The objective of investment attraction is the key one in the task list necessary for the development of the economy. To solve it as efficiently and quickly as possible, the National Agency of Investment and Privatization was established in Belarus. What has been recently done and what are the goals for 2018? Acting Director of NAIP Denis Meleshkin answered these and other questions.

- Mr Meleshkin, how would you describe the past year in terms of investments in the Belarus' economy?

- Positive trends were observed both in the economy as a whole and in investment activity. The last year result on investments in fixed assets as follows, the growth rate was 105.3%. And it should be noted that investments have changed structurally: investments in equipment, machinery and vehicles have grown at a higher rate (119.5%). This suggests that the organizations have invested not in the walls, but in the active part of the fixed assets, which take a direct part in the production of goods, work or services. In 2017, foreign investors invested in the economy of Belarus $ 9.7 billion, which is 113.7% compared to the previous year. At the same time, direct investments amounted to Br7.63 billion for the year 2017, and a growth rate was of 110.3%. Foreign investors create new production, expand existing ones. Today such major projects as the creation of woodworking production in Smorgoni by Kronospan FLLC, the construction of the production and logistics complex in Smorgoni by LLC Belagrosterminal, the creation of an industrial production of medicines by Novalok LLC are being implemented in Belarus. In addition, the Chinese corporation DRex Food Group Co., Ltd. plans to build several dairy farms in Vitebsk region, the German company Polipol Holding GmbH plans to invest in furniture production in Brest region. And there are many such examples. We hope that the positive trends observed in 2017 will remain and develop in the current period. There are all prerequisites for it.

- What are the key results of the work of NAIP in 2017?

- Speaking about the results, we will proceed from the basic statutory goals of the Agency. One of them is the formation of a positive image of the country. In my opinion, NAIP managed to cope with this task. The following large investment forums are well known – ‘Belarus. Invest in tomorrow in Luxembourg’, Belarusian Investment Forum in Minsk, the investment forum in Singapore. The event in Luxembourg aroused great interest among representatives of the European business. It gathered more than 200 participants, the Belarusian delegation was headed by Prime Minister Andrei Kobyakov. Entrepreneurs from all over Europe specially came to find out about Belarus first hand, to get answers to questions, make contacts. One can say unequivocally that the forum contributed to the increase of the recognition of Belarus. An equally important event was the Belarusian Investment Forum in Minsk. The areas in which the country expects the flow of investment, primarily foreign, were widely represented. Not only European, but also Asian investors were present.
 

- How did the Agency work in attracting and supporting foreign investors?

- In this regard, there are also positive trends: last year we were approached by a third more foreign companies than in 2016. It is especially important that at the end of 2017 we made a firm basis for the work of the Agency as a project office. It is about assigning employees for each investor, as well as accompanying him or her at all stages - from getting acquainted with the country and its legislation to the full implementation of the project.

- Another direction of the Agency's work is privatization.

- Last year NAIP continued work on the project with the World Bank on the privatization of eight Belarusian enterprises. Certain results were achieved with MMW, there was an interest of individual investors. The work was conducted with varying degrees of success. While the project is not closed, this year we continue. In addition, we have selected and the government approved 4 new enterprises to search for strategic investors: in the petrochemical industry - OJSC Krion and OJSC Lakokraska, in the light industry - OJSC 8 March and JSC Lenta. We plan to involve experienced international consultants. The enterprises will have a unique opportunity to use the services of international high-level experts to increase their attractiveness without financial expenses for their part and the budget. It should also be said that the Agency offered various methods of attracting strategic investors in addition to the "standard" privatization. We are talking about an additional share issue of enterprises, the creation of a joint venture and other options that will not limit investors in choosing investment opportunities.

- At one time, the Public-Private Partnership Center was included in the structure of NAIP? What projects are currently underway?

- The decision to include the PPP Center in the Agency is one of the stages of building a common system for attracting investments to the country. Last year, we made strong progress on the M10 motorway reconstruction project.

In addition, we were actively engaged in projects for the construction of kindergartens in Minsk region, an oncology treatment center in Grodno. In the near future we are counting on holding a meeting of the Interdepartmental Infrastructural Coordination Council, after which we will move towards finding private partners. Plus, we are engaged in the improvement of legislation. Employees of the center take an active part in the development of the regulatory legal framework of PPP. For example, they participate in the preparation of documents necessary for the implementation of the M10 motorway reconstruction project.

Also, practice has shown that the law "On public-private partnership" and Decree of the Council of Ministers No.532 "On measures for the implementation of the Law of the Republic of Belarus of December 30, 2015" On public-private partnership "require its updating. All work on the activation of the PPP institution is a collective activity in which we interact with the state bodies of Belarus, as well as a number of international organizations: the EBRD, IFC, World Bank, UNECE, Eurasian Economic Commission and others.

- From the results to the tasks. How in 2018 do you plan to act in the part of forming a positive image of Belarus abroad?

- The first international forum, which we plan to hold this year, will be in Japan. It will be a joint project with the Embassy of Belarus in Japan, the Belarusian Chamber of Commerce and Industry, Mogilev Regional Executive Committee. The approximate dates of the meeting are May 10-11. We are talking about two cities: the investment part will be held in Tokyo, regional and commercial - in Osaka. It is very important for us to represent Belarus in Japan, because the investment cooperation between the two countries is not sufficient so far.

Also in autumn we plan to hold an exhibition forum in China. But we must not forget about the European direction. Now we are working on the possibility of organizing a mini-forum in Spain. We actively cooperate with the Belarusian embassy, ​​we are determined with the format.
 

