Farmers feed industrialists? What is the state of the Belarusian economy today
However, if the relations within the Union State are dominated by the principles of unlimited competition and protectionism, then the very meaning of integration will be lost. But is it possible to reconcile integration processes with national interests? View from Belarus.
"Skinny years"?
"Skinny years"?
Economic crisis 2013-2016 became a difficult test for Belarus. Of course, there have been positive events for MINSK, such as the creation of the EAEU, the lifting of part of the sanctions by the European Union, and the building up of contacts with foreign partners.
On the other hand, Belarus has not yet received the expected return from this, and the process of rethinking economic policy and searching for optimal mechanisms for building it is still ongoing. Let's try to figure out what happened in the Belarusian economy in the retrospective of the crisis years.
Traditionally, the main economic partner of Belarus is RUSSIA , the scale of trade with which significantly exceeds the volume of trade with other states (see tables 1, 2).
Table 1. Foreign trade of the Republic of Belarus in goods (million US dollars , in current prices).
2013
2014
2015
2016
Trade turnover
80 226
76 583
56 952
50 986
Volume of foreign trade in goods
37 203
36 081
26 660
23 416
Import
43 023
40 502
30 292
27 570
Balance
-5 820
-4 421
-3 632
-4 154
With EAEU Member States
Export
17 707
16 060
11 007
11 253
Import
22 987
22 277
17 204
15 366
Balance
-5 280
-6 217
-6 197
- 4 113
with Russia
Export
16 837
15 181
10 398
10 819
Import
22 905
22 190
17 143
15 295
Balance
-6 068
-7 009
-6 745
-4 476
With EU countries
Export
10 462
10 668
8 549
5 672
Import
10 508
9449
5 834
5 504
Balance
-46
1 219
2715
168
Belarus in numbers: statistical handbook. - Minsk: National Statistical Committee of the Republic of Belarus, 2017. - P. 65–66.
Table 2. Export and import of goods by three main trading partners of the Republic of Belarus in 2016
Export
Country name
in % of total exports
Amount of export, mln usd
Russia
46.2%
10 819
Ukraine
12.2%
2848
United Kingdom
4.6%
1083
Import
Country name
in % of total imports
Amount of imports, mln USD
Russia
55.5%
15 295
7.7%
2115
Germany
4.8%
1 332
Belarus in numbers: statistical handbook. - Minsk: National Statistical Committee of the Republic of Belarus, 2017. - P. 65–66.
Let's look at the structure of Belarusian exports to Russia. In 2015, out of the top ten positions, six were food industry products and two were engineering products. Due to the depreciation of the currency, revenue in DOLLAR terms decreased compared to 2013 in all positions except for cheese and cottage cheese (see Table 3).
Table 3. Main export items of Belarusian products to Russia in 2015
Name of product
Cost (million USD)
2013
2015
1. Cheeses and cottage cheese
628.0
629.8
2. MILK and cream condensed and dry
779.4
459.9
3. Beef fresh, chilled and frozen
595.7
445.7
4. Trucks, pieces
850.4
434.7
5. Oil products
885.1
372.4
6. Butter
334.4
267.4
7. Furniture and its parts
377.0
239.6
8. Tractors and truck tractors
664.7
226.7
9. MEAT and edible offal of poultry
217.0
199.3
10. Non-condensed milk and cream
226.3
185.2
Foreign trade of the Republic of Belarus: statistical collection. - Minsk: National Statistical Committee of the Republic of Belarus, 2016. - 395 p.
Farmers feed industrialists?
However, the physical volumes of deliveries of food industry products in 2015 increased. From 2013 to 2015 supplies of fish (dried, salted, smoked, processed in other ways) increased 4 times (from 4,976 to 20,233 tons), frozen vegetables - 18 times (from 2,630 to 49,402 tons), fresh fruits - five times (from 14,101 to 70,920 tons), frozen fruits - by 100 times (from 405 to 40,520 tons), etc.
In other words, Belarus adjusted to the needs of demand in time and filled the gap formed after the introduction of anti-Russian sanctions in the Russian food market.
The situation is different in mechanical engineering. Here, exports have decreased significantly, and already in absolute terms, not in value terms. While positive dynamics was recorded for cars and trucks in 2016, the situation became even worse for tractors (see Table 4). For special purpose vehicles, the amount of exports increased compared to 2015, but the number of vehicles sold decreased. It happened because of the increase in the cost of this product - from $73,644 to $93,768.
Table 4. Export of Belarusian engineering products to Russia (million US dollars).
