Lithuanian Railways’ first EU funded train is launching on the Vilnius-Minsk-Vilnius route in May. Ancient Vilnya (as it was called when Belarusians and Lithuanians shared the Grand Duchy of Lithuania) is not only the closest European capital to Minsk but almost a ‘suburb’, which can be reached by electric train. Two such high-speed trains are to run between the capitals of Lithuania and Belarus and no one doubts the benefits or popularity of the route.That Belarus and Lithuania are ‘accelerating’ towards each other was clearly demonstrated at the Belarusian-Lithuanian Economic Forum, held in Klaipeda, Lithuania, at the end of April. Meanwhile, our countries’ participation in major integration associations (Lithuania in the EU and Belarus in the Customs Union with Russia and Kazakhstan) provides additional incentives and opportunities.
Business community dialogue between Belarus and Lithuania at the Klaipeda forum is surely a prologue to wider Belarusian-European dialogue. Everything is moving towards ‘integration’ on the Eurasian continent: a strategy suggested by the President of Belarus, Alexander Lukashenko. Of course, not everything is simple, but intensified contacts are vital to establish an atmosphere of trust. To achieve this, we need to move forward seriously in normalising Belarusian-European relations. Political dictates and sanctions must become a thing of the past.
The first step in this direction has already been taken, as the Prime Minister of the Republic of Lithuania, Algirdas Butkevičius, noted at the forum, saying, “Lithuania’s presidency over the EU this year is a good opportunity to update relations between the EU and Belarus. Lithuania is ready to assist Belarus in this path.”
This important statement is certainly the result of impressive progress in the economic co-operation of our two countries. Business projects and contacts on both sides are intertwined, so that politicians have no choice but to follow the footsteps of our mutual business interests, which are in the public interest, intensifying contacts in various fields.
As to the Lithuanian business community’s influence on national foreign policy towards Belarus, the Lithuanian Prime Minister notes, “Lithuania and Belarus lived for centuries as one state, sharing a neighbourhood and common historical and cultural heritage; this is the basis for close co-operation between Lithuanians and Belarusians. Lithuania, of course, has always been interested in developing stable, friendly and good-neighbourly relations with a democratic and prosperous Belarus, based on principles of good faith and mutual benefit. We have no choice but to co-operate, developing trade and contacts in every sphere — including trade, investment and culture. Lithuanians and Belarusians are hardworking people and our potential for co-operation is not yet exhausted. I believe that Belarus, like Lithuania, is an integral part of Europe. However, it is no secret that, over the past few years, relations between Belarus and the European Union have undergone tough times. It inspires me that Prime Minister Mikhail Myasnikovich emphasises Belarus’ interest in deeper co-operation with the EU. Some important steps have already been taken in this direction and we hope to see Belarus take more, opening the way to full-scale resumption of dialogue
between the EU and Belarus.”
Clearly, it’s a two-way process but certain economic conditions are inspiring the Lithuanian PM’s positive mood. Mr. Butkevičius comments that, after Lithuania’s accession to the EU, exports of Lithuanian goods into Belarus quadrupled, indicating shrinking economic growth in Europe. Only Germany, the most powerful EU country, with huge industrial potential, and little Lithuania have shown export growth; the latter primarily due to flexible policies and its good transit potential.
According to Mr. Butkevičius, Belarus is a vital partner of the Republic of Lithuania in the economic sphere, being the sixth most important market for Lithuanian businesses. Lithuania is also the third largest investor in our country, making us strategic partners.
Klaipeda — Sea Gates of Belarus
At the centre of this strategic partnership is, undoubtedly, the port of Klaipeda: the northernmost ice-free port of the Baltic Sea. It is also the largest transport hub of Lithuania, connecting sea and land routes and providing the main shipping lines to ports in Western Europe, Southeast Asia and the American continent.
Port activity generates 4.5 percent of Lithuanian GDP and 23,000 jobs, while a third of transhipped cargo is of Belarusian origin. In particular, Belarus exported 5.7m tonnes of potash, 2m tonnes of fuel oil and 880,000 tonnes of nitrogen fertilisers through Klaipeda last year. In future, Belarus could double these cargo volumes, as Belarusian PM Mikhail Myasnikovich announced at the forum in Klaipeda. The transport and logistics sector is the strongest in Lithuania, positively affecting the welfare of the whole country, so it’s a strategic move.
A landmark moment for Klaipeda was a message from the Belarusian PM that the biggest Belarusian exporter, Belaruskali, has purchased a 30 percent share in one of the largest terminals in Klaipeda — at a cost of $30m. Used to ship potash, the terminal is the first Belarusian investment in the port and the largest by a Belarusian enterprise within the EU. Major Belarusian company Grodno Azot is also negotiating with the port of Klaipeda, to create a joint cargo handling venture. Clearly, Belarus has serious, long-term plans for co-operation in the field of transport and logistics. Our Lithuanian partners are guaranteed to benefit.
Integration in all directions
Belarusian-Lithuanian relations are unique not only in their geo-graphical location and unusual extent of human intimacy but regarding their similarity of economic interests. Speaking at the forum, Mr. Myasnikovich named areas where business integration could make a special contribution to economic growth.
