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Belarus and Developing Countries: Potassium, Oil and Tractors

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Belarus and Developing Countries: Potassium, Oil and Tractors 100 BELARUSIAN YEARBOOK 2011 BELARUS AND DEVELOPING COUNTRIES: POTASSIUM, OIL AND TRACTORS Siarhei Bohdan Summary Belarus’ relations with developing countries always had a pragmatic character. The official Minsk steered clear of ideological projects, offering purely verbal support of the Libyan and Syrian regimes and pursuing law#abiding policies in military and technical cooperation in conformity with international legislation. Belarus’ main objective in the developing world was to increase the number of partners. The difficult economic situation – a huge trade deficit – was another powerful argument in this situation. Furthermore, global developments forced Minsk to refuse contacts with a number of Arab countries, including Iran. Trends: • A number of Belarus’ long#standing partners – Libya, Syria, and Egypt – de facto ceased to be on the list of Belarusian foreign policy objectives. • Its main partners were mainly China, Arab countries of the Persian Gulf, Venezuela and Iran. • With respect to the economy, cooperation with developing countries remained unchanged – app. 10% of Belarus’ export. Structurally, potash and nitrogen fertilizers were leading items in the Belarusian export, with chemical, mechanical engineering products and other goods far behind. This very persistent situation is a hindrance to overcoming the trade deficit, which could be done by increased delivery into developing countries. China. It is very doubtful that Belarus be of any great signifi- cance in Chinas foreign policy, despite all pretence on the Belaru- sian side. Chinese President Hu Jintao conspicuously ignored Be- larus during his summer 2011 visit to Kazakhstan, Russia, and Ukraine. Belarusian contacts with the PRC are on the level of de- partmental and organizational heads interested in cooperation, and not on the higher political level, compared to other developing countries. In March 2011, Vice President of AVIC International (part of China Aviation Industry Corporation AVIC) Jiang Wei visited Belarus. In June, a delegation of Great Wall Corp (satellite launch and delivery) was received personally by the President. Belarusian officials consider PRC to be a kind of a state buil- ding model, an alternative to those of the West. Facing a financial Foreign policy 101 crisis, President Lukashenko invited a panel of experts from the Peoples Bank of China headed by Xie Duo, director of Financial Market Department, hoping that they would suggest solutions to the crisis different from those of the IMF and thus more acceptable for him. Ex-ambassador to the PRC and incumbent Deputy Prime Minister Anatoly Tozik keeps publicizing Chinese methods of ap- proaching issues from secondary education to Chinese construc- tion norms. Belarusian authorities are pinning high hopes on China as an investor. Chinas role and that of other developing countries is growing more significant as relations with the West are worsening and Russia is gaining more and more control over the Belarusian economy. Nevertheless, experts point out that China is an active creditor but a reluctant investor into Belarus1. In September, Belarus received a USD 1 bln credit to buy Chi- nese goods, but its conditions for Belarus, lack of finances, are highly advantageous. When Wu Bangguo, Chairman and Party sec- retary of the Standing Committee of the National Peoples Con- gress of China, visited Belarus an agreement was signed on Chi- nese participation in privatization and establishment of a Chinese- Belarusian industrial park. This will include household appliances and electronic, mechanical engineering and biomedicine produc- tions. In 2011, bilateral trade grew by 31% and reached more than USD 3 bln. The trade deficit increased by 27% and reached USD 1.617 mln. The key export items were potash fertilizers (44% of total export) and caprolactam (25%). India. A number of objective reasons differences in foreign policy and ideology, economic structure Belarusian-Indian rela- tions are far less intensive than those with China. Despite this, India is a significant direction of Belarusian foreign policy. In early August India officially expressed its interest in acquir- ing a stake in Belaruskali2. On 2627 August Belarus hosted an official delegation from India headed by Sanjay Singh, Secretary 1 Dmitry Zayats. Minsk expects Beijing to invest but China is ready only for credits // Naviny.by: http://news.tut.by/economics/252625.html 2 Siarhiej Gezgala. Realny pakupnik. Indyja aficyjna vykazala zacikaulenasc u akcyhach Belaruskalija (A potential buyer. India officially announced its interest in a Belaruskali stake) // Nasha Niva: http://nn.by/ ?c=ar&i=58321 102 BELARUSIAN YEARBOOK 2011 (East) of the Foreign Ministry and former fertilizer secretary Sutanu Behuria. The Indian press wrote about the possibility of acquiring a 20% stake in Belaruskali. The decision was made on 10 August at the government meeting chaired by Prime Minister Manmohan Singh. Anonymous sources in the Indian