Belarusian foreign trade performance will be put through the test with solvents

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April 22, 2016 18:15

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.

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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.

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