The Republic of Belarus, having become a sovereign state, has preserved the role of one of leading economic countries of the former SU. The economic drop of 1992-1995 was replaced by a growth of production and establishment of political stability on the basis of correct choice of the development strategy and rejection of inconsistent reforms. When the transformation processes began, the traditionally high openness of the Belarusian economy predetermined the adoption of a strategy of multi-vector orientation of the foreign economic policy. Striving to integration within the CIS, Belarus at the same makes a wide use of opportunities of international division of labour and makes efforts to organise an effective co-operation with the West.

Belarus inherited from the USSR an unfavourable sectoral structure of industry and specialisation of other economic sectors subordinated to the goals of predominantly meeting the needs of the former single national economic complex of the country. Belarus exported more than 80% of trucks, 3/4 of tractors manufactured in the Republic, over 90% of fodder harvesters, about 90% of scrapers and excavating machines, and 73% of metal-cutting machines. In 1990, Belarusian potassium fertilisers constituted 56%, tractors 52.5% and refrigerators 33.6% of the total USSR export. Today, too, the effectiveness and competitiveness of the Belarusian economy are determined, to the known extent, by a high share of manufacture of production means. These products are mostly have the greatest demand and are competitive on markets of developing countries. At the same time, during the period of transition the country sees global structural transformations in the economy that facilitate the expansion of economic cooperation of Belarus with the outside world. As a result of an active economic policy of the State the deep drop of production of 1992-1994 was overcome; in 1995, stabilisation was achieved and a certain growth in separate branches of the economy was attained. The year 1996 became the year of radical change. The absolute drop was replaced by a growth of the gross domestic product (GDP): in 1996 it constituted 2.8% against 1995; in 1997 it went up to 11.4% as compared to 1996. A high increment of the GDP was attained in 1998 making 8.3% as compared to 1997. The speed of growth of the GDP and of the industrial output in 1996-1997 was significantly higher than in the neighbouring CIS countries, Poland and the Baltic States. Measures of state regulation of complex processes in all spheres of country's life after the disintegration of the USSR made it possible to overcome the production drop and achieve the path of economic growth.

As compared to the neighbouring states (except for Poland), Belarus had, in the period of transformations, much slower rates of GDP drop, and in 1997 its rate per capita as regards buying capacity was substantially higher. At the same time the negative current account balance of the country remained relatively moderate.

A substantial factor for economic development was an intensive resumption of disturbed inter-sectoral relations and the country's orientation towards foreign markets. The proof of competitiveness of the developing industrial potential of the country is the role of its leading sectors (machine building, metalworking, chemical and petrochemical industry, electricity generation, light and food, forestry and woodworking industries) in the world and European production.

Belarus is a large exporter of trucks, tractors, TV sets, refrigerators, chemical fibres and threads, potassium fertilisers, products of textile and light industries. Policy of economic relations conducted by the leadership of the country increases the role of Belarus in the international division of labour in the post-Soviet space. The volume of export per capita exceeds the respective indicators of many CIS countries.

Of special importance for Belarus saturated with large industrial enterprises built in 1950-1970 is the renovation of the outdated production equipment. The situation in the large industrial sectors influences the position of processing industry, agriculture, maintenance of the output of products in all economic sectors at the modern technological levels, and opportunities for development of the social spheres.

Today large industrial enterprises constitute the basis of the Belarusian economy. They employ almost half of the working population of the country. Due to the preserved potential of production facilities these enterprises have special interests in winning new external markets. The State provided them with a felt support for stimulating export as one of the priority directions of socio-economic development of the country. The scale of foreign trade of Belarus determines, to a significant degree, the economic safety of the country.

The foreign trade turnover of Belarus over 1997-1998 constituted 119% of the GDP whereas as regards the world community countries on the whole the volume of foreign trade turnover was on the average comparable with 38-39% of the world gross product. In the Russian Federation this indicator in 1998 was just over 40%. In 1997 the share of Belarusian export in the GDP constituted 54.2%. In 1998 it was 55.0% while the share of the import in the GDP was preserved at the level of 64.7%.

