This note attempts to analyze andtentatively answer these questions by focusing on thedrivers of growth and productivity, labor markets andenterprise restructuring, as well as the state system ofenterprise support, which is key to understanding theinterplay between the state and the economy in Belarus. Theperiod of analysis covers 2004-08 with appropriatereferences to the previous periods and comparisons withRussia and/or other Commonwealth of Independent States (CIS)countries. The final section explores the Belarus'sindustrial performance in the period of the global crisis(late 2008-09) and reviews the government's policiesthat have been largely responsible for a relatively mildeffect of the crisis on economic dynamics in the country.The analysis is based on the official statistics provided tothe team by the National Statistics Committee (Belstat),National Bank, and various ministries, as well as statisticsfrom other national and international statistical sources.In addition, the analysis benefited from the data providedby various enterprise surveys undertaken by the ResearchInstitute by the Ministry of Economy (RIME) and from twosector case studies (in machinery and dairy sub-sectors).Belarus has weathered the crisis so far better than most ofits neighbors, in part due to the government policies toboost domestic demand in a predominantly state-owned andcontrolled economy. This was achieved at a considerablemacroeconomic cost. The country's ability to sustainpossible future shocks declined, and macroeconomic risksincreased. The crisis has further exposed risks associatedwith the Government of Belarus (GOB) practice of heavyreliance on administratively set targets for large andmedium-size enterprises, especially targets for output andaverage wage growth.
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