Belarusian exports hit the bottom
On October 31st, Belstat published the January – September 2013 foreign trade data.
Belarus’ foreign trade is highly dependent on a narrow range of exported goods. Export growth potential is insignificant. Although modernization has partially improved export opportunities, any positive effects have been offset by growing exports of equipment and ill-conceived business plans.
In September, the foreign trade in goods deficit was USD 484.5 million. The main reason for this was a decline in exports to USD 2.925 billion, the lowest level since February 2011. The decline in exports was due to the drop in Belarus’ main export items – petroleum products, potash fertilizers and machinery. Production of petroleum products directly depends on the volume of supplied raw materials for processing, and in the case of Belarusian-Russian conflicts, the latter exerts pressure by limiting the oil supply to Belarus. Exports of potash fertilizers have suffered after the breakup between Uralkali and Belaruskali and will not be improved because the market prices keep falling. Mechanical engineering is dependent on the Russian market: the drop in investment demand from major customers has resulted in a sharp drop in sales, which cannot be compensated by sales in other markets. Other export items are too insignificant to affect the overall picture.
For instance, Belarusian dairy products are in great demand on the Russian market in 2013. Dairy exports are constrained by the shortage of raw materials to produce milk powder, casein, and cheese. Sugar has high export growth potential due to poor harvest in Russia. In addition, Belarus has started producing Chinese cars – Geelly, with a clear orientation on the Russian market in the future. However, even if Belarus increases exports of these items and earns up to USD 200 million per month, this will not be enough to remedy the situation.
The industrial modernization was held to expand the range of export products and their exports on foreign markets. In some cases, it worked out: for example, with some Grodno Azot products or chipboard exports. However, these are rather exceptions than a rule. Most often, modernization has resulted in increased imports of production equipment and negative output.
Modernization in Belarus has failed to diversify exports. Belarus needs not only new technologies, but also new managerial approaches, which are not feasible in the current environment.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.