The volume of foreign trade of Belarus with the CIS country is maintained at the level of about 70% of the total volume of foreign trade turnover. Export supplies of products are oriented, mostly, towards Russia and Ukraine (92% of the total export to the CIS countries in 1995 and almost 97% in 1998).

With generally positive tendencies in the process of reformation of the national economy Belarus has encountered great difficulties. The year 1998 was extremely difficult. The country's economy felt the entire burden of the Russian crisis. In the second half of 1998 the rates of economic growth slowed down. This was manifested in a sharp jump of infla-tion. The situation in the financial system aggravated, which caused a substantial devaluation of the Belarusian rouble and was reflected in worsened indicators of trade balance and competitiveness of domestic products.

The Government of the country took preventive measures in the sphere of price formation and management of monetary and other spheres, which prevented the process of possible reduction of production output, first of all in industry. Orders and volumes of production remained rather stable.

High rates of outlined projected tasks for the most important macroeconomic indicators were preserved despite all the unfavourable conditions set in 1998. The output of industrial products went up by 12%, that of consumer goods by 20.8%, investments into the main capital increased by 16.2% and the trade turnover by 26%. Real monetary incomes of population went up by 19%. Despite financial problems that took place in the country the foreign debt of the country did not go up and the state budget was executed with a deficit that was sufficiently lower as compared to the planned level. Over the last 3 years (1996-1998) the GDP in real terms was increased almost by a quarter, the gross production of products and services in national economic sectors by 25.4% and the main capital accumulation by 33.5%. Real monetary incomes of population over these years went up by 47.6%. Intensification of the process of integration with Russia has a positive effect on a further effectiveness and technological flexibility of the Belarusian economy, which makes Belarus quite compatible with the European economy against the background of the parallel process of European integration.

Thus, Belarus was able to successfully overcome negative tendencies over the last years in the absence of a significant foreign investment and to resume the growth of production output, also preserving social stability in society. However, a number of complex problems are still to be resolved.

Given account of the real economic situation and foreign factors, a concept of moderate rates of economic transformations and assuring of development within the frameworks of the available resources accompanied by a reorientation of part of resources for social needs was adopted in the Republic. Among levers of state regulation and management of economic processes, it is necessary to name the step-by-step economically grounded privatisation, a moderately rigid monetary policy, the reduction of tax burden on enterprises, maintenance of a moderate deficit of the budget, measures aimed at correction of price misbalance including those due to limitation of cross subsidies. Parallel measures aimed at increasing incomes of population and compensation payments for low-income families are implemented.

Today, Belarus faces acute problems related to the reduction of terms of use of equipment and machinery and of updating of production for the purpose of increasing competitiveness of products to the level of world standards making it possible to reorientate export supplies of Belarusian commodities to Western markets. Therefore the economy of Belarus as well as economies of other CIS countries needs investments. Involvement of foreign investors will be facilitated by acceleration of weighted economic reforms, first of all at the expense of further elaboration of its legal basis, institutional and structural transformations, measures of state protection of domestic and foreign investors.

Investment attractiveness of Belarus is determined today not only by such quantitative indicators as dynamics and levels of GDP, labour productivity or capital investments but also by a number of qualitative parameters. This includes mobility of labour resources, transit orientation of the transport infrastructure, the technological level of enterprises, readiness of the production facility leaders for innovations, regulation of environmental protection, stability of society and of economy, governmental support, consistent actions of financial institutions, a relatively low level of consumer prices, basically predictable dynamics of the national currency, efficacy of the administrative system and the devel-opment of the educational system. Despite the fact that as regards the level of the aggregate labour remuneration per hour (0.2 dollars per hour on the average) Belarus is far behind European states, the country has preserved a high quality of labour force, the State assures preservation of the system of training and refreshment training of workers and highly skilled specialists as required for today.