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BELARUS AND DEVELOPING COUNTRIES: POTASSIUM, OIL AND TRACTORS
Siarhei Bohdan
Summary
Belarus' relations with developing countries always had a pragmatic character. The official Minsk steered clear of ideological projects, offering purely verbal support of the Libyan and Syrian regimes and pursuing law-abiding policies in military and technical cooperation in conformity with international legislation. Belarus' main objective in the developing world was to increase the number of partners. The difficult economic situation - a huge trade deficit - was another powerful argument in this situation. Furthermore, global developments forced Minsk to refuse contacts with a number of Arab countries, including Iran.
Trends:
• A number of Belarus' long-standing partners - Libya, Syria, and Egypt - de facto ceased to be on the list of Belarusian foreign policy objectives.
• Its main partners were mainly China, Arab countries of the Persian Gulf, Venezuela and Iran.
• With respect to the economy, cooperation with developing countries remained unchanged - app. 10% of Belarus' export. Structurally, potash and nitrogen fertilizers were leading items in the Belarusian export, with chemical, mechanical engineering products and other goods far behind. This very persistent situation is a hindrance to overcoming the trade deficit, which could be done by increased delivery into developing countries.
China. It is very doubtful that Belarus be of any great significance in China's foreign policy, despite all pretence on the Belarusian side. Chinese President Hu Jintao conspicuously ignored Belarus during his summer 2011 visit to Kazakhstan, Russia, and Ukraine. Belarusian contacts with the PRC are on the level of departmental and organizational heads interested in cooperation, and not on the higher political level, compared to other developing countries.
In March 2011, Vice President of AVIC International (part of China Aviation Industry Corporation — AVIC) Jiang Wei visited Belarus. In June, a delegation of Great Wall Corp (satellite launch and delivery) was received personally by the President.
Belarusian officials consider PRC to be a kind of a state building model, an alternative to those of the West. Facing a financial
crisis, President Lukashenko invited a panel of experts from the People's Bank of China headed by Xie Duo, director of Financial Market Department, hoping that they would suggest solutions to the crisis different from those of the IMF and thus more acceptable for him. Ex-ambassador to the PRC and incumbent Deputy Prime Minister Anatoly Tozik keeps publicizing Chinese methods of approaching issues — from secondary education to Chinese construction norms.
Belarusian authorities are pinning high hopes on China as an investor. China's role and that of other developing countries is growing more significant as relations with the West are worsening and Russia is gaining more and more control over the Belarusian economy. Nevertheless, experts point out that "China is an active creditor but a reluctant investor into Belarus"1.
In September, Belarus received a USD 1 bln credit to buy Chinese goods, but its conditions for Belarus, lack of finances, are highly advantageous. When Wu Bangguo, Chairman and Party secretary of the Standing Committee of the National People's Congress of China, visited Belarus an agreement was signed on Chinese participation in privatization and establishment of a Chinese-Belarusian industrial park. This will include household appliances and electronic, mechanical engineering and biomedicine productions.
In 2011, bilateral trade grew by 31% and reached more than USD 3 bln. The trade deficit increased by 27% and reached USD 1.617 mln. The key export items were potash fertilizers (44% of total export) and caprolactam (25%).
India. A number of objective reasons — differences in foreign policy and ideology, economic structure — Belarusian-Indian relations are far less intensive than those with China. Despite this, India is a significant direction of Belarusian foreign policy.
In early August India officially expressed its interest in acquiring a stake in Belaruskali2. On 26 — 27 August Belarus hosted an official delegation from India headed by Sanjay Singh, Secretary
Dmitry Zayats. Minsk expects Beijing to invest but China is ready only for credits // Naviny.by. http://news.tut.by/economics/252625.html Siarhiej Gezgala. Realny pakupnik. Indyja aficyjna vykazala zacikaulenasc u akcyhach Belaruskalija ('A potential buyer. India officially announced its interest in a Belaruskali stake') // Nasha Niva: http://nn.by/
?c = ar&i = 58321
(East) of the Foreign Ministry and former fertilizer secretary Sutanu Behuria. The Indian press wrote about the possibility of acquiring a 20% stake in Belaruskali. The decision was made on 10 August at the government meeting chaired by Prime Minister Manmohan Singh. Anonymous sources in the Indian authorities name overvaluing (USD 30 bln) to be the biggest stumbling block. At the same time, "while the August visit did not result in any concrete step towards India acquiring a stake in Belaruskali, the officials said Belarus had agreed to give India the first right of refusal if and when it decided to sell a stake in the company"3.
