Belarusian authorities restrict imports with temporary licensing
Due to rising real incomes, consumer goods imports have been on the rise amid an overall decline in imports. By introducing temporary restrictions on the imports of some goods, the government aims to improve sales of domestically produced goods and foreign trade balance. Countries outside the Customs Union may introduce reciprocal restrictions, thus minimising positive effects from licensing.
As of June 1st, Belarus introduces licensing on importing pasta, confectionery and their ingredients from outside the Customs Union.
In Q1 2014, the international trade deficit was USD 129.3 million. In Q1 2013, the deficit was USD 694.8 million. In Q1 2013, consumer goods trade surplus was USD 246.2 million, however a deficit occurred in Q1 2014. Due to pay rises and therefore consumer incomes growth, imports of fruit, vegetables, fish, chocolate, bread, and pastry products have increased.
The said licensing is introduced for a limited time-period – until November 30th, 2014. Similar restrictions on beer imports will be in effect until October 31st, 2014. With these restrictions, the government aims to protect domestic producers from competing with foreign producers, primarily Ukrainian. The devaluation of the Ukrainian hryvnia has made Ukrainian foodstuffs cheaper and increased their competitiveness on the Belarusian market. Amid falling profits in the Belarus’ food industry, import restrictions might improve the industry’s financial health.
However, the said measures might have little effect. The bulk of these goods are imported from Russia. For instance, in Q1 2014, Belarus imported USD 7.6 million worth of pasta, including USD 4.6 million worth from Russia. By restricting imports from countries outside the Customs Union, Belarus encourages Russian companies to take over current suppliers. As a result, instead of reducing imports, Belarus will change their origin. Import volumes subject to licensing are insignificant and would have no considerable impact on the trade balance.
Meanwhile, countries, which will be affected by the licensing, might introduce restrictions on Belarusian products in response. Ukraine may limit imports of petroleum products from Belarus, which is an extremely sensitive issue for Belarus, and demand restrictions on their products to be abolished. If so, the licensing will only have negative effects and the trade balance will not improve.
The Belarusian government has once again resorted to ineffective measures, which, given the open border with Russia, would not have the desired effect. Reciprocal actions against Belarusian products may lead to Belarus’ trade relations with major trading partners deteriorating and fewer exports to these countries.
President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.
President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.
The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.
The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.
The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.