Expert on import substitution and foreign policy priorities of Belarus in the context of the President's Address

For Belarus in foreign trade, strategic partnership with RUSSIA and CHINA is now a priority. The markets of Asia, the Middle East, Africa, Latin America are also relevant. This was emphasized by the President in his Address to the Belarusian people and the National Assembly. In addition, issues of import substitution and increased investment are on the agenda. Yulia Abukhovich, Senior Lecturer of the Department of Economic Theory and Marketing of the Belarusian State Technological University, discussed these areas in more detail in an interview with a BelTA correspondent.

- In his Address, the President outlined cooperation with strategic partners - Russia and China as a priority in foreign trade. He also set the task of strengthening the vector of interaction with the countries of Asia, the Middle East, Africa, and Latin America. What are the prospects, in your opinion, for Belarus in traditional and new markets?

- The President's address to the Belarusian people and parliament traditionally defines the development priorities of our country, including steps to deepen cooperation with other countries. A feature of this year’s Address, when, according to the HEAD of state himself, there is less and less space for a safe and dignified life on the planet, and a premonition of epoch-making changes is literally in the air, was an honest and open discussion of the unhealthy situation that has developed in international relations .

The way out of the current crisis situation in the world, which has arisen and is aggravating on the initiative of a number of countries traditionally referred to by the collective concept of the "West", is obviously the strengthening of ties between old - proven friends, states that are strategic partners, as well as an even more intensive search for points of convergence with others. countries, as well as Belarus, concerned about destructive processes in world politics and economy.

Russia is the most important partner of our country in all spheres, including economic. Our bilateral economic ties are not limited to mutual trade, but extend to all types of economic processes and relations, the interaction is comprehensive and multifaceted.

it is no secret that Russia is the number one trading partner for Belarus. It is less known that for Russia Belarus is an extremely important country, and this importance has grown even more in the last year. Belarus, normally ranked third or fourth among Russia's main trading partners, came in second last year (behind only China), surpassing Germany, an economy sixty times larger.

In the structure of Russian imports, almost half is occupied by machinery and mechanisms, about 20% - by the so-called intermediate imports (components, parts, assemblies), 16% - consumer goods, 12% - food and 6% - medicines. Obviously, the reduction of Russia's trade relations with European and North American countries has led to an increase in trade with friendly countries that have the ability to produce everything that the Russian economy has become in dire need of.

Belarus has a well-established and highly developed industrial base, which makes it suitable for industrial exports to traditional markets. Our country has also earned a reputation as a reliable supplier of agricultural and food products, providing opportunities to enter traditional markets with high demand for such products.

In addition to the existing opportunities formed during the construction of the Union State and economic integration within the EAEU, the existing schemes of industrial and trade relations, the deepening of industrial cooperation, and the organization of production as part of the replacement of imports from unfriendly countries that have become inaccessible are currently being reviewed.

The recent visit of the head of the Belarusian state to China showed the scale of the interest of the two countries in continuing mutually beneficial cooperation at the highest level of all-weather and all-round strategic partnership. Common approaches to cooperation in numerous areas were agreed upon: from trade, logistics, industry, agriculture to scientific and expert-analytical activities, security and defense. Our countries have begun to address issues of expanding cooperation between the two countries in the production of biotechnological and engineering products, healthcare and medicine, and increasing the number of direct flights. Several large commercial contracts were signed, creating the basis for the formation of modern industries, and in fact - new branches of the Belarusian economy.

New foreign markets will give the Belarusian economy additional stability. Work in this direction has been going on for a long time, and there are already tangible successes, but the prospects are still huge.

The countries of the Near and Middle East, in particular Iran and the United Arab Emirates, are attractive markets for Belarus with a growing demand for industrial equipment and agricultural products. In addition, the states of the Persian Gulf will also act as participants in more complex trade, economic and investment schemes.

Belarus has managed to establish close economic ties with Singapore and other countries of Southeast Asia, especially with Vietnam and Indonesia, which in modern conditions can provide valuable access to their markets, as well as indirectly to the markets of third countries, and opportunities for investment in new industries Belarusian economy. The potential for economic cooperation between Belarus and the countries of South Asia, primarily with India, has not yet been fully tapped.

Latin America, due to objective reasons - geographical remoteness and aggravated transport and logistics difficulties - is for the most part an unused market for Belarus with a potentially very significant demand for Belarusian products.

Africa is also a region underdeveloped by Belarusian enterprises, but has very high potential for long-term investment and trade opportunities, especially in areas such as infrastructure development, mining and agriculture. The visit of the President of Belarus to Zimbabwe in February of this year clearly showed the high interest of Africans in cooperation with our country. There are good prospects for working with Kenya, Ghana, Botswana, Zambia and Francophone African countries.

Let's not discount our traditional markets in the European Union. Continued unfriendly actions and the persistence of sanctions restrictions hinder work in the Western European direction. At the same time, numerous facts testify that the interest of business circles in continuing mutually beneficial relations with Belarusian counterparties has not disappeared, but its implementation is associated with the need to use new, more complex schemes of work.

- The creation of a full-fledged economic union in the Eurasian space "without exemptions and restrictions" also remains a priority. What prospects do you see for Belarus as a member of this union on the world market? What is the importance of membership in the EAEU in modern conditions and what opportunities does this give our country?

- As a member of the Eurasian Economic Union, Belarus has access to a market with a population of more than 180 million people, which creates the potential to expand the consumer base of domestic goods and services. At the same time, Belarusian enterprises can benefit from increased competitiveness in the EAEU market through access to cheaper raw materials, more efficient supply chains, key transport routes, infrastructure hubs and a variety of technologies. In the union countries in the aggregate there are objectively more investment resources.

