Potash fertilizers hinder GDP growth in Belarus
On September 19th, the National Statistics Committee published Belarus’ major socio-economic indicators in January - August 2013.
Data from August 2013 shows the Belarusian economic situation compared with 2012. The potential industrial performance growth was offset by a significant drop in the production of potash fertilizers. The government will have to adjust the 2014 plans downwards, since there are no apparent drivers for economic growth.
In August 2013, a period of high comparative base in the petro-chemical industry came to an end. The last tank of solvents was sold on August 4th, 2012, which allowed ‘clean’ performance indicators to be gathered for one of the leading industries (which excluded the effects of solvents on the industrial production index). The ‘cleanest’ data will be reported in October 2013 (biodiesel exports were suspended in September 2012). It was anticipated that August 2013 data should show GDP growth, enabling the government to talk about overcoming the economic crisis in Belarus.
However, economic performance results in January – August 2013 were worse than anticipated. GDP growth slowed from 1.4% in January – August 2012, to 1.1 % in 2013, which implies that GDP in August 2013 is below GDP in August 2012. The main reason is the negative situation with potash production, which slowed by almost 40% having a negative impact on Belarus’ economy. The industrial production index in January – August was 95.2%, and August 2013 to August 2012 – 93.1%. The positive dynamics in the food and cement industries were unable to rectify the situation in the industry as a whole. Negative trends strengthened in the mechanical engineering and metallurgy.
The negative trends not only put an end to the initial GDP forecasts for 2013 (6-8%), but also to the readjusted version (4.6 %). The government’s forecast was unachievable and the economic growth reserves were significantly overestimated. The forecast for 2014 has to be calculated more realistically in order not to distort the macroeconomic parameters. Unfortunately, such an obvious and rational solution is not understood by the country’s top managers.
As a result, the Belarusian economy is highly dependent on a few key industries, which increases the risk of negative developments in the economy as whole. The government should take a very careful approach when projecting forecast parameters for the budget and socio-economic development, because the economy has very little growth capacity in the coming years.
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.