Belarus may encounter foreign trade deficit by late 2016

December 05, 2016 9:11

According to the National Statistics Committee, in October foreign trade deficit was the highest in 2016. The overall decrease in exports of Belarusian goods to foreign markets was due to a slump in prices on key Belarusian export items. Considering expected growth in consumer imports in November and December, current foreign trade surplus may not be enough for keeping overall foreign trade surplus after year-end.

According to the National Statistics Committee, foreign trade deficit in January-October 2016 was USD 2 965 million. In the same period in 2015, the deficit was USD 2 274 million. In October 2016, foreign trade deficit reached its maximum volume and totalled USD 545.5 million. The deterioration in foreign trade in October was due to the increase in natural gas supplies in connection with the beginning of the heating season, and cuts in oil supplies from Russia to Belarus entailing a decrease in petrochemicals export.

Belarus' foreign trade in 2016 was hit by a slump in prices on exported goods (by 16% compared with 2015), while import prices reduced by 9%. Exports of petrochemicals in January-September 2016 reduced by 38% or by USD 2 billion, due to the cuts in oil supplies from Russia from 2 million tons to 1.2 million tons per month. Negative trends also affected the second most important export item, Belarusian potash fertilisers. The average price for potash decreased as compared with 2015 by 25% and totalled USD 220 per ton, export volumes fell by 11% to 6.7 million tons, which led to an overall reduction in potash exports by USD 724 million. Exports of other Belarusian products could not compensate for these losses.

Thanks to exports in transport, construction and IT sector, Belarus managed to retain surplus in foreign trade in January-September 2016 at USD 390 million. In November and December consumer imports are likely to increase, reduced supply of oil will continue until early 2017, which means that export of petrochemicals is unlikely to increase. Re-exports of vegetables and fruits to Russia were scrapped; and import of natural gas will increase due to the winter season. Low prices on the potash market are likely to retain, which means that potash exports will not compensate for the increase in imports.

Overall, the seasonal increase in imports of natural gas and the negative price trends for key Belarusian export items have led to a sharp deterioration in foreign trade in October 2016. Foreign trade surplus in November and December 2016 is unlikely to compensate for the overall deficit of foreign trade in 2016.

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Belarusian authorities hope to narrow application of Decree on ‘social parasites’
February 27, 2017 12:35
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Yet the Belarusian authorities have not taken any action to prevent massive protests against the decree on ‘social parasites’. On February 26th, 2017, multiple protests against the decree were held in three Belarusian regions in Vitebsk, Baranovichi, Brest and Bobruisk (more than 4 000 people participated in total). Very likely, the authorities, on the one hand, anticipate that the decree will be abolished, and other hand, do not want to take responsibility for decisions either on the decree or on the protests.

It should be noted, that the mass street protests on February 17th, 19th, and 26th, were held in the absence of the president in the country. There are reasons to believe that the authorities did not expect such a massive action. The state propaganda responded tangentially, insisting that protests were unjustified, because ‘the state did not require a lot’, despite the fact, that the protesters primarily complained about the lack of jobs in the country. In addition, the protesters pointed to the unfairness of the requirement to pay the tax for being unemployed as the state could not provide job and money making opportunities, while people were humiliated by the need to prove to the state they were unable to pay the tax.

In the past ten days, there were several protests against the decree, which were characterised by the following: the protesters easily picked up anti-Lukashenka slogans; they eagerly shared their outrage with journalists; many protesters said it was their first time when they took to the streets; protesters were ‘common people’, i.e. not political activists; there were fewer white-red-white flags during these protests than during conventional oppositional actions; politicians, who organised protests (eg on February 26th, by the centre-right coalition and the independent trade union) did not attempt to take the lead, especially in the regions. All this gives a picture of truly popular protests.

While refraining from interfering with the meetings and protest marches, the militia on February 26th attempted to put pressure on the protest organisers in the regions by handing out reports on administrative violations after the events. Other than that, it appears that the local and central authorities are unable to respond to the massive protests against the Decree No 3, including crowded street speeches, numerous signatories of petitions (over 80 000), multiple collective and personal appeals to the authorities, and mass meetings.

That said, the authorities are unable to enforce the Decree No 3 as they do not have sufficient resources to trial some 400 000 people for non-compliance. In addition, the authorities do not have sufficient institutional capacity to exempt all those not liable for the tax from the mailing lists of the Tax authorities. The Belarusian Bar Association will provide free legal consultations on March 1st, 2017 for those wishing be exempt from the tax imposed by the Decree No 3, however, this would only slightly east the tension in society.

In addition, despite concerns expressed by some experts and the leader of the protest in Minsk on February 17th Mikola Statkevich, there were only scarce reports in the Russian media about the protests in Belarus.