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Belarus and developing countries: CRITICAL optimization OF RELATIONS
Sergei Bogdan
Summary
In 2017 Belarus pursued a relatively cautious policy towards countries of the developing world, except for China. But this policy was most likely the beginning of a critical reassessment of these relations and not stagnation. The staff of the Ministry of Foreign Affairs was reduced; new schemes of cooperation with developing countries were searched for. The policy for this category of countries was not revised: the tendency of Belarusian officials to set unrealistic tasks is still alive, as well as the focus on the development of economic interaction without proper training of industry entities. However, the corresponding critical approach increased during the year and touched even the cooperation with China. Branch accents were also shifted, now attention is paid not only to the advancement of engineering products, but also to the food industry, etc.
Trends:
• Development of relations with China remains one of the fundamental priorities of foreign policy;
• Political engagement with the countries of North Africa, South and South-East Asia again contributed to economic engagement;
• Despite unrealistic plans to increase trade, Minsk notes more criticality and flexibility in relations with the developing countries.
Better Chinese future
The main focus for Minsk was Beijing — not only as an important partner, a huge market and a source of investment. China is the main hope of the Belarusian leadership for a better future. Minsk hopes that if it keeps the Chinese side, then, taking into account the rise of China, sooner or later, this great country will remake the global rules and classifications and, will give in particular, to the Belarusians a better life and protect them from the West and Russia. Minsk believes that this is just a matter of time, and problems with Moscow or the West in this logic are perceived as temporary difficulties.
Minsk supported the global ambitions of Beijing, on 13—15 May, President Lukashenko took part in the forum 'Belt and
Road Forum' (BARF) in Beijing. The Belarusian authorities say that Belarus is involved in two of the four 'key routes of the new silk road'.1 However, in reality Minsk has to fight for its place in the initiative, as Belarus does not belong to any of the official corridors of BARF and is an annex to the Russian direction.
Belarus also joined international structures dominated by China, like the Shanghai Cooperation Organization.
The Chinese side noted the position. During the year Belarus was visited by six Chinese officials of the Ministerial level, as well as the leadership of three Chinese provinces, there were contacts with major Chinese businesses ('Midea Group', 'Sinomach', China UnionPay, etc.).
Minsk seeks a comprehensive partnership with China, despite the problems of economic cooperation with this country. Since the mid-2000s, Belarus experiences a large deficit in trade with China, and this issue was regularly raised in bilateral negotiations in 2017.
Beijing reacts to criticism of Minsk, giving the latter some help. For example, the meeting of Lukashenko and Xi Jinping resulted in signing of an agreement on technical-economic assistance for the construction of public housing in Belarus. In June, Beijing delivered another batch of armored vehicles as an aid to the Belarusian army. China also opened its market for Belarusian food products: in 2016 — for dairy products and in 2017 — for meat. In absolute terms, the export of the latter is still modest, but China is important as an alternative to the Russian market.
However, even tasks in increasing exports to China in 2017—2020, approved in May by the Belarusian government, show that Minsk does not expect in the near future to overcome the trade deficit. What is more, in 2017 the export of Belarusian goods to China decreased by 23.3% and amounted to USD 362,7 million, and import increased by 28.8% having reached USD 2,743 billion. As a result the negative balance grew to USD 2,381 billion.
"Opening of Belt and Road Forum for International Cooperation." The Official Internet Portal of the President of the Republic of Belarus. 14 May 2017. Web. 27 Mar. 2018. <http://president.gov.by/en/news_en/view/ working-visit-to-peoples-republic-of-china-16178/>.
Minsk uses Chinese money and technology to restructure the industry. For example, 'Amkador', a manufacturer of heavy equipment, received a Chinese loan of more than USD 192 million for the construction of a new plant. China's CITIC Construction Co. in 2017, finished the construction of the plant 'BELGEE', and completed the second stage of modernization of Orsa flax factory. Zoomlion started in Mahiliou a joint production with MAZ of construction and utility equipment and signed an agreement with the plant 'Strommashyna'.
Beside the achievements, there are contradictions. Minsk did not agree with the Chinese company Zongshen on the sale of 'Homselmash', as the conditions were not acceptable for Belarus.2 The construction of a factory on manufacture of engines 'MAZ-Weichai' began, which will create an alternative to Minsk motor plant.
An ambiguous situation exists around the most bombastic Chinese-Belarusian project, an Industrial Park of Great Stone. According to the Belarusian leadership, it should become a tool for Belarusian participation in the Chinese initiative of BARF.3
Belarusian government officials boast that the Park is being built ahead of deadlines. But Deputy Prime Minister Anatoly Kalinin admits that 'the larger tasks of attracting investment and residents' are yet to be implemented.4 The Belarusian authorities insist that the Park should welcome the latest technology, demonstrating the concern of the Belarusian side on this. One of the ways out is the attraction of Chinese state-owned corporations, including the defensive industry.5
«Не сошлись характерами.» СБ. Беларусь сегодня. 30 Jan. 2018. Web. 27 Mar. 2018. <https://wwwsb.by/articles/ne-soshlis-kharakterami-investori.html>.