Name of product
2013
Quantity / Cost
2015
Quantity / Cost
2016
Quantity / Cost
Tractors and saddles
tractors, thousand units
31.2
664.7
15.1
226.7
12.9
216.8
Cars designed to carry 10 or more people, pieces
1 383
141.1
655
49.7
999
87.4
Passenger cars, thousand units
37.0
485.5
8.5
119.7
10.5
194.5
Trucks, pieces
8 605
850.4
2551
434.7
3343
484.1
Special purpose vehicles, pieces
486
69.6
377
27.8
339
31.8
Total
2211.3
858.4
1014.6
Source: National Statistical Committee of the Republic of Belarus.
The media is not in the right direction?
However, in the media space, the problem of Belarusian engineering has gone aside. Food "wars" that arose in response to the off-scale Belarusian exports to Russia in 2015 entered the agenda. Mechanical engineering is an industry that determines the quality of the state as an industrial regional center. Without it, the corresponding status will be lost, and together with the proletariat thrown into the street, Belarus will become another hotbed of tension and instability in Eastern Europe.
The ability of the state to support enterprises in a difficult situation proved to be limited. This was partly due to the fall in the price of oil , whose refined products are the main Belarusian export item.
From 2014 to 2015 prices for exported oil products decreased from $716 per ton on average to $403. The Belarusian side tried to compensate for financial losses by increasing sales volumes (from 13.6 million tons in 2014 to 16.9 in 2015). The supply of petroleum products to the UK alone more than doubled.
Despite this, oil product sales were $3 billion less than in 2014 (see Tables 5 and 6). But in 2016, this opportunity was also blocked: exports fell to 13 million tons, which is the lowest figure since 2004; foreign exchange earnings fell to $4 billion. Thus, by the beginning of 2017, Belarus "missed" more than $6 billion, which it had due to the sale of petroleum products in 2013. Due to this, there was a reduction in the positive balance in trade with the EU, which decreased from $2 .7 billion in 2015 to $168 million in 2016 (see table 1).
Table 5. The amount of Belarusian exports of oil and oil products (thousand US dollars).
Name of product
2013
2014
2015
Crude oil
1,241,330.8
1,124,281.9
579 325.6
Oil products
10,155,492.7
9 853 252.9
6,786,418.7
Table 6. Distribution of exports of Belarusian oil products by countries.
Importing countries
2014
2015
Quantity, thousand tons
Cost (thousand US dollars)
Quantity, thousand tons
Cost (thousand US dollars)
1. UK
3464.4
2,368,707.3
7,791.1
2,832,066.2
2. Ukraine
3443.9
3,162,240.0
3214.0
1,702,746.0
3. Netherlands
2254.1
1,238,377.4
2910.6
880 595.4
4. Russian Federation
1802.1
1,064,741.3
903.0
372 425.3
5. Lithuania
345.1
315 943.4
604.2
338 741.9
6. Latvia
307.1
279,095.6
423.2
216 127.0
7. Serbia
72.3
37,124.9
300.0
80,739.7
8. Poland
58.7
52,849.4
151.1
76,947.7
9. Moldova
147.0
126,519.6
85.6
45,544.5
10. Kazakhstan
144.7
88,487.3
110.2
44,517.6
The supply of petroleum products to Russia has significantly decreased, and in 2016 their exports decreased to 268.2 thousand tons, which is almost seven times less compared to 2014.
Interests of the Union State
Of course, we can stop here and state the fact that the Belarusian economy is dependent on the Russian one. This was precisely the media rhetoric of late 2016 and early 2017. To a much lesser extent, the problem was considered in the plane of the national interests of the two states.
And if the economy presupposes competition, then it is absurd to consider the national interests of the participants of the Union State only from the standpoint of competition. Simply put, if relations within the Union State will be determined solely by competition in the commodity markets, then the project's existence is largely lost - market competition will do without it.
It is advisable to consider the content of Russian-Belarusian relations more broadly and use the following scheme:
The national interests of Belarus and Russia should influence the content of economic activity, correct it and direct it in a direction that is beneficial strategically, and not vice versa. In such a situation, it is necessary to develop a unified strategy that takes into account the national interests of the allies as much as possible.
Не менее важно внятно донести положения этой стратегии до общественности и минимизировать недопонимание по сложным вопросам белорусско-российских отношений. К сожалению, этот вопрос оказался вынесен на периферию. Тогда как Евразийский экономический союз является проецированием национальных интересов Беларуси на постсоветское пространство, информационное обеспечение евразийской политики оставляет желать лучшего. Оно формируется преимущественно исполнительной властью и большей частью на внутренний рынок. Поэтому возможности Минска быстро и оперативно влиять на освещение интеграционных процессов за пределами Беларуси ограничены. Назрела необходимость правильно сгруппировать точки понимания в Союзном государстве, но в условиях дефицита белорусской «мягкой силы» сделать это затруднительно.