International goods trade: no chance for positive trend
On July 1st, Belstat released data on foreign trade in January-May 2013. Exports amounted to USD 16 billion (decreased by 15.6% compared with January-May 2012), imports - USD 17.42 billion (down 10.9%), foreign trade deficit - minus USD 1.4 billion.
In May, Belarus has lost one of the main exports – potash sales. Concerns about the growth in investment goods imports have been fully justified. Merchandise trade will not only be unable to shift to an upward trend by the year-end, but the situation might deteriorate even further and one of the main reasons would be African swine fever (ASF).
According to the National Statistics Committee in May foreign trade balance was negative USD 372.9 million. The negative export trend in May also showed two major exports - oil and potash fertilizers. If in Q1 2013 fertilizers were one of the two positions which showed exports growth by at least USD 100 million compared with Q1 2012, in January – May potash exports dropped compared with 2012. On June 30th, contract for potash supply to China expired. There are no chances to conclude a new one by the year-end. Brazilian market remains the only chance for Belaruskaliy to maintain foreign exchange proceeds not lower than in 2012.
Industrial modernization has resulted in a sharp increase in investment imports. Imports reduction to that of last year should not mislead. In fact, only one import position has dropped significantly - oil, which was used to produce solvents, lubricants and biodiesel in large volumes. Trucks, electrical machinery and equipment imports increased by more than USD 1 billion in January-May 2013 compared with 2012.
The foreign trade situation is deteriorating in several dimensions. One of the main potential threats is the loss of the Ukrainian market of petroleum products. Rosneft and Vetek plan to start oil supplies to Ukrainian refineries, which can result in decreased demand for Belarusian oil products. ASF virus can have serious economic consequences not only for agriculture but also for the economy as a whole. On average, pork production exports’ proceeds were USD 40 million per month. Deliveries from two regions have already stopped. If the virus spreads across the country, Belarus will have difficulties not only with meat exports and supplies, but also with implementation of quarantine measures, which will reduce the traffic intensity through Belarus.
Thus, even theoretically, it would be impossible for Belarus to achieve foreign trade in goods surplus. Given open borders with Russia, Belarus is unable to discourage consumer imports, and investment equipment import for the modernization purposes is declared a priority. Simultaneously, Belarus’ export potential is not great and is subject to risks – both due to domestic causes and due to the world economy slowdown.
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.