International rankings are the second important source after mass media which investors use to learn about business climate in a foreign country. Today Belarus is represented only in the ratings with free participation.

Although the government’s plans to raise foreign financing were fulfilled, the results of 2017 were ambiguous in this respect. The private sector and, especially, hi-tech startups generated investors’ profound interest. Investments in the public sector were provided by the state through external borrowing and redistribution of funds raised this way. The public sector thus remains unattractive for investors, but, in fact, it seeks state subsides, rather than investments. In 2017, the government took a number of important steps to improve the regulatory framework for investment and to stimulate business ventures.

Foreign Investment: Startups and Innovations or Loans

In 2016, potential investors’ interest in Belarus continued to decline. The problem of access to financing in the form of loans was growing, affecting the possibility of floating sovereign Eurobonds internationally. There were signs that the government finally realized that the country needed a better image to foster investment and issued a number of bills to facilitate raising funds.

Foreign Investment: Measures to Improve the Investment Climate

We examine the empirical relationship between the quality of corporate governance practices and economic development in an unbalanced panel of 185 countries covering 2010 through 2015. We find that corporate governance is positively associated with the FDI inflow and market capitalization, and negatively associated with the public sector employment in low-income countries. Our results also suggest that corporate governance is negatively correlated with corruption in the high-income countries. Finally, we establish the unidirectional causality running from corporate governance to economic development, and find no evidence of causal effect of economic development on corporate governance. Therefore, our results suggest that the policy makers should in the first place address the institutional transition of the countries including the implementation of best corporate governance practices to accelerate economic development in developing economies.

Tendencies of 2015 have nothing different from previous years. Low demand for state assets and the lack of flexibility and interest in speeding up of privatization continue to be the major factors of zero dynamics in the realization of state assets. External borrowing remains the major source of investment inflow which is used for refinancing of current debts and, as a result, only increases total debt and does not lead to reforming and the growth of efficiency in the economy.

The uncontrolled inflow of foreign investment in the country can have both positive and negative effects. In this regard, national governments develop and implement measures to attract foreign capital, taking into account the characteristics and interests of a particular state. With a view to better understanding the logic of the FDIs movement, the paper gives a brief description of the FDIs dynamics in the Republic of Belarus, as well as the study of the international experience based on the analysis of the FDIs attraction policies of the Visegrad Group countries (Hungary, Czech Republic, Poland) and Georgia.