Our two countries have entered a stage of active investment partnership. In 2012, Lithuanian investments into Belarus reached $173m: up on 2011 by 1.5 times. Various innovation projects are underway and Lithuania has good experience in the fields of information technology and medicine — especially oncology, cardiology and biotechnology. Belarus’ new national scientific and technological park — BelBiograd — is focusing on pharmacology, microbiology, biotechnology and nanotechnologies. In all, Belarus has launched 30 new innovative productions. As our two countries share similar scientific priorities, this invites further co-operation for the coming 20-30 years.
Liaisons in the financial sector look quite promising, since Belarus is developing its system of international financial leasing and international lending. Lithuania has experience in this area and our mutual industrial and agro-industrial co-operation is closely related to financial co-operation.
The Prime Minister of Belarus stresses that we should not oppose the integration of Western and Eastern Europe. The Common Economic Space (CES) of Belarus, Russia and Kazakhstan is not an alternative to the EU, since Belarus enjoys almost the same turnover with each (actually slightly more with the EU). Our country will promote economic integration in both directions.
The Deputy Foreign Minister of Belarus, Alexander Guryanov, noted at the Belarusian-Lithuanian Economic Forum, “Our processes of integration with Russia and Kazakhstan should not be viewed as a desire to separate from our Western partners. The Customs Union is a new opportunity, including for our Western partners. Lithuanian businesses should benefit from Belarus’ integration with Russia and Kazakhstan, as the first phase of the Customs Union forms a common customs regime with third countries, as well as bringing single customs clearance. Since 2012, the CES has been enabling investment co-operation across our common space of ‘three’; now, the Lithuanian border is the border of the Customs Union, with Belarus acting as a western gate to a market of 180 million consumers.”
Conducting business interestsThe Belarusian PM especially thanked Sigitas Paulauskas, the Chairman of the Board of VMG (Vakaru Medienos Grupe), for his company’s particularly successful investment co-operation with Belarusian partners. The President of Belarus’ Business Council for Trade and Economic Co-operation with Lithuania, the First Deputy Chairman of the Board of BPS-Sberbank, Vladimir Koleda, added, “Eighteen months ago, the Ambassador of the Republic of Belarus to Lithuania, Vladimir Drazhin, introduced me to some bright representatives of Lithuanian business: Sigitas Paulauskas and Vidmantas Kučinskas. They are involved in the hospitality industry, own assets in the timber industry, and produce compound fertilisers, sugar and processed turkey meat. We began by recognising our mutual interests and how we could help one another; the main message we received was the need for risk-sharing.”
Arvi’s President, Mr. Kučinskas, emphasises that he is ready to organise production and processing of turkey meat in Belarus, if a reliable partner can be found. BPS-Sberbank has stepped forward to share some of the financial risk, giving a loan to set up industrial production of turkey meat. With a capacity of 5,000 tonnes per year, the complex plans to breed poultry and then process the meat to various degrees, to create a range of products.
Another good example of effective co-operation with Lithuanian business is VMG’s purchase of shares in Borisov’s Svuds Export, whose goods are fully exported and where 180 people are employed. There are too many projects to list individually but Belarusian banks are encouraging further investments from Lithuania, being willing to share financial risk where proposals look feasible and cost-effective. BPS-Sberbank is ready to provide up to $300m for projects involving Lithuanian capital in our country. Meanwhile, Belarus is working with Sberbank of Russia, which is present in Kazakhstan, Ukraine, nine European countries (including Germany), Turkey, India and China. Belarus can provide support to Lithuanian businesses through BPS-Sberbank domestically and in these countries.
Mr. Koleda tells us, “Through the Confederation of Industrialists of Belarus, we have launched the Business Council for Economic and Trade Co-operation with the Republic of Lithuania, of which I am chairman. A similar structure has been created by the Confederation of Lithuanian Industrialists, chaired by Mr. Paulauskas. We are ready to combine our efforts to use the Council as a platform for establishing business contacts between our two countries, developing constructive proposals.”
The Chairman of the Lithuanian Council for Co-operation of the Party, Sigitas Paulauskas, notes the successful implementation of VMG’s investment in the Mogilev Free Economic Zone, worth over 90m Euros and creating 900 jobs. He adds that such projects show Belarusian and Lithuanian businessmen what is possible. He hopes to see the Lithuanian Business Co-operation Council support business interests through information centres, aiding fruitful relations. Crucially, he believes it to be vital that politicians listen to business needs and that they maintain constant dialogue with entrepreneurs and industrialists at all levels.
The Belarusian Ambassador to Lithuania, Vladimir Drazhin, summarised the outcomes of the Klaipeda Forum, saying, “Over recent years, bilateral trade and economic relations between Belarus and Lithuania have seen not only stable positive dynamics but a level of strategic partnership. We are gradually integrating the economies of our two countries, showing prospects for further strengthening and development. This success is evident in efficient, well-co-ordinated work by Belarusian and Lithuanian businessmen, who enjoy regular contact, meeting for consultations and identifying strategic areas of possible liaison.”
Last year, Molodechno hosted the First Belarusian-Lithuanian Forum for Regional Co-operation. Close ties between regions bring stability and viability to business projects, tying them to the specific economic interests of individuals. The impressions of Klaipeda are still fresh, with Belarusian guests soon to set off for the next regional forums in the cities of Alytus and Druskininkai. There can be no doubt that the business communities of our two countries are establishing ever more links, creating a mutually beneficial economy and promoting the well-being of citizens.
By Nina Romanova
