Belarus seeks its fortune in Ukraine. How Russia may benefit

Story was part of Belsat TV show Prasviet (World and Us)

While Belarus and Ukraine intend to increase their bilateral trade and economic cooperation, there are other goods hidden in official statistics aimed at satisfying very specific needs of the Ukrainian army. Curiously, such Belarusian multi-vectorism may be beneficial to the Kremlin. Hanna Liubakova reports.

At Made in Belarus expo, the largest forum of Belarusian producers in Ukraine in recent years, more than 50 Belarusian companies displayed their latest products and technologies seeking closer cooperation with Kyiv.

Meet a new, shiny, red-liveried tractor Belarus, the legendary brand know around the world for its simple and robust farm vehicles. There are, however, many other products that are made in Belarus and are popular in Ukraine, as mentions one of the visitors of the Made in Belarus exhibition in Kyiv.

“Textiles, clothes, machines, and, oh well, refrigerators Minsk,” he says.

The range of imports from Belarus is likely to be expanded in Ukraine. Minsk aims to raise mutual trade to $6 billion, an increase of $1.5 billion over last year.

“As there is the EU-Ukraine Association Agreement on one hand, and Belarus is a member of the Eurasian Economic Union, we need to use an opportunity to integrate both blocs and help each other deliver goods to these markets,” says the Ambassador Extraordinary and Plenipotentiary of Belarus to Ukraine Igor Sokol who attended the exhibition.

Gaining momentum

Ukraine is Belarus’ third largest trading partner, right after Russia and the European Union. After hitting a record high in 2012, Belarus’ exports to Ukraine has sharply declined since the war in Donbas unfolded. The growth in trade resumed in 2016 (up to $2.8 billion) and accelerated in 2017 (up to $3.4 billion). It is noteworthy that even though bilateral trade balance is negative for Ukraine, the country reaps benefits of it.

“While Belarus is gaining an opportune moment for additional revenues to the budget, Ukraine strengthens a safety factor; if the Ukrainian market is profitable for Belarus, the latter won’t refuse cooperation with Kyiv, even under Russian pressure,” says Igor Tyshkevich, an analyst at the Ukrainian Institute of the Future.

For Belarus, however, this may be a safety factor as well, given the recent ban on imports of milk and dairy products from Belarus to Russia that was announced in February by Russia’s agricultural and food sector regulator, Rosselkhoznadzor. As a result of these trade wars, Belarus president Alyaksandr Lukashenka demanded to “hunt” for other markets. According to him, “if Russia fails to understand us and does not want to understand, if they keep making us toe the line for no matter what, we will seek our fortune in some other places.”

Russia has a significant concern about the growing contraband trade in Belarus, accusing the country of mislabelling European food products as Belarusian, despite the Russian food embargo from the EU.

According to Tyshkevich, Belarus uses Ukrainian food products for re-export purposes, too.

“Between 2014-2015 Belarus significantly increased its import of certain Ukrainian foodstuffs. Curiously enough, the volumes of food sales to the Russian market increased to the same extent,” says Igor Tyshkevich.

Rearming Ukraine?

Apparently, the large categories of re-exported Ukrainian food are not the only opportunity Belarus is using to benefit from the war in Donbas. There is no official data on the military-technical cooperation between Ukraine and Belarus, while many of goods exported to Ukraine are hidden in official statistics under the “other” category. Moreover, as it was recently stated, Belarus has decreased its military cooperation with Ukraine due to the status of Minsk as a platform for peaceful negotiations in Minsk. Well, at least officially.

Belarusian military industrial firms have cooperated with their Ukrainian counterparts for years. They successfully created new joint products such as the Skif Anti-Tank Guided Missile (ATGM) and specialised in the repair of helicopters.

Since 2014, the number of such projects has significantly decreased, some experts confirm. Nevertheless, trade is going on; despite all statements and potential Moscow’s pressure, Minsk still supplies dual-use goods to Ukraine. For example, it sells fuel to Kyiv, which can be used by both civil and military aviation.

“Moreover, Belarusian exports also include some ready-to-use military equipment, such as the Minsk Truck Plant’s (MAZ) chassis for Ukraine’s missile and artillery systems. They are used to produce wheeled armoured fighting vehicles and, among others, armoured cars “Warta” that are now largely in Donbas,” says Andrei Parotnikau, the founder and the coordinator of the analytical project Belarus Security Blog.

Benefitting the neighbours

Belarus has not forgotten about the Russian market either. As closest Russian political ally and member of the Collective Security Treaty Organisation, a Russian-led military alliance, Belarus cooperates with the Russian defense industry. This, again, connects the Ukrainian and Russian markets, although both countries cut off sales of many components of defence industry after the war in Donbas started.

“We can say that both Moscow and Kyiv do not mind having an intermediary for some sorts of technical cooperation. After all, for many Ukrainian enterprises in the defense industry, the Russian market is either the main one, or even the only one,” says Parotnikau.

The benefits for Belarus are obvious. Both Russia and Ukraine are gradually reducing imports of strategically important armaments and equipment, but yet neither country managed to establish itself as a self-sufficient state. Lukashenka, as usual, successfully plays off other countries for his own advantage in the economic, political and military sphere.

Hanna Liubakova

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