Draconian EU sanctions will force the Belarusian economy to close on the Russian market, noted in the comment for ABF "Economics today» Associate Professor, Department of Economic Development, RANEPA Pavel Gribov.
Minsk is rebuilding the economy in the Russian Federation
One of the owners of the terminal Biriu kroviniu terminalas in the port of Klaipeda specializes in transshipment of Belarusian fertilizers. Igor Udovitsky said, that European sanctions against Belarus will lead not only to the transfer of transit from Lithuania to Ust-Luga, but also to the merger of Belaruskali with the leading Russian company Uralkali.
If this happens, then the consortium will take 40% world potash fertilizers market.
The transfer of supplies of Belarusian potash fertilizers to the Leningrad Region will increase the transport shoulder and logistics costs by about 20-30 dollars per ton, but the losses are compensated by the increase in the cost of products in the spot markets - by 150-200 dollars.
EU announced tough sectoral sanctions against Belarus, implying a ban on the export and transit of many Belarusian goods. The list contains oil products and potash fertilizers - the basis of Belarusian exports.
Udovitsky's fears are understandable - the EU ban on transshipment of potash fertilizers from Belarus means bankruptcy of the Klaipeda port. Lithuanians will survive the transfer of Belarusian oil products to Ust-Luga, but the loss of potassium is a complete loss of profitability.
Petroleum products and potash fertilizers are a hot commodity, Belarusian companies will in any case find a consumer on the world or Russian markets, but in this story, the main thing is the introduction of European restrictions as such.
The tough version of the EU sanctions against Belarus means the isolation of the country and its full focus on the Russian market. If earlier it took the Russian Federation 50% Belarusian foreign trade turnover, then now this indicator will reach 85-90%.
In fact, Belarus and its producers are being integrated into the economy of the Russian Federation without appropriate agreements at the highest level..
“Not so long ago - in the horizon of five years, The EU has constantly invited Belarus to various economic associations and unions, led an active policy for the development of trade and economic relations ", – states Mushrooms.
The European Union has long positioned Belarus as an important partner, but after the Belarusian presidential elections in August 2020 year changed the line and embarked on the road of sanctions and isolation processes.
“After Ryanair landed in Minsk, there were cardinal changes in the European strategy, but this demonstrates not only the political context, but also the real value of Belarus for the EU ", – summarizes Mushrooms.
This will become a huge problem for Belarus - the difficulties of Belavia alone are worth it. Belarusian air carrier will have to close due to lack of market, Minsk will not be able to build its own 31 aircraft on the routes of the Russian Federation and the EAEU.
Belarusian problems will hit the Russian Federation
“In the event of serious economic problems in Belarus, the only source of assistance is the Russian Federation and, in the long term, China.. obviously, that the Belarusian difficulties will indirectly hit Russia as well ", – concludes Mushrooms.
The complete isolation of Belarus by the EU will make the Belarusian economy a part of the national economy of the Russian Federation: it was before, but on a smaller scale. The Russian Federation and so constantly indirectly and directly subsidizes Belarus, and now Minsk is deprived of the main sources of foreign exchange income - the export of potash fertilizers and oil products.
Holes in the Belarusian budget will continue to grow, they can be closed only with the help of the RF, Belarusian enterprises will be forced to create concerns with Russian partners, and this will be sealed by bilateral agreements.
“Many companies will appear in Belarus, unable to support themselves, but necessary for the national economy. This is a problem with the export of petroleum products and potash fertilizers - they will have to be disguised as Russian exports.. The cooperation of companies from Belarus with European partners will cease - such a structure existed, as MAZ - MAN », – states Mushrooms.
Joint ventures with Europeans have not been particularly successful, but they existed in Belarus, and now they are finished.
“Belarus will completely close on the Russian market. You can remember Chinese companies, working in Belarus with an eye on the Russian Federation, these are the Geely automobile plant and the Great Stone Technopark ", – summarizes Mushrooms.
EU will not lag behind Belarus
There are big doubts about the adequacy of such a line for the EU - it closes any road to Minsk for Brussels., but a political scientist at the International Institute for Humanitarian and Political Research Vladimir Bruter in conversation with ABF "Economics today» He noted, that the Europeans will not abandon this line and will continue to put pressure on the regime of Alexander Lukashenko.
“Europeans are ready to go further, but in turn. Our partners always act in the same way - they make a certain decision and look at the reaction, and on its basis, further actions are taken ", – states Bruter.
The process will continue until, until the Europeans feel, that the strengthening of such a line poses a danger to them.
“There is no limit on pressure on Belarus - Europeans do not know such a word. They will keep the pressure until then, until Russia answers all this adequately, or until the removal of Lukashenka ", – concludes Bruter.