Belarusian foreign trade performance will be put through the test with solvents
Termination of naphtha supply, which was used to produce Belarusian ‘innovative solvents’ may jeopardize the trade surplus Belarus has achieved for the first time in many years.
On July 24th naphtha supply to Belarus was suspended, it was used to produce solvents, which were further exported duty-free within batch 38.
These actions by the Russian government are meant as counteractions against Belarusian counterparts, which were reasonably suspected of re-export of Russian oil products.
Positive trade balance in January – May 2012 was USD 1,513.7 million. This figure does not include export duties on petroleum products, paid to the Russian budget. During the same period, Belarus exported 2.41 million tons of solvents worth USD 2,181 million. Given the increased export duties on naphtha (90% of oil duties), independent analysts estimate the potential unpaid fees exceeding USD 1 billion.
Moreover, there were problems with deliveries of Belarusian biodiesel produced by “Triple-Energy”. Ukrainian petroleum market players were informed about the termination of biodiesel supply as of September 2012. In the first half of 2012 Ukrainian deliveries of biodiesel were over 600,000 tons duty free.
The sequence of events (Mr. Medvedev’s visit to Belarus, the termination of naphtha supply and seized supply of biodiesel to Ukraine) suggests that verbal threats concerning seizure of possible illegal re-export schemes entered their practical implementation.
Thus, if all illegal Russian oil re-exports schemes are cut off (export of Russian oil as solvents, lubricants, biodiesel), the Belarusian trade surplus could vanish even without paid petroleum duties and the Belarusian foreign trade would fall in conventional negative values.
The Belarusian authorities could to step up the opposition representation in local councils, should party members demonstrate potency. The Belarusian leadership is unlikely to have the resources to ensure 100 percent pro-government candidates in the local elections. The authorities have exhausted the grassroot support and have no funds to pay for the loyalty.
The Belarusian Central Election Commission has proposed to hold the elections to the local Councils of Deputies on February 18th, 2018.
The president has repeatedly emphasised the importance of the local councils in the power system and the state machine always tried to ensure the necessary local election results. Candidates have been decreasing in number with each elections and the authorities dealt with that by reducing the deputy corps. That said, during the rule of President Lukashenka, his electoral base has changed substantially. Over the past decade, most Belarusians have moved to cities and lost their local roots. The rural population is ready to support the president, but rural residents are constantly decreasing in number.
The Belarusian leadership is likely to permit broad participation in the election campaign and an increase in alternative representatives in the local councils. However, the opposition would have to boost its activity, so as so far it has been passive in defending its interests. In addition, the authorities, while determining the date for the local elections, have taken into account the fact that the opposition is usually the least active in the winter time.
Overall, both, the opposition and the local authorities have exhausted their grassroot support, however new local leaders may still come on political stage, although the party opposition has not yet shown sufficient aspirations.