Economy Ministry seeks to gloss over domestic trade wars

April 22, 2016 18:40

On November 4th, the Economy Ministry reported that the Mogilev Regional Executive Committee had taken measures to stop anti-monopoly legislation from being violated

The Ministry of Economy has introduced various local preferences for local producers which will mean performance results deteriorate in other regions. The Ministry intends to cover up distortions in economic performance result s in the regions which occurred when regional governments attempted to report on achieving projected targets. Regulation will make trade wars between regions less obvious.

An ice-cream producer in Gomel reported to the Ministry of Economy about discrimination against its products by Mogilev retailers, which has resulted in sales dropping by 50%. Having considered the case, the Ministry ordered the Mogilev Regional Executive Committee to stop the anti-monopoly legislation from being violated and to abolish some local regulations. The Mogilev Region Executive Committee has reported that it fulfilled the Ministry’s order.

Mogilev Oblast’ economic results in 2013 are among the worst. The gross regional product in January – September 2013 decreased by 1.9 %. To stimulate growth and to increase regional budget revenues, Mogilev authorities decided to give priority to Mogilev producers and to limit trade allowances for local products. These measures have put Mogilev producers in a privileged position and stimulated sales of products made in Mogilev Oblast.

Legal violations have been eliminated de jure, however de facto discrimination still persists. The trade war between regions is still ongoing, but is not so obvious any longer. Lists of assorted goods offer products from various manufacturers on paper only. Local administrations give informal instructions to local retailers about preferred producers, the Belcoopsoyuz [Belarusian Union of Consumerist Societies] and other state-owned trade bodies also receive informal instructions to buy from only certain manufacturers.

Belarus’ government may have pro-forma eliminated anti-monopoly legislation violations so as not to allow regional trade wars become blatant discrimination against producers from other regions. However, such practices cannot be eradicated completely, and local authorities will continue lobbying the interests of local producers because they fear losing out in competition with other producers and therefore in local budget revenues.