«Совещание по приоритетам внешней политики Беларуси на современном этапе.» Официальный портал Президента РБ. 11 June
2017. Web. 27 Mar. 2018. <http://president.gov.by/ru/news_ru/view/ soveschanie-po-prioritetam-vneshnej-politiki-belarusi-na-sovremennom-etape-16653/>.
«Анатолий Калинин встретился с представителем компании China Merchants Group.» Совет министров РБ. 21 Mar. 2017. Web. 27 Mar.
2018. <http://www.government.by/ru/content/7115>.
"Meeting with Chairman of State-owned Assets Supervision and Administration Commission at China's State Council Xiao Yaqing." The
2
Minsk tries to obtain the strategic support of Beijing in the short term. In particular, the government in 2017 was negotiating the placement of Belarusian bonds on the Chinese market, which would allow Minsk to raise funds. On the other hand, during the May meeting of the Belarusian and Chinese leaders, Beijing promised to consider the allocation of funds to Minsk to complete its Oil refinery upgrade, which would strengthen the economic independence of Belarus. For this project Minsk asks from the CPR approximately USD 1 billion of untied loans for the purchase of Western technology.6
Middle East: calm as ever
Minsk focuses on the developing of relations with the wealthy Arab monarchies associated with the West and the Middle East and South Asian regimes (Turkey, Egypt, Pakistan) that are close to these monarchies. At the same time, Belarus has minimal contact with their regional adversaries — Iran, Iraq and Syria.
As for cooperation in 2017, there is no need to overestimate the importance of the working visit of the Belarusian President to the UAE in November, which lasted almost two weeks, but had a minimal of official contacts.
A more important direction for Belarusian policy in the region was Turkey. During the May Forum in Beijing Lukashenko met with Turkish President Erdogan. They agreed to intensify work on the creation of joint ventures.7 On July 27 the delegation of the Turkish government visited Belarus and by the end of the year two Turkish Ministers paid visits to Belarus.
Official Internet Portal of the President of the Republic of Belarus. 1 Aug. 2017. Web. 27 Mar. 2018. <http://president.gov.by/en/news_en/view/meeting-with-chairman-of-state-owned-assets-supervision-and-administration-commission-at-chinas-state-16771/>.
"Meeting with China President Xi Jinping." The Official Internet Portal of the President of the Republic of Belarus. 16 May 2017. Web. 27 Mar. 2018. <http://president.gov.by/en/news_en/view/meeting-with-china-president-xi-jinping-16199/>.
"Participation in Belt and Road roundtable summit in Beijing." The Official Internet Portal of the President of the Republic of Belarus. 15 May 2017. Web. 27 Mar. 2018. <http://president.gov.by/en/news_en/view/ participation-in-belt-and-road-roundtable-summit-in-beijing-16197/>.
The Belarusian government was in contact with large Turkish companies — the construction company Emsas and telecommunications company Turkcell. Belarusian companies Homselmash and Amkador are working on setting up joint ventures in Turkey.
The trade turnover with Turkey in 2017 amounted USD 114.9% from the volume of 2016 and reached USD 942,1 million. It was the third largest negative balance for Belarus — USD 673,4 million, but due to the potential re-export it is difficult to assess the impact of this supply growth to the trade balance of the country.
Contacts with the countries of the opposite regional grouping centered on Iran were too modest. Belarus provided humanitarian assistance to Syria and took a few dozen of Syrian children on vacation.
Africa ends in Egypt and Sudan
On 14—17 January, President Lukashenko visited Egypt and Sudan, where he signed memorandums in the field of culture and military-technical cooperation and declared the readiness of joint production in the field of mechanical engineering that will not be the first attempt to do this. As Ambassador of Belarus to Egypt, Rachkov reported the assembling of MAZ stopped in 2015, but the assembling of MTZ tractors continues.8 Lukashenko met separately with Minister of Defense and Military Production of Egypt Sedki Sobhy.
As a result, in 2017 the export to Egypt compared with the previous year actually increased from USD 43,5 million to USD 76,1 million with a much lower import — USD 14,5 million and USD 21,3 million, respectively.
The visit of Lukashenko to Sudan was similar to the Egyptian one. Lukashenko underlined that Minsk does not listen to the 'world powers', which sounded eloquently in the light of the international tension around Sudan. Later, Minsk was visited by the delegation headed by the Chairman of the Sudanese
«Интервью Чрезвычайного и Полномочного Посла Республики Беларусь в Арабской Республике Египет С.Рачкова журналу «Конъюнктура рынков» (№ 7, декабрь 2016).» Министерство иностранных дел РБ. Dec. 2017. Web. 27 Mar. 2018. <http://mfa.gov.by/press/smi/ ada9a1be679dd496.html>.
Parliament Ibrahim Omer. Road maps of collaboration and agreement between 'Belarusnafta' and the Ministry of Oil and Gas were signed in Sudan.
Contacts with Sudan had little effect on economic relations. Export dropped from USD 34,3 million to USD 9,9 million, and import grew from USD 3,9 million to USD 12,1 million
Interactions with the countries of Sub-Saharan Africa were sporadic.
