Boosting the River Dnieper
[b]Belarus-Ukraine economic co-operation could become a model of success for our two neighbouring states[/b]Ukraine is Belarus’ neigh-bour, a country which most of us have visited at least once — whether on a business trip, to the Crimea or on a pilgrimage to see Kiev’s churches (considered to be among the most beautiful Orthodox churches in the world). It has a population of 46 million, who reside on its 604,000sq.km of territory. However, these are meagre figures. We know Ukraine is large in size; correspondingly, it has a huge market.
Ukraine is Belarus’ neigh-bour, a country which most of us have visited at least once — whether on a business trip, to the Crimea or on a pilgrimage to see Kiev’s churches (considered to be among the most beautiful Orthodox churches in the world). It has a population of 46 million, who reside on its 604,000sq.km of territory. However, these are meagre figures. We know Ukraine is large in size; correspondingly, it has a huge market.
Eastern Europe is known as one of the regions most affected by the economic crisis. Disappointingly, Belarusian-Ukrainian turnover has halved (in comparison to last year). In 2008, we traded almost $5bn while the 2009 figures have thrown us back three years. However, it’s no exaggeration to say that the Belarusian President’s recent official visit took place against a favourable economic background. “The situation is gradually levelling. Since the third quarter, we’ve been registering growth,” notes Mr. Lukashenko.
Belarus is greatly interested in enhancing co-operation with Ukraine. Trade with this country is traditionally stable, so today’s negative balance is a sensitive issue for Belarus. It could be partially solved by closer liaison. There is no doubt that, as soon as the global economy recovers and starts its growth, Belarusian-Ukrainian turnover will restore its strength. All the foundations are there.
This year, many Belarusian products have been exported to Ukraine for the first time. Among the thirty or so are butter (worth $30m), dried milk and milk whey. This reminds us of the recent ban on the delivery of dairy products to Russia. The ban is now lifted but, as a Russian proverb says, if it weren’t for bad luck there would be no luck at all. During the period of forced downtime, Belarusian products gained a foothold in new market outlets.
Three enterprises from the Gomel region (in Petrikov, Yelsk and Buda-Koshelev) are a good example. They have set up joint ventures with Ukrainian Almira and are now actively producing cheese and delivering dairy products to the neighbouring market.
BelAZ, Mogotex and Milavitsa have gone further, establishing joint companies with Ukrainian partners — the best kind of liaison, with each state keen to support its manufacturers and, hence, limits pure imports.
The Belarusian Embassy tells us that two joint tractors plants have been launched in Ukraine — in Kiev and Nikolaev. ‘Kiy’ tractors already participate in state programmes and volumes of micro-credits for small farmers are once more rising, having been scaled back in previous months. The future looks bright.
The production of Belarusian seeding machines has been set up in Dnepropetrovsk, on the basis of a local company. Additionally, there is an agreement to manufacture Gomel’s grain harvesters in Kharkov. However, it seems Mogilev’s lifts enjoy the greatest success. Their production near Kiev began only three years ago but they have been installed in about 30 percent of all newly built houses. Other Belarusian enterprises are following in their footsteps.
Minsk and Kiev have long defined measures to contribute to economic collaboration, agreeing to settle accounts in national currencies rather than dollars — as it’s quicker and economically more feasible. Formal barriers have been lifted but the National Bank of Ukraine is yet to support Belarusian proposals to open credit lines in national currencies.
Journalists are most interested in Belarus-Ukraine joint energy projects, alongside interaction within the Eastern Partnership programme. Both states lack enough resources of their own and desperately need diversification while transiting huge volumes of Russian oil and gas to the EU. This year, deliveries of Ukrainian energy to Belarus have been renewed, with a contract (worth 700m kWh) likely to be over-fulfilled almost two-fold. Further growth is planned — taking into account that Lithuania is closing its Ignalina nuclear power plant and needs additional supplies of electricity.
Energy is one of the most important parts of the Eastern Partnership. While delivering a speech to Kiev National University’s lecturers, Mr. Lukashenko said, “We plan to assess this window of possibilities which has opened for us, proceeding from its convenience for Belarus and the practical payoff in the form of real strengthening of co-operation with the European Union, under projects we’ve proposed.” In Kiev, the parties tried to outline further plans. Infrastructural projects were primarily in focus — such as the development of the 9th transport ring (for the Varangians to the Greeks route) to make it the equal of the 1st ring (Berlin-Warsaw-Minsk-Moscow). Belarus and Ukraine also hope to build a new Minsk-Kiev motorway; it could become a major pan-European project.
Legislation governing bilateral relations is near complete. In recent years, over 70 agreements have been signed — perhaps the most signed by Belarus with any country.
By Alexey Slavinsky
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