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BELARUSIAN - RUSSIAN RELATIONS
YAROSLAV ROMANCHUK,
President of the Minsk-based Mizes Center
Yaroslav Romanchuk commented to “Eurasian Home” on the prospects of the relations between Russia and Belarus within the context of the Economic Forum held in Minsk on September 6-9.
EURASIAN HOME: “How would you describe the Belarusian-Russian forum in terms of its influence on the develpment of the economic integration between the two countries?”
As a matter of fact, this event should be regarded as a PR action of Belarusian authorities aimed at accomplishing their short-term tactical political ends. There are no any specific track records behind this event.
Neither a single joint Belarusian-Russian venture, nor at least a Russian enterprise in Belarus, nor a Belarusian enterprise in Russia, has been established during the existence of the Belarus-Russia Union. Russian government or Russian private banks’ lending to Belarus and their share in joint projects with the Belarusian government can hardly serve as a proof of successful performance of the economic integration.
All the achievements of the Belarus-Russia Union reduce to the advance in energy resources supply. However, I dare to assume that oil and gas imports to Belarus, and their transit through our country would take place anyways, with the Belarus-Russia Union or without it. If to deduct oil products from the Belarusian-Russian trade balance one can see that the situation is far from being optimistic.
The Belarusian-Russian Forum was just a formal event, just an ordinary exhibition. But this time it was held on the governments’ request, not the business’ one. The Belarusian TV coverage of the event was to convince the Belarusian voters in the validity of Lukashenka’s deal. That’s it.
As for the Russian businessmen, they would hardly wish to invest big money in Belarus, after they plunge into Belarusian legal environment. The more Russian businessmen would get to know about the Belarusian economy in Belarus, rather than from the booklets of the Belarusian Chamber of Commerce and Industry, or the Belarusian Embassy, the more adversaries of the chosen integration model would appear.
This Forum had one more objective. It had to show the Kremlin that there are lots of companies that are interested in maintenance of the current layout of the political relationships between Belarus and Russia. That is a kind of preparation of the Belarusian lobby in Russia in the run-up to the presidential elections. Aliaksandr Lukashenka is aware of the fact that the Kremlin officials discuss various scenarios of Russia’s reaction to the upcoming political events in Belarus. So, he tries to enliven staunch individuals and agencies in order to induce Putin to make a favorable decision for Lukashenka.
EURASIAN HOME: “Recently, Belarus has come to face the decline in exports to Russia and the reduction of the growth rates in the trade between the two countries. Are there any premises that might change the situation?”
Nowadays there are very few investments in the fixed capital stock made to enlarge manufacturing facilities. So, the competitive potential of the Belarusian economy is really limited.
Belarus is very much dependent on the export potential of a small number of enterprises. In Belarus there are 20 largest exporters which assure over 55% of the total exports and over 80% of exports outside the CIS. In 2004 over 50% of the exports fell on ten major export items. With such an export concentration Belarus is very vulnerable to the external shocks, particularly to those ones which can be caused by the recession in demand in the Russian market, for example due to the deflation of the world oil prices.
Besides, only 25% of the industrial enterprises are exporting their products outside the CIS. This implies that the overwhelming majority of the Belarusian enterprises operate in the framework of the small closed economy. They don’t know yet what it means to produce, to manage, and to compete. And it is the government who should be blamed for that. It prefers to keep afloat 20 enterprises, inherited from the USSR, by allocating into them the budgetary funds and by trade protection, rather than spend resources on establishing new undertakings.
The aforementioned problems don’t constitute the whole list. There is one more alarm signal in the state of the Belarusian economy. It is the altering of the composition of exports in favor of those goods that are manufactured with the intensive employment of natural resources and unskilled labor. This means that the growth of the Belarusian GDP and exports is provided by hands rather than brains.
EURASIAN HOME: “What is your forecast on the issue of the prices for energy products that Russia supplies to Belarus?”
Unfortunately, the issue of the gas prices has become a political one. According to the logic of the development concept for the Russian gas market, Gazprom is supposed to raise gas prices for Belarus by 20 – 25%, i.e. to the level of $ 58 – 60 for 1000 cubic meters. But Belarus has at its disposal several bargain chips against the implementation of this decision: the commissioning of the second branch of the Yamal – Europe gas pipeline, the creation of joint ventures on the basis of Beltransgaz, the admission of the Russian capital to other spheres, political loyalty, etc. The result is that there appears a kind of a package deal; its final outline will be known only by the turn of the year. By now it is clear that Russia is not ready to build up the relationships with Belarus merely on the economic and commercial basis. Thereby, Moscow creates more problems than derives benefits. Cheap fuel and energy resources (as compared to the neighboring markets) are a bad tool of the integration policy.
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