Outpost for new expansion of commodities and capital

Polish small and medium-sized businesses trade with their closest Eastern neighbour, while investing in local and global projects

By Tatiana Petrushenko

This year began favourably for the economic relations of our two countries: from January-April, mutual trade reached $780m (rising by over a third). According to the Trade and Investment Department of the Polish Embassy to Belarus, in 2010, our commodity turnover rose 22 percent on 2009, reaching almost $2bn. For the first time in many years, our mutual trade was in favour of our Western neighbour, with the balance standing at about $200m. However, this year, the Poles believe trade will slow, due to the unfavourable economic situation in Belarus. They merely hope to retain turnover at last year’s level.

Poland sells to Belarus over 150 products, with pork representing about 10 percent of the total volume. Various technological equipment and plastic articles follow. Meanwhile, Belarus exports oil products (over a third of all supplies), mineral fertilisers, timber, wooden goods and ferrous industry products.

In 2010, Polish exports exceeded 117bn Euros, with imports accounting for about 131bn Euros. As in Belarus, the Polish foreign trade balance is negative; however, the gap is compensated by foreign investments. Their inflow enables competitiveness to grow. Interestingly, about a third of total foreign deliveries are made by small and medium-sized businesses, who account for almost half of GDP.

Special programmes are also available for exporters. Last year, about 8bn Euros were allocated for this purpose by the state budget, with foreign buyers of Polish goods provided with credits (including with the attraction of a counterparty bank). Support for Belarusian partners accounted for 800m Euros in 2010, although less than 200m Euros were used. An interest rate made 4.6 percent.

Poland has another efficient method of stimulating exports: returning loan interest payments to companies whose goods are dispatched to foreign buyers on long term deferred payment terms. Moreover, expenses for taking part in international exhibitions and organising business trips are partially compensated, while assistance is rendered in seeking out office and production premises.

Analysis of economic collaboration with Belarus confirms that small and medium-sized businesses in Poland are active. Regarding the volume of injections into Belarus (totalling almost $28m last year), our Western neighbour occupied 12th position — accounting for $27m of direct investments (13 percent being injections into statutory capital).

Interestingly, by early 2011, about 600 companies with Polish capital were operating in Belarus; these were primarily small firms, with statutory funds of $20,000. Most dealt with trade, production of timber and its manufactures (excluding furniture), food, beverages and tobacco.

This year could be momentous for Belarus-Poland investment co-operation, due to Belarus’ joining Russia and Kazakhstan within the Customs Union. However, due to economic and financial difficulties, Polish businesses are yet to enter the Belarusian market wholeheartedly. Nevertheless, many Polish businessmen are considering establishing an anchor in Belarus, from which to organise deliveries to the whole Customs Union territory.

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