July 17 – July 23, 2023
Belarus-Russia relations

A difficult start to import substitution as Russo-Belarusian integration acquires Juche motifs

The situation has not changed

Import substitution has moved forward to the point of agreements with Russian banks. During a briefing with Putin, Lukashenka proposed a version of the North Korean “self-reliance” economic plan.

A difficult start to import substitution as Russo-Belarusian integration acquires Juche motifs

As part of the RUB 105 billion state loan agreement between Russia and Belarus, Russian banks have delivered RUB 53.8 billion for import substitution. Seventeen import-substituting investment projects have been agreed upon at the governmental level, thirteen have been approved for funding, and as of July 21st, banking facilities concluded for eleven. Details of future projects have not been disclosed.

What is known is that funds will be received by OJSC Gomselmash for comprehensive modernisation alongside the Minsk Bearing Plant, the Minsk Gear Plant, the Vitebsk Vistan, and BelAZ. Belarus and Russia are investing equal amounts in a project to produce a 19-seat aircraft within 4-5 years, but the total amount has not yet been disclosed.

Officials are excited about the benefits of Western sanctions and how well import substitution projects are proceeding. For example, the governor of the Kemerovo region, Sergei Tsivilev, speaks enthusiastically about local assembly of BELAZ trucks. Belarus also aims to increase exports of elevators and elevator equipment to Russia.

There are no concrete examples of import-substituting products in Russia and Belarus. All import substitution reports are at the level of concepts and preliminary financing, even though almost a year and a half have passed since the beginning of the Russian military operation in Ukraine and nearly ten years since the Belarusian and Russian leaders began to speak of import substitution and technological modernisation.

On July 23rd, Lukashenka and Putin met in St. Petersburg to discuss security issues, the international situation, and economic cooperation. Lukashenka presented a map of alleged Polish troop movements along the borders of the Union State and suggested that the governments of Belarus and Russia devise a “self-reliant” economic plan.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.

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