09/09/2022, 09.20
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Minsk asks Moscow for money

by Vladimir Rozanskij

Belarus is in the grips of an economic crisis, hit by Western sanctions for its support of the Russian invasion of Ukraine. In the first half of 2022 Belarusian GDP fell by 6%. The Kremlin's economic aid is deemed insufficient. Belarusian expert: we have gone back 10 years.



Moscow (AsiaNews) - Belarus has lost over 50,000 jobs since the beginning of the year. In July, the number of active workers fell to just over 4 million, the lowest ever for the country, partly due to the strong migration of those who do not want to live in war-like conditions behind the gates, and the early retirement demanded by many others. These are the figures released by Satio, a centre specialising in economic planning.

In the first half of 2022 Belarusian GDP dropped by 6%, and is expected to hit -10% by the end of the year, never so bad in the last 25 years. The main cause of the decline is the Western sanctions, the first wave of which came after the repression of the 2020 street protests against the forgeries that led to the re-election of President Lukasenko; they were joined by those for the Russian war in Ukraine, actively supported by Minsk, which granted the Russians a line of invasion through its territory.

The EU then placed an embargo on Belarusian oil supplies, refining products, metal and agricultural production. Exports to Europe have been reduced by more than half, whereas previously they accounted for 24%, compared to 41% of trade to Russia. Vice-Premier Petr Parkhomcik said that exports to Russia had increased 1.3 times in this period, but due to sanctions -18 billion worth of products, one third of last year's exports, are blocked.

The increase in consumer prices coupled with the reduced spending power of wages, are leading to a severe impoverishment of the population. According to Satio, for more than half of Belarusians, savings are at most enough for one month, in case of loss of income, and even the most miserable jobs are held with great fear of losing everything. The unemployment benefit in Belarus is around USD 10 per month.

The economies of Russia and Belarus suffer differently, as Moscow starts from a much higher base than Minsk. Economist Lev Lvovsky, a contributor to the Beroc analytical centre, believes that the sanctions policy makes Belarusians suffer much more than their 'big brothers'. In his opinion, 'only in appearance are the sanctions against Belarus less severe, because our economy is smaller in size, but much more open than Russia's'. Lvovsky points out that Belarus does not have a large domestic market: 'It is crucial for us to remain tied to international ties; moreover, we have been suffering from the sanctions for a year before those imposed on Russia, with cumulative effect, and Moscow still continues to export gas and oil'.

An important item was the sale of potash, which used to be transported through the Lithuanian port of Klajpeda, but now Lithuania has refused the Belarusians transit through its territory; it is now partly routed through China by long rail transports. Trade with Ukraine, which was one of Minsk's main trading partners even after 2014, when Russia had blocked relations with Kiev instead, has been completely cancelled.

All of Lukasenko's hopes of not sinking into an irreversible crisis are therefore pinned on the generosity of Moscow, a partner of the 'Unitary State' that has been in the making for more than two decades, from which the Belarusian 'batka' (father of the homeland) himself has repeatedly tried to escape. Russia has recently granted over a billion dollars in funding to support exports from Belarus, and partially compensate for losses to Europe and Ukraine.

Mutual visits by the two countries' leaders and senior officials are increasingly frequent, and almost all of them concern the terms of Moscow's credits to Minsk, which still considers them insufficient. According to Lvovsky "we have already gone back 10 years, and everyone is trying to prepare for even tougher times".

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