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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Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

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.

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