South Asia: breakthrough with Pakistan did not happen
Relations with Pakistan brought little benefit, despite the rapid development of relations with this country in the last three years, mutual opening of the embassies and a lot of contacts with two visits of President Lukashenko to Pakistan and the signing of more than 70 documents. On 1—5 February Belarus was visited by Mian Raza Rabbani, Chairman of the Senate of Pakistani Parliament.9
Realizing the limited capabilities of the Pakistani side, Minsk calls for cooperation with the third countries and joint implementation of large-scale projects, applying to 'the PakistanChina economic corridor'.10
The Belarusian government aims to achieve by 2020 in trade with Pakistan USD 1 billion, but this is an unrealistic figure. Even in 2017, after a wave of intense contacts, export grew only to $ 64,3 million (in 2016 it was USD 50,4 million).
On 11—12 September, President Lukashenko went to India, the country which is the traditional opponent of Pakistan. During this visit memorandums on cooperation in scientific-technical sphere, the oil and gas sector, etc. were signed. Furthermore, different kinds of agreements were signed by Belarusian Potash Company, 'Belzarubezhstroy', MTZ, 'Homselmash' and BelAZ.
«Беларусь и Пакистан намерены достичь товарооборота в 1 млрд долларов к 2020 году.» CTB. 2 Feb. 2017. Web. 27 Mar. 2018. <http:// www.ctv.by/belarus-i-pakistan-namereny-dostich-tovarooborota-v-1-mlrd-dollarov-k-2020-godu>.
«Андрей Кобяков встретился с Председателем сената парламента Пакистана.» Совет министров РБ. 2 Feb. 2017. Web. 27 Mar. 2018. <http://www.government.by/ru/content/7010>.
At the meeting with the Prime Minister of India Narendra Modi the Belarusian leader promised to facilitate the conclusion of free trade agreement between the EEU and India and proposed that India create in Belarus a scientific and technological industrial Park.
Export to India in 2017 compared with the previous year increased from USD 272,5 million to USD 308,1 mln, and import grew from USD 134,1 million to USD 147 million, a surplus remained.
Southeast Asia: are relations developing on their own?
On March 2 Belarus was visited by the Minister of Public Security of Vietnam General To Läm, and on 26—28 June the President of Vietnam Trän Dai Quang paid an official visit to Minsk. Vietnam is a traditional partner of Belarus in the region. During the negotiations Minsk proposed to increase supplies of engineering products and potash fertilizers as it was expected, but it also declared its willingness to increase purchases of Vietnamese products, particularly rubber and agricultural products.11
On 30 May — 1 June, Belarus was visited by a delegation from Thailand. During the talks the creation of a basic framework for the development of relations was discussed, which is still missing. Minsk called on Thai officials to re-examine adverse Thai tariffs for Belarusian goods.
In the case of Vietnam and Thailand, the lack of strong correlations between political measures is apparent. Vietnam is a longstanding partner of Belarus, Minsk created all opportunities for the development of cooperation with this country and between the officials of two countries there are a lot of contacts, but the trade with Vietnam is not much bigger than the trade of Belarus with Thailand, where there are no such favorable conditions.
In fact, exports to Vietnam in 2017 declined compared to the previous year from USD 76,7 million to USD 76,3 million, and
«Встреча с Президентом Социалистической Республики Вьетнам.» Совет министров РБ. 27 June 2017. Web. 27 Mar. 2018. <http://www. government.by/ru/content/7338>.
import increased from USD 44,2 million to USD 59 million. In these years the exports with Thailand dropped from USD 54,1 million to USD 50,8 million, and import increased from USD 34,7 million to USD 38,4 million.
Latin America: an almost lost direction
Latin America remained on the margins of Belarusian foreign policy. Minsk could not overcome the crisis in relations with the region, which began as a result of the decline of the partnership with Venezuela after the aggravation of the situation in the country. Even V. Sheiman, who is close to the Belarusian leader and who has long been engaged in relations with Latin America, recently has switched to promoting relations with Africa.
Conclusion
The Belarusian government pursues its policy in relation to developing countries with lesser efforts. This does not mean a lack of interest in this area, because with the modesty of the results achieved in cooperation with most of the individual countries, in general, the interaction with them gives the opportunity to offset the negative balance, to cover markets and other problems in other areas. Anyway, Minsk reduced the number and the level of visits in 2017.
The exception is China. Minsk conducts a separate, strategically-oriented policy in regard to this country, which is based on ignoring difficulties in the shorter term for the expected benefits in the longer term.
As acknowledged by Belarusian officials, Belarus cannot work for each country separately. So it needs to focus on specific countries in each region, which will help it to enter the regional market. This policy, a kind of economic bandwagoning, seems to be one of the models of the Belarusian ways to enter the developing world.
A critical re-evaluation and more flexible approaches will be expanded in Belarusian policy regarding the developing world. Official contacts are expected to stay at a fairly reserved level in comparison with those before the mid-2010s.