authorities name overval- uing (USD 30 bln) to be the biggest stumbling block. At the same time, while the August visit did not result in any concrete step towards India acquiring a stake in Belaruskali, the officials said Belarus had agreed to give India the first right of refusal if and when it decided to sell a stake in the company3. Middle East Iran. In February, ambassador of Iran announced that his country is implementing projects totalling USD 1.5 bln and negotiating some more in total of over USD 1 bln. He mentioned constructing EUR 250 mln worth Magnit-Minsk complex and a logistics centre in the free economic zone Minsk. Projects with Iran are widely publi- cized at the planning stage but few develop any further, so we should be cautious about the ballyhoo. The bulk of Iranian (Chi- nese and some other) investment projects are low-tech or dirty industry. For example, Iranian businessmen intend to start wire production in Reèyca (Rechitsa), to extract crushed-stone and to build a cement plant. The ambassador also mentioned car assembly, but on 15 Febru- ary 2011 First Deputy Prime Minister Vladimir Semashko announced that the government intends to refuse Iranian car assembly: We are very dissatisfied with this production. Only 5 000 cars have been sold over 5 years. On 24 March Minister of Justice Viktor Golovanov visited Iran. He held talks with the Minister of Justice Morteza Bakhtiari and met the head of the judicial system of Iran Sadeq Larijani and Chairperson of the Parliament Ali Larijani. An extradition treaty was signed during this visit, but the ratification practice between Iran and Belarus shows that it is unlikely to come into force soon. After the USA introduced sanctions against Belarusian compa- nies doing business with Iran, in early June the president of Iran 3 Aman Malik. India, Belarus may ink non-disclosure pact // Livemint.com of 14 February 2012: http://www.livemint.com/2012/02/14000657/India- Belarus-may-ink-nondis.html?h=B Foreign policy 103 made a statement warning of plots by Western powers to bring free nations to their knees and highlighted the significance of sustainable political and economic relations between Iran and in- dependent and anti-arrogance countries4 such as Venezuela, Ec- uador and Belarus5. In August, Belorusneft oil company withdrew from Jofeir oil production project and the Iranian oil sector altogether. Iran made a statement that Belorusneft failed to meet the treatys conditions and the extracted volume was lower than had been agreed on6. Some Belarusian media suppose that the reasons for Belorusneft to give up on Jofeir were the sanctions the United States slapped on the Belarusian oil producer for cooperating with Iran. This project is quite mysterious. The officials stated that daily extraction volume did not exceed 2 800 barrels per day against the stipulated 3 5007. At the same time, according to the Iranian am- bassadors statement in February, the daily extraction at Jofeir to- taled 15 000 barrels and was about to double. Moreover, when the project was closing, the National Iranian Oil Company was prepar- ing to open an office in Minsk. The official Belarusian media did not cover the projects closure. In early October, the National Bank Chairperson Nadezhda Yermakova announced Belarus intention of drawing in loans from Iran of USD 400 mln in total. But the loan details and the history of Belarusian-Iranian relations render this highly improbable. Qatar. On 1719 May 2011 Deputy Foreign Minister Sergei Aleinik visited Qatar, president Lukashenko paid an official visit on 1516 August. The countries have had close relations since 2007. The 2011 presidents visit differed from his first one in 2001: it was solely to Qatar, despite the usual practice of visiting other coun- tries of the region. Active relations with Qatar, which openly sup- ported the uprising in Libya, testified to pragmatism of the Belaru- sian policy and revealed the lip service nature of the support for Gaddafi. A large package of documents was signed during this visit. Qatar was offered a number of projects, inclusive of a complex fertilizers 4 Iran warns of West plots against nations // Press TV. Jun 9, 2011 http:// edition.presstv.ir/detail/183864.html. 5 Ibid. 6 http://www.svaboda.org/content/article/24299296.html 7 Ibid. 104 BELARUSIAN YEARBOOK 2011 production, a multifunctional sports and hotel centre, a joint enter- prise for potash ore extraction (or a stake in Belaruskali as other sources indicate), several trading and logistics centers, etc. In October, a Qatar delegation headed by Sheikh Abdullah bin Nasser bin Khalifa Al Thani, Minister of Interior, came on a work- ing visit to Belarus to further cooperation. Belarus relations with Arab countries have a significant sector in enforcement depart- ments, i.e. defense and security. Viktor Lukashenko, the presidents son, plays a significant role in them. Oman. On 47 May, an Omani delegation headed by Foreign Ministrys Under-Secretary for Diplomatic Affairs Sheikh Ahmed bin Yusuf al Harthy visited Belarus for consultations. On 2425 May, Omani Minister of Defense HE Sayyid Badr bin Saud al-Busaidi came to Belarus.
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