Middle East
Iran. In February, ambassador of Iran announced that his country is implementing projects totalling USD 1.5 bln and negotiating some more in total of over USD 1 bln. He mentioned constructing EUR 250 mln worth Magnit-Minsk complex and a logistics centre in the free economic zone "Minsk". Projects with Iran are widely publicized at the planning stage but few develop any further, so we should be cautious about the ballyhoo. The bulk of Iranian (Chinese and some other) investment projects are low-tech or "dirty" industry. For example, Iranian businessmen intend to start wire production in Renyca (Rechitsa), to extract crushed-stone and to build a cement plant.
The ambassador also mentioned car assembly, but on 15 February 2011 First Deputy Prime Minister Vladimir Semashko announced that the government intends to refuse Iranian car assembly: "We are very dissatisfied with this production. Only 5 000 cars have been sold over 5 years".
On 2 — 4 March Minister of Justice Viktor Golovanov visited Iran. He held talks with the Minister of Justice Morteza Bakhtiari and met the head of the judicial system of Iran Sadeq Larijani and Chairperson of the Parliament Ali Larijani. An extradition treaty was signed during this visit, but the ratification practice between Iran and Belarus shows that it is unlikely to come into force soon.
After the USA introduced sanctions against Belarusian companies doing business with Iran, in early June the president of Iran
Aman Malik. India, Belarus may ink non-disclosure pact // Livemint.com of 14 February 2012: http://www.livemint.com/2012/02/14000657/India-Belarus-may-ink-nondis.html?h = B
made a statement warning of "plots by Western powers to bring free nations to their knees" and highlighted the significance of sustainable political and economic relations between Iran and "independent and anti-arrogance countries"4 such as Venezuela, Ecuador and Belarus5.
In August, Belorusneft oil company withdrew from Jofeir oil production project and the Iranian oil sector altogether. Iran made a statement that Belorusneft failed to meet the treaty's conditions and the extracted volume was lower than had been agreed on6. Some Belarusian media suppose that the reasons for Belorusneft to give up on Jofeir were the sanctions the United States slapped on the Belarusian oil producer for cooperating with Iran.
This project is quite mysterious. The officials stated that daily extraction volume did not exceed 2 800 barrels per day against the stipulated 3 5007. At the same time, according to the Iranian ambassador's statement in February, the daily extraction at Jofeir totaled 15 000 barrels and was about to double. Moreover, when the project was closing, the National Iranian Oil Company was preparing to open an office in Minsk. The official Belarusian media did not cover the project's closure.
In early October, the National Bank Chairperson Nadezhda Yermakova announced Belarus' intention of drawing in loans from Iran of USD 400 mln in total. But the loan details and the history of Belarusian-Iranian relations render this highly improbable.
Qatar. On 17 — 19 May 2011 Deputy Foreign Minister Sergei Aleinik visited Qatar, president Lukashenko paid an official visit on 15—16 August. The countries have had close relations since 2007. The 2011 president's visit differed from his first one in 2001: it was solely to Qatar, despite the usual practice of visiting other countries of the region. Active relations with Qatar, which openly supported the uprising in Libya, testified to pragmatism of the Belaru-sian policy and revealed the lip service nature of the support for Gaddafi.
A large package of documents was signed during this visit. Qatar was offered a number of projects, inclusive of a complex fertilizers
4 Iran warns of West plots against nations // Press TV. Jun 9, 2011 http:// edition.presstv.ir/detail/183864.html.
5 Ibid.
6 http://www.svaboda.org/content/article/24299296.html
7 Ibid.
production, a multifunctional sports and hotel centre, a joint enterprise for potash ore extraction (or a stake in Belaruskali — as other sources indicate), several trading and logistics centers, etc.
In October, a Qatar delegation headed by Sheikh Abdullah bin Nasser bin Khalifa Al Thani, Minister of Interior, came on a working visit to Belarus to further cooperation. Belarus' relations with Arab countries have a significant sector in enforcement departments, i.e. defense and security. Viktor Lukashenko, the president's son, plays a significant role in them.
Oman. On 4 — 7 May, an Omani delegation headed by Foreign Ministry's Under-Secretary for Diplomatic Affairs Sheikh Ahmed bin Yusuf al Harthy visited Belarus for consultations. On 24 — 25 May, Omani Minister of Defense HE Sayyid Badr bin Saud al-Busaidi came to Belarus. Omani media reported that he was received by "Viktor Lukashenko, Vice-President of Belarus for National Security Affairs and Police". During the meetings, the sides discussed matters of cooperation.8 The visit took place at the same time with a military exhibition in Minsk, but it is not clear whether this was a mere coincidence or still not. Oman has a relatively well-developed economy and maintains a disproportionally large army, which ensures cooperation in defense and interior affairs.
