Sales of Belarusian products much worse than official statistics suggest

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April 22, 2016 18:38

On September 17th the head of the Russian Association for Agricultural Machinery (‘Rosagromash’) and Rostselmash co-owner Konstantin Babkin complained about the dominance of Belarusian equipment on the Russian market.

Despite free access for some products to the Russian market, sales of Belarusian industry products in Russia, and other countries, are shrinking. So far, the government has managed to manipulate the numbers to hide the real situation. But the reality is much worse than the official statistics suggest. Belarus’ participation in the Customs Union and the Common Economic Space is unable to stop Belarusian goods from being pushed off the Russian market.

The 2020 Industrial Development Programme envisages that by 2020 Belarus will increase the sales of combine harvesters on the world markets from 10% to 15%. However, this task might be unattainable, given today’s problems with selling Belarusian equipment in Russia, which is Belarus’ major export market.

Gomselmash’ sells about 90% of its equipment through joint ventures and manufacturing facilities in Russia. At the same time, in 2013, supplies of agricultural machinery to the Russian market had reduced, despite the favorable conditions created by Russia. In February 2013 the Eurasian Economic Commission decided to introduce protective duty on combine harvesters, and on June 25th this measure was extended until March 14th, 2016.

The Rosagromash Head, Konstantin Babkin, said “The Russian market is open for Belarusian agricultural equipment, about 70% of Belarusian agricultural equipment is sold through Russian government structures using state banks loans and through ‘Rosagroleasing’”.

The production volume of combine harvesters in Belarus has been consistently declining since 2010 (2,035 units in 2010, 1,900 in 2011 and 864 in 2012). In H1 2013, Belarus produced 892 combine harvesters. As of July 1st, 2013 stocks of grain harvesters in Belarus were 408 units or 274% of the average monthly production volume. According to Babkin, there are 3,500 unsold Belarusian harvesters in Russia.

The discrepancy in the figures shows the real scale of the sales problem. Unsold Belarusian harvesters are transferred to the balance of dealers, distribution companies and trading houses, and reflected in the official statistics as exports. As of August 1st, 2013 the outstanding foreign receivables at Belarusian enterprises were BYR 2.8867 trillion, a 41.1% increase since January 2013.

A trend in ‘shrinking’ Belarusian exports to the Russian market persists. Neither the Customs Union, nor the Common Economic Space have stimulated the development of export-oriented economy in Belarus. In addition, after Russia’s WTO accession, the conflict of interests between Belarusian and Russian producers has grown in the face of stiffer competition from global brands.

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President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.

President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.

The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.

The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.

The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.

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