32Turkey63.2-1.7
33France62.5-1.0
34Italy61.70.8
35Croatia61.51.1
36Slovenia60.3-2.4
37Serbia 600.6
38Bosnia and Herzegovina590.6
39Moldova57.50.2
40Greece54-1.7
41Russia52.10.2
42Belarus49.8-0.3
43Ukraine46.9-2.4
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