Belarus and Russia Announce Joint Projects with Unclear Prospects for Technology Transfer and Financing

Lukashenka visited Moscow to participate in the May 9^th victory celebration and then left for Minsk to participate in similar celebrations. The Belarusian and Russian governments have announced a group of joint projects, without clear prospects for technology transfer and financing. The deficit in the evaluation of trade between the countries exceeded USD 6 billion.

Lukashenka, at the urgent request of the Kremlin, visited Moscow to participate in the victory day holiday, but immediately departed for Minsk, missing the breakfast of the leaders of the CIS countries in the Kremlin. The hasty exit of the Belarusian ‘leader’ is excused by either his state of health, or participation in the events planned in Minsk, as Kremlin spokesman Dmitry Peskov explained.

After the holiday, regular service was restored as the governments of Belarus and Russia returned to the issue of import substitution. On May 12^th, the head of the Russian Ministry of Industry and Trade, Denis Manturov, and the Prime Minister of Belarus, Raman Halouchanka, discussed joint projects in the fields of microelectronics, transport engineering, chemical, power, pharmaceutical and other industries. They agreed that over the next two months it is necessary to prepare a comprehensive program for expansion of the production of aircraft for regional aviation.

Of the three basic questions regarding the implementation of these projects, the answer to only one is known – who will manage them – naturally, Belarusian, and Russian high-ranking officials. The answers to other questions are unknown: (a) where does the funding come from, are there any alternatives besides the Russian budget; (b) what are the sources of technology transfer (Russia and Belarus proper, China?); (c) Is there a sales and marketing policy for finished products at least in its infancy? As usual, there are no answers to these questions. Belarusian-Russian projects have been and remain “scribbles on paper”, transferred to high authorities in order to designate activities without considering actual output.

In the year since the governments of Belarus and Russia began import-substitution activities, not only have no results been announced, but there are no initiatives that could be described as “encouraging” or “progressive”. At present, there is no import substitution outside of the military-industrial sphere. Whether it will appear in the future remains mysterious. It is quite possible that without external (Chinese or Western) financial and technological transfers, this task will be unrealisable in principle for the Union State.

The Belarusian government, however, remains optimistic: according to Belarusian Prime Minister Raman Halouchanka, the countries have not only withstood economic pressure, but are embarking on a new growth trajectory with stable dynamics of mutually beneficial cooperation. Mutual trade, last year (according to him) exceeded USD50 billion (and according Russia reached USD 43.4 billion), and this year maintains momentum and grew by 22% in the first quarter.

What explains the increase is not yet clear, though it may be due to the progressive fall of the Belarusian rouble against the Russian. There is no accurate and balanced data on this yet. It is important to note that the difference in the measurement of trade turnover exceeds USD 6 billion, which is significantly more than Lukashenka usually annually begs Moscow for loans and energy subsidies. Nobody knows where the USD 6 billion went.