The welcome couldn't have been warmer, the weather couldn't have been colder. As EBRD President, Suma Chakrabarti, landed in Minsk, the temperature gauge was hitting minus 15. The reception from all of those that the President met on what was an historic visit – the first by an EBRD President in over 20 years and the first under President Lukashenko's rule – was, though, far from frosty. At a factory on the outskirts of Minsk, he was able to see a prime example of what private sector development can deliver for Belarus. Companies play a vital role in the transition to a market economy, especially in a country where private sector activity still accounts for only a quarter of all economic activity. Stadler Minsk is producing trains and trams, primarily for markets in the CIS. Six hundred and fifty staff manufacture 120 carriages a year from a very modern-looking factory. The EBRD signed its first loan to the Swiss firm in 2013 and the project has been highly successful. The company says the quality of production in Minsk is as high as in Switzerland. It is a great example of transition in action. The project started as a joint venture between Stadler and the Minsk Region Executive Committee. In May last year Stadler took sole ownership.
The Bank has a calibrated approach to operations in Belarus which means focusing predominantly on developing the private sector. This has become even more challenging, but even more crucial, as Belarus has been hit hard by the economic downturn in Russia and Ukraine. The Bank forecasts that Belarus's economy is expected to contract by 1.5 per cent in 2015.
During meetings with President Lukashenko, Prime Minister Kobyakov and other ministers, President Chakrabarti stressed the importance of economic reform, especially the need to resume and deepen previously promised structural changes to support private sector development. President Lukashenko thanked the Bank for its engagement in Belarus. Throughout meetings and media interviews the EBRD President's message was clear: Belarus needs to help the Bank to help it. Reform would enable the Bank to engage more broadly. The EBRD President decided to make the first presidential visit to Belarus in such a long time because he wanted to understand better the issues facing the country. The discussions he had will help shape the drawing up of the Bank's new Belarus country strategy. Work on the latter is due to begin later this year.