Turkey. On 17 May 2011, foreign ministries of Belarus and Turkey had a regular round of deputy minister level talks. This level of contacts is basic for Belarus-Turkey relations, until now minister level visits have been a rare occasion. Before advent of Islamists, Ankara's contacts with Belarus were in unison with the EU's policy and thus minimal.
On 2 — 3 November Belarus hosted Ertugrul Gunay, Minister of Culture and Tourism of Turkey. He signed documents on cooperative production of 5 000 Belarusian tractors until 2015. In summer, De Textile won a tender for worsted fabrics production project on Minsk JSC Kamvol, which might be up to USD 200 mln worth.
In 2011, bilateral trade reached USD 447.7 mln (122.9% growth to 2010) with trade deficit of USD 318.7 mln9. Over the last 5 years, bilateral trade has increased more than five times. In early Decem-
Ibrahim Al Amri. Badr meets vice-president for security affairs of Belarus // Oman Tribune: http://www.omantribune.com/index.php?page = news&id = 92393&heading = Oman.
Trade and economic relations. Ministry of Foreign Affairs of Belarus; see http://turkey.mfa.gov.by/rus/belbelg/trade/
ber, the Turkish ambassador was very optimistic about the opportunities for Turkish businessmen in Belarus: "the main reason why Turkish businessmen are hesitant about investing into Belarus is their fear to lose against Russians, but they are wrong about it"10.
Latin America
Cuba. On 21—23 February, 2011 a Cuban delegation headed by Foreign Minister Bruno Rodriguez Parrilla came to Belarus. The minister was received by president Lukashenko who declared that "Cuba is our key partner in Central and Latin America".
Cuba and Belarus have been partners since Soviet times. In 2011, bilateral trade reached record USD 50.2 mln, Belarusian export being USD 34.1 mln, which is a significant increase compared to 2010 only USD 7.4 mln.
Venezuela. In late March, UNIAN news agency reported that Belarus renounced Venezuelan oil deliveries due to more advantageous Russian offers. Belarusian officials refuted this information, and deliveries, especially within the scheme of exchange for Azerbaijani oil, continued. In contrast to Iran, Venezuela is Belarus' partner in developing successful projects of oil extraction and country modernization.
On 26 — 30 April First Deputy Prime-Minister Vladimir Semash-ko paid a working visit to Venezuela. On 27 September — 3 October a Belarusian delegation headed by the Presidential Aide for Special Commissions Viktor Sheiman visited Venezuela, with sittings of the Belarusian-Venezuelan High-Level Commission. The results of the visit were new joint projects with Belarusian Steelworks and construction of a gas pipeline in Venezuela. Mr. She-iman pointed out "in 2006 bilateral trade was only USD 5 mln. This year [2011] it must reach USD 2 bln"11.
In early October Belorusneft announced that in 2012 the Vene-zuelan-Belarusian joint venture plans to increasing oil extraction up to 1.5 mln tons by enlarging the number of extraction sites — up to 9 oilfields12. In 2010 PetroleraBeloVenesolana extracted 741
Mustafa Edib Yilmaz. Turkey-Belarus relations: Where are they headed? //
Sunday's Zaman. 18 December: http://www.todayszaman.com/news-266014-
turkey-belarus-relations-where-are-they-headed.html. http://news.tut.by/economics/252881.html. http://news.tut.by/economics/253414.html.
tons oil, whereas in 2011 the amount was presumably 1.1 mln tons. Belarus intends to develop oil fields in Venezuela conjointly with Venezuela itself and China13. The most probable reason for it is lack of investments in Belarus. The same issue was topical for the oil extraction project in Iran in 2006 — 2007.
On 8—13 May 2011, an official delegation headed by Deputy Foreign Minister Sergei Aleinik paid a working visit to Colombia and Ecuador. In January-August bilateral trade with Colombia reached USD 78.6 mln, with Belarusian exports being USD 73 mln14. Relations with Ecuador might have been established thanks to President Chavez' assistance, who has good relations with the left-wing government of this country. In January-August bilateral trade with Ecuador reached USD 31.3 mln, with Belarusian exports being USD 11.7 mln15. Being one of the remotest countries from Belarus, Ecuador presents an ambiguous partnership.
