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. Last Updated: 07/27/2016

McDonald's Blazes Trail Into Unexplored Belarus

The country's leader may have just pulled off a constitutional coup, and its economy may be on the brink of collapse, but McDonald's is betting that nothing will stop the hunger of Belarussians for a good Big Mac.


"Any new country is a risk," said Karen Bishop, director of McDonald's Belarus, which will raise three sets of golden arches in the capital Minsk next week. "But if you want to be the leader, sometimes you have to take those risks."


McDonald's Canada -- the same division that launched the fast-food giant in Russia six years ago -- has invested $5 million in construction of the three restaurants after conducting two years of market research.


"We realized that there is no fast food in Belarus," spokeswoman Olga Troian said from Minsk. "There is no competition. People are already turning up three days before the opening."


McDonald's is one of the few major foreign investors to venture into the Belarussian market, where the post-Soviet collapse has been harsh and President Alexander Lukashenko has moved to nationalize parts of the economy at the same time as ensconcing virtual one-man rule in a controversial referendum last month.


Bishop said McDonald's enjoys a good working relationship with both the presidential and local organs of power, adding that McDonald's Belarus, which is 100 percent foreign-owned, has received no special privileges such as tax breaks.


"We don't enjoy any benefits other than those set out in the law on foreign investment," she said. "But it's quite good in Belarus actually."


Doing business in Belarus is far from risk-free, however. The International Monetary Fund cut off standby credits to Belarus a year ago, and its sister institution, the World Bank, has also suspended new projects.


"One reason was connected with the indecisiveness of the government," said Charles Willoughby, chief of the World Bank mission in Minsk. "The other was due to the lack of progress in economic reforms."


But McDonald's, which has conquered such countries as Russia and China, is not easily put off.


"Our policy is to arrive first in the market and then develop it," Bishop said. "In the long term, this policy has paid off for us."


Belarus will be the 100th country in which the fast-food chain has opened restaurants, and it plans rapid expansion: four new outlets next year and a total of 25 by the end of the century, with overall investment reaching $25 million. The first three restaurants will employ 700 local staff, with Bishop the only expatriate on the team.


The Belarus restaurants will import all their products from the McDonald's farm near Moscow under a Russia-Belarus trade agreement, while it considers building a local plant, Troian said.


The 100th-country milestone will be marked by a 24 hour celebration including fireworks, a marching band and a party for 100 children who will wave the flags of the countries McDonald's has already colonized.


And who knows, Lukashenko himself might even show up.


"We have invited him" Troian said. "But we haven't had a reply yet. I guess he is thinking about it."