2014 Index of Economic Freedom

Belarus

overall score50.1
world rank150
Rule of Law

Property Rights20.0

Freedom From Corruption24.6

Limited Government

Government Spending61.2

Fiscal Freedom89.2

Regulatory Efficiency

Business Freedom73.4

Labor Freedom77.7

Monetary Freedom33.9

Open Markets

Trade Freedom81.4

Investment Freedom30.0

Financial Freedom10.0

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Quick Facts
  • Population:
    • 9.4 million
  • GDP (PPP):
    • $146.7 billion
    • 1.5% growth
    • 5.0% 5-year compound annual growth
    • $15,634 per capita
  • Unemployment:
    • 0.6%
  • Inflation (CPI):
    • 59.2%
  • FDI Inflow:
    • $1.4 billion
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Belarus’s economic freedom score is 50.1, making its economy the 150th freest in the 2014 Index. Its overall score is 2.1 points better than last year, mainly due to notable improvements in investment freedom and government spending. Belarus is ranked 42nd among the 43 countries in the Europe region.

Over the 20-year history of the Index, Belarus has improved its economic freedom score by 9.7 points, driven by gains in seven of the 10 economic freedoms including fiscal freedom, monetary freedom, and trade freedom. Offsetting much of the overall score gain, three other critical areas of economic freedom—property rights, investment freedom, and financial freedom—have recorded losses of 20 points or more over the same period.

In the 2014 Index, Belarus has moved up from the economic freedom status of “repressed” for the first time. Nonetheless, pervasive state controls persist in many areas of the economy, and widespread state investment and redistribution activities have stifled progress in the development of a modern diversified economy.

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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 sanctions following beatings and arrests of opposition figures after Lukashenko falsified the December 2010 election results. Belarus’s industry and state-controlled agriculture are not competitive. Russia maintains huge political influence in the government and economy. A significant portion of Russian oil and gas exports passes through the country. Efforts to promote greater economic union with Russia and Kazakhstan through a customs union and the projected Eurasian Union continue. Ties with Iran, Venezuela, and China are strengthening.

Rule of LawView Methodology

Property Rights 20.0 Create a Graph using this measurement

Freedom From Corruption 24.6 Create a Graph using this measurement

Since his election 20 years ago as the first (and to date the only) president of Belarus, Alexander Lukashenko has consolidated authoritarian power, destroying checks and balances and dominating all branches of government. Corruption is pervasive in both the private and public sectors, from the executive and judiciary to the police. Soviet-era state ownership of land and government-controlled collective farms continues.

Limited GovernmentView Methodology

The top individual income tax rate is a flat 12 percent, and the top corporate tax rate is 18 percent. Other taxes include a value-added tax (VAT) and excise taxes. Overall tax revenue has fallen to 24.7 percent of GDP. Government spending is 36 percent of total domestic output, and public debt remains below 40 percent of GDP. A shakeup in the potash market could be a major threat to government finances.

Regulatory EfficiencyView Methodology

Starting a business takes five procedures, and no minimum capital is required. However, completing licensing requirements still takes over 100 days. The labor market remains stagnant. A large portion of the workforce is in the informal sector. The government 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 1.8 percent average tariff rate, but importers may face long delays. New foreign investment is screened by the government. In general, investment and financial activity are severely limited by state interference and controls. Development of the financial sector has progressed slowly. Large state banks continue to dominate the banking system.

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

Regional Ranking

rank country overall change
1Switzerland81.60.6
2Ireland76.20.5
3Denmark76.10.0
4Estonia75.90.6
5United Kingdom74.90.1
6The Netherlands74.20.7
7Luxembourg74.20.0
8Germany73.40.6
9Finland73.4-0.6
10Sweden73.10.2
11Lithuania730.9
12Georgia72.60.4
13Iceland72.40.3
14Austria72.40.6
15Czech Republic72.21.3
16Norway70.90.4
17Belgium69.90.7
18Armenia68.9-0.5
19Latvia68.72.2
20Macedonia68.60.4
21Cyprus67.6-1.4
22Spain67.2-0.8
23Poland671.0
24Hungary 67-0.3
25Albania66.91.7
26Slovakia66.4-2.3
27Malta66.4-1.1
28Bulgaria65.70.7
29Romania65.50.4
30Turkey64.92.0
31Montenegro63.61.0
32Portugal63.50.4
33France63.5-0.6
34Slovenia62.71.0
35Italy60.90.3
36Croatia60.4-0.9
37Serbia 59.40.8
38Bosnia and Herzegovina58.41.1
39Moldova57.31.8
40Greece55.70.3
41Russia51.90.8
42Belarus50.12.1
43Ukraine49.33.0
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