Foreign trade in July: expected results against suspension of innovative schemes
With high probability it can be argued that a sharp slowdown in the foreign trade surplus is a direct consequence of the suspension of innovative schemes (export of solvents and thinners made from Russian oil products). Further foreign trade trend will depend on which schemes are suspended and for how long.
On September 3rd, Belstat published Belarus’ trade balance data in January-July 2012.
A trade surplus in January-July 2012 was USD 2013.8 million. In January – June 2012 the value was USD 1990.6 million. It would be wrong to conclude that the difference between the two figures made July surplus. Accurate data with monthly breakdown will be announced on September 15-16, and the data for January-June will be adjusted, changing the final balance.
There are a number of innovative schemes with a varying degree of dependence on Russia. The primary one – solvents production based on Russian naphtha supply. At the moment this scheme is suspended and is unlikely to be renewed due to a number of reasons. Solvents supply is under investigation by the Russian Investigative Committee and its outcome is not yet known. Moreover, the demand for straight-run gasoline is high, and it is more economically profitable for Russian companies to supply these products to other destinations.
Lubricants production is based on fuel oil component. The scheme could not be blocked entirely because fuel oil could be produced in sufficient volumes by Belarusian refineries. However, recently the supply of lubricants has decreased, which may be the result of unofficial measures taken against the Russian companies involved in these operations.
Biodiesel is supplied to two main regions: Latvia and Ukraine. Until now there were no problems with supplies to Latvia. However measures undertaken by Estonia with regard to cheap fuel from Russia in a while could affect a wide range of petroleum products, including those made in Belarus, as biodiesel shipments are significant and not only to Latvian market, but to all Baltic countries.
In Ukraine, as a result of both, economic and political processes, biodiesel supplies have been suspended and an investigation has been initiated by the TNK-BP concerning biodiesel supply from Belarus. Moreover, the decision concerning LINIK’s fate (Lisichansk refinery) has been announced, which could have a negative impact also on the traditional petroleum products supply from Belarus.
Therefore, if the majority of schemes are suspended, the share of ‘oil products’ exports in the foreign trade will decrease significantly and the share of imports – to a lesser extent. There are no other exports which could replace such exports. Potash supplies and machinery could compensate these losses to a certain extent. However, they cannot replace the decreasing export volumes entirely. Positive trade balance depends purely on the volume of innovative schemes. If all schemes are suspended, the trade balance will return to its negative values.
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.