Investment imports eat up potash exports growth
On April 1st, Statistics Ministry published foreign trade data in January-February 2013.
Industrial modernization and consumer imports growth neutralized the successes of potash exports and also became a major reason behind the international trade deterioration. In view of the planned concessional lending to industry and agriculture, further deterioration of the international trade situation should be anticipated, even if potash and dairy exports increase.
In February 2013, international trade in goods was negative: minus USD 237.7 million. In January 2013, international trade balance was minus USD 158.8 million. Compared to January-February 2012, the international trade balance deteriorated by USD 916.3 million. Taking into account the production “costs” of solvents, lubricants and biodiesel, trade surplus in 2012 improved due to innovative products by USD 200 million pm on average.
One of the few foreign trade positions in 2013, which could have a positive impact on net exports are potash fertilizers. Contracts, signed with China and India, resulted in a significant increase in potash exports volume and helped offsetting the reduced prices. In value terms, the supply of fertilizers (including the nitrogen fertilizers supply) grew by 38.4%, or by USD 132.2 million in January-February 2013 compared with same period in 2012. Potash exports in January-February 2013 have become the fastest growing exports in Belarus.
In 2013 international trade is suffering from the lack of innovative products, as well as from industrial modernization and consumer imports. In three major investment groups – goods, electrical machinery, vehicles and equipment – imports grew by over USD 420 million in January-February 2013, compared with January-February 2012. Food imports have increased by more than USD 100 million. Import of other commodities is also growing.
Thus, modernization plans and rising incomes have already had an impact on the foreign trade. International trade situation will continue deteriorating due to potential increases in lending at subsidized interest rates to industry and agriculture, even if potash fertilizers and dairy products exports increase.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.