Expense of place in the sun

National economy needs to move with the times to remain globally harmoniousBy Vladimir Velikhov
The Belarusian economy is tiny on a global scale, producing just 0.15 percent of the world’s GDP. However, as a small, compact country, it’s enough. The question is whether we can maintain and, even, grow our revenue, to ensure a good standard of living for citizens. Across the world, there exist several poles of economic development, each only superficially friendly since, in reality, they vie to dominate new markets, ever in competition. If you rely on others, it’s important to have something unique to offer: your own niche. Mammals once co-existed with dinosaurs and, of course, have outlived their reign, being more adaptable. Can Belarus also move with the times and adapt itself rapidly to remain at the cutting edge of global demand? The discussion was taken up at a recent conference entitled The Problem of Belarus’ Balanced Integration into the World Economy.

The unique geographical position of the Republic is both a blessing and a curse, since it offers unprecedented opportunities for trade and sales to both Asia and Europe. However, this very position also places us at the heart of international global competition, between technologically developed Europe, ambitious and populous Asia and resource-rich Russia. Despite these harsh realities, the Deputy Chairman of the Belarusian Scientific and Industrial Association, Georgy Grits, believes we can remain more or less independent. He notes that Russia has lost its ‘intellectual’ industry, leaving Belarus to step in. We are part of the world’s industrial belt, with an existing niche which can be maintained if we prioritise correctly.

The Dean of the Faculty of Economics at the Belarusian State University, Mikhail Kovalev, is convinced that we should orient our exports towards thriving Asia. Quoting various statistics and forecasts, he emphasises, “We need to decide what exactly to sell to China.” Of course, the Far East is galloping ahead and is self-sufficient in many ways. China has huge gold reserves of more than $3trillion. Finding the ‘right’ goods for the Chinese market is no easy task however, since trends pass quickly and domestic goods are produced cheaply in China, making it difficult for rivals to compete.

Mr. Grits believes that our position outside of the WTO can be seen as an advantage, since we can act outside of its canons, while working jointly with Kazakhstan and Russia. All legal formalities can be met and Belarus has the support of the Customs Union, which the world recognises as a force to be reckoned with.

The current global economy is too complex to obey a single set of rules and opinions differ widely on the best strategy for survival. Some are convinced that Belarus needs to embrace Europe, while others advise primary relations with Russia and Kazakhstan and some wish to see us oriented towards the East. The only true consensus relates to the need for reform and modernisation of domestic industry. Smaller European states have begun focusing on particular niche specialties within two or three industries. Mr. Kovalev notes one example of this which is flourishing: spray cap nozzle production for the perfume industry. The company involved has taken the science of its product to the greatest degree, ensuring that it offers the very best quality at the best price possible. It has created its own monopoly in its narrow segment: nobody in the world can produce sprays cheaper or better.

Our national economy needs to move similarly, focusing on a narrower band of specialties. There are about a hundred branches at present and we lack the necessary resources (financial, human and raw) to ensure their global competitiveness. Naturally, closing enterprises is painful socially but radical solutions are required. The time for action is approaching rapidly.
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