A strategic plan for the East Belarus mechanical engineering cluster

Abstract

In recent years the economy of Belarus has contracted due to a sharp reduction in exports to Russia and falling domestic demand. Significant foreign currency debt repayments are due and there is a pressing need to secure inward investment and generate growth. Despite being a predominantly planned economy, Belarus has demonstrated a policy commitment to improving its competitiveness. Furthermore, the removal of EU sanctions in 2015 has created an opportunity to extend these reforms with a coherent cluster plan. In particular, this paper identifies the East Belarus mechanical engineering industry as being an ideal focal point and the following recommendations are made: 1) move into higher value production by bridging with automation in manufacturing and self-driving vehicles; 2) create a university partnership for management training and RD 3) use public private partnerships (PPP) to improve infrastructure, building on the work with the EBRD to invest in the M10 motorway; 4) adopt tax breaks to incentivise innovation and competitive excellence; 5) extend the high technology park to the East Belarus industrial core.