The functioning of the EAEU makes it possible to reduce trade barriers between member countries, making it easier for Belarusian enterprises to import and EXPORT goods and services. The EAEU contributes to creating a stable economic environment for member countries through measures such as coordinated monetary and fiscal policies. In general, this union provides a platform for the economic integration of the member countries, which is of great importance in the coming times, when the world is splitting into separate unions and blocs.

In addition, although the EAEU was originally created as an economic association, as a result of its activities, various externalities are formed, which subsequently positively affect the economic situation of the member countries. These beneficial factors include increased well-being of the population and the associated strengthening of public security, cooperation in the field of innovation, which in turn stimulates economic growth and development, as well as increased cultural exchange and mutual understanding between member countries, contributing to lower transaction costs in the single market. etc.

- Also in the Address, much attention was paid to the forthcoming entry of Belarus into the Shanghai Cooperation Organization. In what new markets, thanks to this, will our country be able to take a stronger position and how will this affect the status of the republic in the international arena?

- Full membership of Belarus in the Shanghai Cooperation Organization gives the country additional opportunities in its international political and economic relations.

First of all, it is the strengthening of political ties with other member states, states that are friendly towards Belarus. Participation in the work of the SCO will lead to more intensive diplomatic interaction on such issues as the coordination of foreign policy positions, security and defense. Cooperating with such important countries for the world political system as Russia, China , India, the member state of the organization is included in the processes not only at the regional level. Full membership of Belarus in the SCO objectively enhances its international prestige and status.

Growing potential for economic cooperation: Belarus can expand partnerships with SCO member states to increase its exports and investment, especially in the fields of energy, transport and logistics. By becoming a full member of the SCO, Belarus will gain greater access to new markets, especially in Central Asia. This may allow to diversify trade and investment ties and reduce dependence on its traditional partners in the West.

By joining the SCO, Belarus can play a decisive role in connecting the economies of Asia and Europe within the framework of the One Belt, One Road initiative, including in a broader format of linking this project with other regional initiatives and institutions, in particular with the EAEU.

- The topic of import substitution is also on the agenda, especially in connection with sanctions. What results has Belarus managed to achieve in this direction? What are our prospects to reduce dependence on imports?

- Recently, Belarus has been forced to pursue a policy of import substitution in order to reduce its dependence on foreign goods and services, especially in the face of tougher sanctions and restrictions from Western countries.

In general, our country has made some progress in reducing its dependence on imports in some sectors, especially in the sectors of agriculture, building materials and engineering.

Belarus has significantly increased domestic production of MEAT, MILK and vegetables, further reducing its already modest dependence on imported food. The country has timely invested in the modernization of its agricultural sector and increased food production capacity, which ensured the saturation of the domestic market and led to an increase in exports of these products.

In addition, Belarus is prioritizing the development of the domestic building materials industry, reducing its dependence on imported goods such as cement, bricks and roofing materials. This also made it possible to increase the export of building materials to neighboring countries, especially to Russia.

Also, our republic has increased domestic production of machinery and equipment, especially in the field of agriculture and transport. This has led to increased exports of tractors, trucks and other equipment to neighboring countries, especially Russia and Kazakhstan.

However, there are still several sectors in which Belarus is still highly dependent on imports, especially in the fields of energy, pharmaceuticals and high-tech equipment.

Our country imports almost all of its oil and gas from Russia, which makes it highly dependent on its neighbor for energy supplies. Recently, fuel for nuclear power plants has been added to this, which, with an increase in overall dependence on energy imports from a neighboring country, has relatively reduced the ability of individual suppliers (oil, gas and nuclear fuel) to dictate their terms.

Belarus remains heavily dependent on drug imports, especially from Russia and Europe.

Currently, we lack the infrastructure and experience to produce certain types of high-tech equipment such as computer and medical equipment, which leads to a significant dependence on imports.

Overall, while Belarus has made progress in reducing its dependence on imports in certain sectors, much remains to be done to make its economy more self-sufficient. The union of Belarus with Russia will help in achieving this goal, especially given the current geopolitical climate and the growing tensions between the allied countries and Western countries.

- In addition, the head of state touched upon the topic of investment. In particular, he indicated that it is necessary to increase investments in production and stimulate responsible investors. Which countries might be interested in investing in Belarus?

- In previous years, such countries as Russia, China, Germany, France and Great Britain showed interest in investing in Belarus. A prominent place in investment cooperation with our republic was occupied by international institutions, primarily the International Bank for Reconstruction and Development, the International Finance Corporation, the European Bank for Reconstruction and Development, and the European Investment Bank. The current situation is not conducive to continuing the usual forms of interaction, but the reduction in the activity of a number of former investors is offset by the increased involvement of our faithful partners - Russia and China - and the increased practical interest of countries that previously participated poorly in financing investment projects in our country.

It makes sense for domestic investors to invest in industries that have high potential for growth, such as information technology, agriculture, manufacturing and logistics. The government has also identified several priority sectors for investment, including digitalization, biotechnology and renewable energy.

Among the priorities for the development of the investment process in the country is the formation of various channels for the transfer of free capital, including banks, venture capital companies, private capital, crowdfunding and government subsidies. To date, the presence in Belarus of its own stock exchange is underused, which, on the one hand, can provide domestic enterprises with access to public equity and debt capital markets, and, on the other hand, direct the operating cash flow generated by the national economy for investment and reinvestment purposes. Together, this will lead to the saturation of the economy with the necessary funds, will contribute to its growth, modernization and diversification of its structure.

BELTA.