It has been two months since the UNDP presented its new country report, Belarus: Addressing Imbalances in the Economy and Society. National Human Development Report for 2004 - 2005. While speaking at a presentation ceremony on August 31, Deputy Minister of Economy Tatsyana Starchanka pointed out that the purpose of such reports was to involve a large scientific and public audience into debate for the sake of streamlining the country's socioeconomic policies. Alas, debate still gives its place to monologues by one and the same person at meetings dealing with economic policy. The experts who contributed to the report and its scientific editor - Uladzimir Shymaw, former minister of economy and now rector of an economic university in Minsk - raise topical questions: How can Belarus achieve effective integration into the world economy, which operates under market rules, and what are social costs of the changes that have to be made in that respect? How can Belarus ensure the compliance of its institutions to European standards?
It is already good that the report envisages a European orientation for Belarus. The authors believe that "at present, the depth and scope of the market reforms in Belarus are insufficient, and its economy is significantly behind most other Central and East European nations according to the Foreign Direct Investment Attractiveness Index calculated by UNCTAD. Thus the international competitiveness of the Belarusian economy remains too low."
The report underlines the need for Belarus to join the World Trade Organization, which "creates the challenge of adjusting national economic laws and regulations to WTO rules and demands appropriate concessions to foreign trade partners that would open up domestic markets to foreign goods, services and investments."
These words can be interpreted as a disguised call for conducting systemic reform and abandoning tools of a strong bureaucratic state (which, incidentally, is founded with the intellectual support of some of the report's authors). The integration of Belarus into the European Union means, first of all, larger trade and its diversification. And there are big problems in that respect. Mineral commodities accounted for 64.8 percent of Belarusian export to the EU in 2003. Textiles were 8.7 percent and non-precious metals - 7.6 percent.
Judging by foreign trade statistics for the first half of 2005, one can conclude that the risks of this mono-commodity situation are rising. That European markets have a lot of gasoline from Belarus is of course good for the country's budget, but in general, exporting raw materials is a poor strategy.
While describing European prospects for Belarus, the report's authors suggest that integration with Russia should be deepened at the same time. They even draw a special geometrical construction to make their case: "In the long term, integration within the EU - Belarus - Russia triangle should result in the creation of a common economic area that applies progressive EU standards and facilitates the movement of Belarus and Russia towards a post-industrial economy."
Do the EU and Russia know about this triangle? It is difficult to imagine such a strange common economic area. The goal sounds impressive, but it is indeed strange that EU standards are divided into progressive and, to all appearances, reactionary, and that rather peculiar ways of achieving the goal are offered. In particular, "in the short term, Belarus should start by developing annual action plans to expand trade with the EU. Such plans would compliment the national socio-economic development program for 2006-2010 and help achieve consensus on the objectives of economic reform and its target indicators."
It looks like the national experts who authored the report just did not have courage to openly call for deregulation of trade, privatization and de-bureaucratization. They are so used to hiding behind various government development plans and concepts. But it is impossible to enhance Belarusian competitiveness by writing about its importance.
Nevertheless, the experts display almost civil courage when they cite requirements needed for countries that want to integrate into the EU, including "a stable democracy that guarantees the rule of law, respect for human rights and the protection of ethnic minorities." Since they see Belarus' future in close relations with the EU, they actually offer a political and legal reform for the country.
Together with usual enumeration of Belarusian economic successes, the report's authors also point to a number of problems. Uladzimir Shymaw and his colleagues speak about the necessity of being prepared for competition with foreign companies. And they admit in this respect that "many Belarusian industries have been losing their share of the domestic market."
However, the report does not give any assessment to growing protectionism, generous government support for state companies and discrimination against private businesses. The experts do not say that the government should abolish large-scale price regulation and its excessive presence in the economy. Therefore, the report can be described as too politically correct and expressing criticism in a hidden and sophisticated way.

Belarus: Depreciation of production assets, as of the beginning of 2005, in percent