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Concern over failure of Russian companies to reinvest profits in Belarus

Economy 18.07.2019 | 13:09

ST PETERSBURG, 18 July (BelTA) – Russian companies withdraw considerable amounts of profit from Belarus instead of reinvesting. Chairman of the Council of the Republic of the National Assembly of Belarus Mikhail Myasnikovich drew attention to the problem at the plenary session of the 6th Forum of Regions of Belarus and Russia, BelTA has learned.

Belarus offers comfortable business conditions to Russian companies – both those residing in the country and those that work via manufacturing cooperation schemes. “But we are concerned that companies with Russian capital, which are residents of Belarus, withdraw considerable amounts of the profits they earn from Belarus instead of reinvesting most of it,” Mikhail Myasnikovich said.

In 2018 direct investors withdrew 50% of the profit. The figure went all the way to 75% in Q1 2019. “It does not actually violate Belarusian legislation and international laws but we would like Russian partners not to focus on extracting assets from Belarus so much. We would like them to reinvest profits instead,” he added.

The head of the upper chamber of the Belarusian parliament debunked the popular opinion that Belarus buys only raw materials from Russia and sells ready-made products on the Russian market. Mikhail Myasnikovich noted that Russia is Belarus' top supplier of highly liquid high-quality products such as investment goods: machines, equipment, and vehicles. Russia is way ahead of other countries. Mikhail Myasnikovich quoted some statistics. In 2018 Belarus imported over $1.1 billion worth of investment goods from Russia, 15% up from 2017. The trend continued into 2019. Belarus buys over 80% of the radio equipment and refrigerators and over 90% of TV sets and washing machines from Russia. In 2018 Belarus imported over $1 billion worth of Russian cars, 1.6 times up from 2017.

“There are no restrictions on selling Russian products in Belarus although we have our own matching products,” Mikhail Myasnikovich stressed. He said he hoped that restrictions on Belarusian products on the Russian market would be removed as well.

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