‘It’s not profitable to be ‘dependent on a pipe’

Belarus can benefit much more from joining the Single Economic Space, if develop collaboration
By Yuri Chernyakevich

Not long ago, I visited Smolensk, delighting in viewing its monasteries’ old frescoes and the gun-slots in the 17th century fortress wall. However, I was also initially surprised at not having had to cross a Belarusian-Russian border checkpoint. Walking through the city, I passed numerous Belarusian branded shops — such as Milavitsa, Bielita and Galanteya — and, several times during the day, I saw trucks advertising food produced by our Orsha and Volkovysk meat factories. Souvenir shops even offered Belarus-made linen towels and napkins. It really made me feel quite at home!

No doubt, Belarusian products have found recognition in neighbouring states — especially those belonging to the Single Economic Space and the Customs Union. Few would be surprised at finding Belarusian tractors in Novosibirsk and Omsk, or Kommunarka sweets in Nizhny Tagil and Krasnoyarsk. You can buy Pinskdrev furniture across Kazakhstan while Amkodor loaders operate on Astana streets. Integration has brought economic benefits, as the Dean of the Belarusian State University’s Economic Department, Prof. Mikhail Kovalev, emphasises. He tells us, “The Single Economic Space has long since seriously influenced the country’s development. The integration union has enabled Belarus, Russia and Kazakhstan to better protect their markets against foreign imports, while expanding sales of their own produce.”

The expert’s words are proven by figures: turnover between Customs Union member-states is steadily growing, reaching an impressive $70bn last year. Moreover, Belarus could benefit even more if it continues along this path. Clearly, strengthening liaisons between countries is vital; the Customs Union will bring benefit only if our three states’ enterprises conduct industrial and sci-tech co-operation. Many experts share this view, as does Mr. Kovalev, who notes that Belarus can and must join Russian oil processing on our common customs territory, since it will benefit all parties.

“Venezuela immediately realised that it would be better to sell oil products to Europe, rather than just oil,” continues Mr. Kovalev. “It’s far better to supply Venezuelan or Russian raw materials to Belarusian Mozyr for further processing, then sell the petrol to Europe. So far, Russia prefers to export crude oil and gas, while building oil and gas pipelines. Why not establish joint oil processing and petrochemical facilities on Belarusian territory, to allow export to Europe? It would be much more profitable than being dependent on the existing oil pipe.”

Other promising projects exist, thanks to our Single Economic Space, which is creating favourable conditions for major injections into infrastructure: roads and the transport-logistical network. Why should Lithuania and Poland (rather than Customs Union members) make money from shipping foreign cargoes between Russia, China and Europe?

At present, Belarus generates around $3.5bn from its transport-logistical services but Mr. Kovalev is convinced that much more is possible. Export volumes need to be raised through establishing new logistical centres jointly with Russian and Kazakh businesses. The country would earn more foreign currency as a result.

Information technologies are another promising area for Customs Union members, who are keen to rival the present leaders in Singapore, Japan and South Korea. Why not set up a single Eurasian high-tech park in Belarus? Its produce would enjoy great demand in Europe.

“These and many other economically profitable projects should be realised, to enable Belarus, Russia and Kazakhstan to dynamically develop, joining the list of highly developed states enjoying competitiveness globally,” Mr. Kovalev believes.

The recently established Single Economic Space has opened new prospects for the country. To promote produce, Belarusian enterprises are now using the preferences bestowed by our three-state coalition. Having visited Smolensk, I’m personally convinced that such co-operation should be strengthened further. The economic advantages of integration are in the hands of Russians, Belarusians and Kazakhs; this is at the heart of success.
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