But cooperation developed and on 9—11 October a Colombian delegation headed by Deputy Foreign Minister Patti Londono Jaramillo visited Belarus. On 16—18 October, Belarus received an Ecuadoran official delegation led by the Minister of Foreign Affairs, Trade and Integration Ricardo Patino Aroca.
In June, Brazil opened its embassy in Minsk. This country is one of key trade partners of Belarus. In 2008, bilateral trade reached record USD 1.229 bln, Belarusian export being USD 1.074 mln. However, in subsequent years trade decreased, totaling USD 862.6 mln in 2010. The main export item is potash fertilizers.
Other countries
Burma. Contacts with Burma have become more active over the last few years due to Belarus' interest in new partners. However, Belarus has difficulties with offering goods and services that might evoke interest of Burma, as well as with fulfilling contracts and paying them. On 1—3 December, the first official governmental delegation headed by Prime Minister Mikhail Myasnikovich arrived to Burma. During the talks, a number of agreements on cooperation were signed.
Belarus, China to join oil deposit project in Venezuela // Xinhua: http://
english.peopledaily.com.cn/90883/7610633.html.
http://www.mfa.gov.by/press/news_mfa/d0b054dd0972b7d0.html. http://www.mfa.gov.by/press/news_mfa/e132adbfc17a89a6.html.
Vietnam. In February, a Ministry of Defense delegation led by head of the General Directorate of Ideological Work Alexander Gur visited Vietnam. On 28 November — 1 December a government delegation headed by Prime Minister Myasnikovich payed an official visit to this country. Since Soviet times Vietnam has been Belarus' trading partner and this cooperation has always remained stable. Over the last five years, bilateral trade has more than tripled and by late 2011, it must have reached USD 300 mln, with a stable trade surplus for Belarus.
Indonesia. The third sitting of the Intergovernmental Belaru-sian-Indonesian commission on trade, economic, scientific and technical cooperation in Minsk on 15 September was co-chaired by the Deputy Minister of Foreign Affairs of Indonesia, Ms. Retno Marsu-di. Together with opening a Belarusian embassy in Indonesia in August, this visit was another step towards building cooperation. Relations with Jakarta became considerable only in 2009. Bilateral trade in 2010 reached USD 170 mln, and USD 130 mln was the result of the first seven months of 2011.
Zimbabwe. On 7 — 9 April Vice-President of Zimbabwe John Nkomo visited Belarus16. Taking into account the complicated economic situation and the risk of doing business in Zimbabwe, prospects for cooperation in the near future are rather vague. This visit had a rather ostentatious anti-Western character, one of the many that the Belarusian side took after the elections, the more so as J. Nkomo is an influential figure of the Zimbabwean regime denied entry to the USA.
Ghana may become a new partner of Belarus in Africa. On 8 — 13 November the Presidential Aide for Special Commissions V. Sheiman visited this country with a delegation of «sponsors» from Belarus, Russia, and Poland. Sheiman headed the delegation17, which testifies that the Belarusian side would like to exploit the format of multilateral cooperation with African countries.
The officially stated objective of Belarus is to establish cooperative institutions and deliver fertilizers and agricultural machinery to Ghana. Belarus also offers to build a service centre for maintaining helicopters Mi-17 "Hip" for the entire Africa. It was Sheiman's third visit to Ghana as a member of such delegations.
http://www.government.gov.by/be/content/3709.
http://www.ghananewsagency.org/details/Social/10-member-delegation-of-investors-in-Ghana/?ci = 4&ai = 35346.
Conclusion
The results of the year allow us to state that relations with developing countries took a rational and efficient turn. The ideological factor is minimal in them, that is why Belarus easily switches from contacts with Chavez over to establishing relations with his Colombian enemies, from being friends with Gaddafi over to cooperating with his sworn enemy — the emir of Qatar. Relations are being logically diversified, which is proven by missions being opened in Indonesia and Nigeria, the Belarusian delegation visiting Morocco, and an attempt to re-establish relations with Iraq and re-opening the Iraqi embassy. It is highly probable that Minsk made a pragmatic decision to renounce the oil project in Iran on realizing the consequences of the US sanctions.
Belarus cannot ignore the developing countries, which, in their turn, cannot fully substitute other directions of cooperation. The Belarusian officials acknowledged that the Venezuelan oil helped Minsk to bargain for better conditions of Russian oil deliveries. But Russia and other neighboring countries will undoubtedly be more significant for Belarus than the developing countries.