- By what principle do you choose countries for investment forums? Do we ride off in all directions, from year to year carrying out activities in different countries? Perhaps it would be worth focusing on one or two directions?

- My opinion is that at this stage it is necessary to form a positive image of the country abroad as widely as possible. Therefore, we are on the way to organizing investment forums in different countries and regions: today it is Luxembourg, yesterday it was Singapore, the day before yesterday -Turkey, etc. In general, if it was possible, the forums would be held at least every day. However, there are certain restrictions, including financial ones, nevertheless much is being done at the expense of the budget.

- Will the Belarusian Investment Forum be held in Minsk this year?

- As for the forum in Minsk, with a high probability this year we will not conduct it. Although initially this event was planned, because the concept of holding implies regularity. Another question is that the BIF in 2017 did not show the results we expected. In fact, the event in many respects echoed the forum held in 2016. Therefore, this year we want to take a pause to think about the format. Perhaps, we will focus on a lively discussion, for example, on the strategy for attracting foreign direct investment in Belarus.

- What is it about?

- It is a country strategy to attract foreign direct investment until 2030. This should be a strategic document, a kind of roadmap. The task is to determine in which direction Belarus should move in the matter of attracting investments. But it will not be purely scientific work - there will be specific actions, their executors and precise terms.

The international experts will help to develop the strategy, but the whole country will be included in the work, NAIP will act as coordinator together with the Ministry of Economy. We expect that in the third quarter of this year the project will be finished.

- What other tasks do you set for the NAIP team for 2018?

- Particular attention should be given to moving to work in the project office format. I say a lot about this, because I see the key role of this format in attracting specific investors.

The project office principle is to fully support the investor from the moment of his or her first visit to Belarus and up to the conclusion of the investment agreement and the implementation of the project. Work in this format has begun, we are already fixing a specific employee for a particular investor, project. And they establish a close relationship, provide comprehensive support.

- Are you looking for investors or working with those who come?

- We have two main sources. The first was and remains - those who came. To say that large investors come to the Agency would be wrong.

Nevertheless, there are investors who later create legal entities, implement projects. The second source is investors who come to us through our interaction with government bodies. Now we are completely involved in it: we phoned, visited all state agencies at the level of deputy heads, asked them to give investment projects - both new ones and those on which work is already under way, so that we are connected to work, solve certain issues and generally accompany their implementation.

Today we need to gain credibility, show that we are useful. Especially in terms of investor relations.

-How else can the effectiveness of the agency be improved?

- The answer is simple: first of all, it is necessary to work hard daily. Today we have statutory objectives: project support, promotion of the country's image, coordination of PPP and others. Every employee, including the director, must work closely to implement them. All conditions are created for it.

We see an additional improvement of operational efficiency of the Agency in changing its status by subordination to the government. This is stipulated by the draft decree on improving the activities of NAIP, which has already been submitted to the Presidential Administration. We believe that this will also allow strengthening the coordination of the work of state bodies in attracting foreign investment, and will increase the efficiency of taking measures.

The task is also to revive the work of the Advisory Council on Foreign Investments. This is a good platform for communication between foreign businesses and government agencies. At present, it is not in full demand.

- One of the initiatives of NAIP of the past years is the creation of the institution of the investment ombudsman. At what stage is the project?

- I would say that this project is being implemented. In conditions of optimization of state structures, the creation of an additional institution is not seen as expedient. In many respects already now the Agency carries out functions of the ombudsman on controversial issues related to the implementation of investment projects. Foreign investors are calling us today for help in resolving various issues.

I believe that this work will be strengthened in the event that a package of documents is adopted to improve the activities of NAIP. Among other things, they will also identify the functional of the Agency for participation in the pre-trial and judicial settlement of disputes. At the same time, the main task is to avoid controversial situations. Our work will be directed to this, among other things.

- Regarding legislation - in which areas do you see further work?

-Much has been done in terms of improving legislation in recent years. This is confirmed by the position of the Republic of Belarus in the rating of Doing Business - 38th place.

We can recall the documents adopted only in 2017. Decree No. 7 "On the Development of Entrepreneurship" provides for a radical change in the mechanisms of interaction between business and government, minimizes government interference in the work of organizations and vice versa, strengthens the mechanisms for self-regulation of business. Also, Decree No. 8 "On the development of the digital economy", which introduces revolutionary changes: the special tax-legal regime of the HTP is prolonged until 2049, the list of activities for residents is significantly expanded, the conditions for the development of the IT business product model are simplified, rights, restrictions on attracting high-quality foreign specialists to the HTP are lifted, new opportunities for training are created, and unprecedented conditions for regulating the turnover of digital currencies and tokens. In addition, the preferential regime of Great Stone Industrial Park has been improved. And this is not a complete list.

A number of documents are currently under construction. Thus, changes are planned in the Law on Investments regarding the possibility of introducing a mechanism for insurance of investment risks and the use of other modern instruments of investment activity, providing investors with stability guarantees when changing legislation, including inviolability of property rights, in the laws "On business associations" and "On privatization of state property and transformation of state unitary enterprises into open joint-stock companies ".

The institute of investment contracts is being improved. We are talking about finalizing Decree No. 10 "On creating additional conditions for investment in the Republic of Belarus." Amendments will be made to the law "On public-private partnership". The changes are supposed to be extended to the IT industry in the field of application of PPP mechanisms, to improve the procedure for concluding a PPP agreement, and to extend guarantees for a private partner provided by the state. There are many initiatives, but the basic legislative base has already been formed. For me the main task is not constant improvement, but qualitative execution of the current normative legal acts.

Source: BelTa