Foreign Trade Balance in 2012 was Unable to Remain Positive
The National Statistics Committee data showed, the 2012 trade in goods balance was minus USD 412.7 million.
In Q4 of 2012 the foreign trade situation deteriorated due to the termination of petroleum products “controversial” export schemes and to the lack of potash contracts. Active modernization increases the investment imports volumes. In the near future Belarus can only hope for a favorable international market situation with potash fertilizers.
In the first 9 months of 2012 the trade surplus was USD 1 369.8 million. By year-end the balance was minus USD 412.7 million. In Q4 of 2012 all the international trade gains were lost. The main reason was the suspension of solvent schemes and termination of biodiesel exports in November 2012. An additional negative factor was the lack of potash fertilizers contracts with India and China, which resulted in potassium chloride decreased exports to USD 460 million in Q4 2012, which is USD 320 million less than in the same period of 2011.
Enterprises’ modernization has resulted in the increased investment imports. Active dairy-farms construction required equipment imports. Power generating facilities in Belarus need to be modernized, but it leads to increased equipment imports from China because of the related Chinese loans. The efficiency of equipment imports is questionable, since there are no qualitative improvements in foreign trade in terms of natural gas and electricity imports.
In 2013, Belarus will face increased competition in the Russian market for the majority of the supplied goods, foodstuffs in particular, due to Russia’s WTO accession. Belarus is incapable to increase oil exports substantially because of the Belarusian refineries’ existing capacity. Therefore, potash fertilizers are the only export item, which could have a meaningful impact on international trade balance.
In 2013, Belarus’ performance is not likely to repeat the 2012 success without innovative schemes. Stirring up modernization in the long run may improve international trade results, but in 2013 it may cause an increase in imports amid falling exports of Belarusian goods. Only potash fertilizers can improve the negative situation in the international trade, but still unable to entirely compensate for the solvent schemes’ suspension.
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.