Three-stage system of anti-sanctions

Instruction of the President to the Government — to preserve social standards

First Deputy Prime Minister Nikolai Snopkov provided the deputies with a full economic report on how and where do things stand in the country at a joint meeting of the House of Representatives and the Council of the Republic of the National Assembly of Belarus. At the same time, he stressed that Belarus confidently entered the new five-year plan and provided a backlog on the key indicators of the five-year programme despite external shocks.

Stability and balance 

The tightening of sanctions was an additional shock for the country and the economy after the pandemic. Nikolai Snopkov drew attention to the fact that the economy showed a steady growth of 2.3 percent in 2021 despite this pressure, “Over the past year, we not only restored pre-pandemic GDP growth, but also exceeded it by 1.6 percent. This result is higher than in many other states.” 
It was possible to maintain the stability and balance of the economy, and achieve a record foreign trade balance thanks to high export growth rates. Enterprises increased their net profit by 2.5 times and strengthened their potential. This made it possible to ensure further growth in wages.

The task of the Government is to preserve all social standards despite the sanctions. It should be noted that this is the instruction of the President. 

“Despite the fact that the new sanctions imposed against our country are of an unprecedented scale, the final intention of the West is to strike a blow to the standard of living of our people, to cause their discontent and social tension by weakening the potential of key industries and economic sectors,” said Nikolai Snopkov. 

Negative impact

The direct impact of sanctions affected about 20 percent of the Belarusian economy and indirectly spread to the rest of it, said Nikolai Snopkov. According to him, the GDP of Belarus in January-April fell by 2.1 percent because of these attempts. The negative impact of unfriendly actions on the economy is growing. Thus, starting from June the European market will be closed for the supply of wood, ferrous metals and products from them, cement and tires. According to the First Deputy Prime Minister, this is about $1.8 billion in export earnings, “In general, sanctions restrictions and the loss of the Ukrainian market are estimated at $14 billion in export revenue losses by the end of the year, or about 30 percent of the decline in exports.”
Nikolai Snopkov listed three main directions of the sanctions impact. The first is the movement of goods, direct trade restrictions on the supply of certain types of products, logistical and financial restrictions that narrow the export of even non-sanctioned products. The second is a ban on imports from unfriendly countries, including technology and equipment. Thus, they seek to slow down the development of Belarus in the field of modern technologies in the medium term. The third is the disconnection from SWIFT of a number of large banks, the ban on operations with the National Bank, and the restriction of access to financial markets.

Reasons why sanctions haven’t crashed our economy 

The economy of Belarus is adaptive to aggressive actions by our Western partners, Nikolai Snopkov said. He explained, 

“We have a positive external imbalance. Exports grew by 5 percent ($0.5 billion) in the first quarter, which is higher than last year. There is a positive external imbalance — almost $1 billion.” 

Although the energy and potassium supplies dropped, the export of other commodity groups increased by 10 percent. The situation on the foreign exchange market has also stabilised. In 2022, the sale of currency by all market participants exceeded its purchase by $500 million. Overstocking of goods is the lowest in recent years. The country’s industry giants performed quite well in financial terms. In the first quarter revenue grew by 17 percent outpacing the growth in costs. Profit from sales increased by 34 percent, net profit went up by 12 percent.
This is attributed to two factors: high demand for Belarusian products and the price growth on the international market. 

Concerning enterprise support 

The most important priority today is the stable operation of enterprises, said the First Deputy Prime Minister. What priority support measures are provided for this?
“Over 2.2 billion rubles in bank resources, which were earmarked for fighting COVID-19 in 2020-2021, will be used for that in addition to 200 million rubles earmarked for supporting import substitution and export efforts of small and medium private enterprises and 300 million rubles set aside for preferential loans for housing construction for large families,” said Nikolai Snopkov.
Apart from that, the deadline for writing off exchange rate differences for real sector enterprises, which have been affected by the sanctions, has been extended till December 31st, 2025. In addition, the base rent amount is kept at the limit, which was in effect in 2020-2021. The deadlines for paying off last year’s dividends have also been rescheduled for a number of organisations for 2021. Individual enterprises have been allowed (or are currently in the final stages of approval) to reschedule the payment of taxes, the repayment of budget loans and guarantees. Moreover, respites are granted for paying the rent. The period of validity of a number of permissions granted via 148 administrative procedures to commercial entities and permissions granted via 12 other documents has been tried till the end of the year.

Focus on the domestic substitutes

The actions of unfriendly countries have shown how important it is to expand the output of domestic products. Nikolai Snopkov stressed that this is a matter of economic sovereignty for our country, “We are working on two major fronts. The first one is finding alternative suppliers. Import applications have been compiled and sent to China. We are working with Russia. In the first quarter alone, the import of raw materials (excluding energy resources) increased by $473 million.” 
The second area of focus is the production of domestic substitutes for imported products. Russia-Belarus working groups were set up to facilitate import substitution in the automotive industry, agricultural engineering, machine tool industry, electronics, light industry, chemical industry and pharmaceuticals. Concrete achievements are starting to appear: joint projects in mechanical engineering and chemical industry worth $2.6 billion have already been developed.

What does our three-stage system of anti-sanctions look like? 
The government countered the attempt to destroy the country with systematic work. First Deputy Prime Minister Nikolai Snopkov told the deputies about this activity and stressed that it is carried out almost around the clock to reduce the impact of sanctions pressure.

The 1st stage
Special headquarters have been set up in each department that promptly respond and resolve sectoral issues, as well as issues of specific enterprises.

The 2nd stage
A republican operational situational staff has been created, where problematic issues that need to be addressed at the Government level are considered in a daily format. The 48/48 formula is applied for the first and second stages: 48 hours for preparation and 48 hours for decision-making.

The 3rd stage
There is a working group to counter sanctions. This group is endowed with broad powers by the Head of State and considers systemic issues. They require a comprehensive assessment of sanctions restrictions and the adoption of compensatory decisions. As well as responses to unfriendly actions of individual states.

FIGURES

 12,000 veterans received material assistance totalling more than 10 million rubles this year;

 $750 million — this is the volume of import-substituting products produced by small and medium-sized businesses in the first quarter of 2022.


By Svetlana Isaenok, Ilya Kryzhevich