Official Minsk not willing to back Kremlin in Ukraine economic blockade
Official Minsk is ready to resist the Kremlin from dragging Belarus into a trade war with Ukraine, if Belarus’ economic interests are at threat. If Moscow unilaterally imposes duties on imports from Ukraine, Belarus aspires to gain benefits from the common customs space with Russia by re-exporting Ukrainian goods to Russia. Meanwhile, the Belarusian government, without coordinating with Moscow, has introduced restrictions on importing some goods from Ukraine – as protective measures aiming to limit imports to Belarus.
Neither Belarus, nor Kazakhstan has supported Russia when the latter proposed to introduce duties on imports from Ukraine.
At the Eurasian Economic Union’s Board meeting in Sochi, Russia proposed Belarus and Kazakhstan to introduce jointly import duties on Ukrainian goods – due to Ukraine signing the economic chapter of the Association Agreement with the EU. However, official Minsk, upheld by Kazakhstan, spoke strongly against this decision. In addition, Belarus’ Foreign Ministry Spokesman Mironchik underscored that Ukraine signing the Association Agreement with the EU was “the sovereign right of a sovereign state”.
Until now, Belarus’ stance regarding the Russo-Ukrainian conflict was limited to statements about support for the new Kiev authorities and Ukraine’s territorial integrity. However, the Belarusian authorities have never dared to act independently regarding the most sensitive issues for Moscow. For example, Belarus supported Russia’s position during the UN vote on Ukraine’s territorial integrity and de facto upheld the annexation of Crimea by Russia. In addition, during the Russo-Ukrainian escalation, the Belarusian authorities allowed an increase in Russian military presence in Belarus.
The Belarusian leadership, however, is avoiding getting involved in the Kremlin’s economic pressure on Kiev, as it might destabilise the economic situation in Belarus and hinder the ongoing thaw in relations between Belarus and the EU. The USD 2 billion loan from Russia is also not enough to compensate for possible losses from a trade war with Kiev. Belarus’ Foreign Minister Makei emphasised the importance of Belarusian-Ukrainian economic relations: “Ukraine is our second most important trade partner in the former Soviet Union, after Russia. In previous years, the turnover with Ukraine was USD 8 billion, with trade surplus. "
Belarus’ representative in the EEC, Sergei Rumas said that “due to the lack of consensus [regarding import duties], Russia, according to the EEU regulations has the right to introduce these duties unilaterally”. If the Kremlin unilaterally introduces import duties on Ukraine, Belarus might gain benefits from the common customs space by re-exporting Ukrainian goods to Russia.
Meanwhile, Belarus has introduced restrictions on imports of some Ukrainian goods without coordinating these actions with Moscow. These measures comply with the current government policy aiming to reduce imports to Belarus. For instance, Belarus has introduced certification on beer and confectionery made in Ukraine, which prompted Ukrainian confectioners and brewers to suspend deliveries to Belarus.
Belarus will continue to stand up for an independent economic policy with regard to Ukraine – in particular, if her economic interests are at stake – but will mitigate her stance with rhetoric about allied support for Russia. Meanwhile, the Belarusian authorities might adopt restrictive measures against imports from Ukraine in order to carry out their import substitution policy.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.