The capital of former Soviet republic Belarus, Minsk is still struggling to gain economic prosperity nearly three decades after the split from the Soviet Union. The city suffers from poor labour productivity compared with its Eastern European peers which pursued economic reforms. The authorities prevent extreme poverty by providing affordable housing and utilities.
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Minsk plays a leading role in the country, and serves as its economic and industrial centre. In 2016, Minsk's labour productivity exceeded that in the rest of the country by 61%. Among its Eastern European first-tier peers, however, only Kiev and Novosibirsk fared worse (yet only by 2%, in 2016).
Superior labour productivity is one of the main reasons behind 51% higher household disposable income in the city in 2016 compared with elsewhere in Belarus. This income inequality is surprisingly high, given the low unemployment rate (1.2% of the active population in 2016), and the regime's declared aim to eradicate poverty.
Excluding transport and housing, consumer expenditure per household was 50% higher in Minsk than in the rest of the country in 2016. However, compared with other major Eastern European cities, Minsk's households allocated the highest share of spending to food and non-alcoholic beverages (32% in 2016), implying relatively low living standards in the city.
Minsk features an extremely low share of the household budget on housing and transport in urban Eastern Europe (and globally): 14% of total expenditure, versus 20% in Moscow. In the national context, living costs are 10% higher in Minsk than in the rest of the country, on average. Transport is particularly affordable in the city (only 7% higher than in the rest of the country in 2016), while housing is also not very expensive (16% more than elsewhere in Belarus in the same year), given the superior disposable incomes (+51%, in 2016).