The Impact of WTO Accession and Complementary Structural Reforms on the Economy of Belarus: A Quantitative Evaluation

We develop a modern and innovative general-equilibrium simulation model of the economy of Belarus to undertake an assessment of WTO accession and key complementary reforms. Our results indicate that WTO accession is expected to increase the welfare of Belarusian nationals by 8.2% (of consumption). Thereby, a reduction of barriers against suppliers of services is the most important contributor to these benefits, especially a 25% reduction in the non-discriminatory barriers, which adversely impact both Belarusian and foreign service providers, generates a welfare gain of 5.5%. A more aggressive reduction of these barriers (50%) could have an even more substantial impact according to the estimated gain of 11.7%. Simulating partial privatization based on data for the relative productivity of various sectors in Belarus, we find that it would lead to a large increase in the productivity, competitiveness and output of the economy of Belarus, yielding gains of 36.2%. By increasing the productivity and competitiveness of Belarusian firms, the complementary structural reforms would lead to a reduction of imports, contrary to WTO accession. We hope that by identifying these complementary reforms to WTO accession, we may be able to assist the Government in its efforts to use the WTO accession process as a vehicle to make the economy more competitive.