1.Meetings

*Public Sector Crisis Management*

ing countries over the long term [26] .

revenue by boosting them domestically.

2.Diversification of foreign markets

them. Developing countries often point to examples where developed countries employed import substitution (the US, Germany, and Japan in the nineteenth and twentieth centuries) to, in their opinion, distance themselves from develop-

Opponents of import substitution bring up the difficulty of deciding which prioritized industries should be protected [27]. Often the obvious choice for the government is looked at askance by private businesses that have invested elsewhere. At that point, the industry is prioritized by the administration and a temporary import substitution policy becomes permanent. Inflation is also a result of import substitution, as prices for both imported (thanks to new protective measures) and domestic goods rise. When that happens, national manufacturers often lower the prices they charge in foreign markets and compensate for the lost

The focus Belarusian exports have fixed in the last few years on Russia and Ukraine has less to do with left-over post-Soviet relationships and more to do with their lack of competitiveness and lagging technological development. Belarus' concentration on its largest export Russian market has grown in recent years: from 37% of total exports in 2011 to 39% in 2015, and to 43% in 2019. Import is even more concentrated on Russia. During last decade, import from Russia to Belarus stayed more or less at the same level: 64% of total imports in 2011, 62% in 2015, and 62% in 2019. The problems Russia and Ukraine experienced in 2014–2015 have limited Belarus' export options. That would logically encourage a switch to other markets, but there Belarusian exports are less competitive. The situation is exacerbated by the lack of innovation in Belarusian exports. For example, the country's exporters (the Minsk Automobile Plant and the Minsk Tractor Works) do not have research centers abroad they can lean on for market analysis and forecasts, to learn about customer needs, and to tweak technology and manufacturing. Competitors like John Deer and MAN have R&D centers in Germany (100 employees), France (120 employees), China, India, and the US. A systemic solution to the problem would be to move from a resource-based economic model to an investment-based model by attracting foreign direct investment, and from there creating a domestic culture of innovation.

The "conflict neighbor trap" often centers on the medium term with a likelihood of repeat occurrences in the long term, given that long periods of poor economic growth can lead to social unrest. The best way out of this trap for Belarus is to attract foreign direct investments in export companies focusing on highly competi-

This trap means that due to the state capitalism management system in Belarus, government and control agencies are deeply involved in business activities of business enterprises. Year by year, this administrative burden becomes forceful pressure on business and the barrier for economic growth. Being the part of the system, control agencies cannot stop the pressure by themselves. So they bring economy to almost complete stop as the enterprises try to avoid making mistakes in following norms and legislature and being punished. The state forceful pressure takes the forms of meetings, inspections, and court cases

**76**

against business.

tive and high-tech markets.

**3.6 "The forceful pressure trap"**

A survey of 800 directors of Belarusian firms run in 2013 by the Economy Research Institute of the Ministry of Economy found that 71% of those surveyed spend at least 20% of each week (one working day) on meetings with state agencies, the main topic of which, 91% say, is discussing their revenues, profits, and other indicators. With that in mind, private firms more and more prefer to avoid contact with the government in an effort to avoid that administrative pressure.
