May 23 – May 29, 2022
Belarus-West relations

The Belarusian regime is trying to justify participation in aggression and soften Western sanctions

The situation has not changed

The Belarusian regime continues to rhetorically distance itself from the Russian invasion of Ukraine but takes no concrete steps. Meanwhile, pressure from Western sanctions is growing, and Minsk has grasped the severity of the consequences. Attempts to circumvent and mitigate sanctions have not yet brought any tangible success.

The Belarusian regime continues to try to manoeuvre to ease Western sanctions. To this end, Lukashenka sent a letter to UN Secretary-General Antonio Guterres explaining his position on the Russian-Ukrainian war. He said that Belarus is neither an aggressor nor a traitor. He also called for action to prevent the war in Ukraine from escalating into a world war, by which he meant ceasing to supply weapons. Lukashenka insists that any settlement should include Belarusian participation and security guarantees.

His intervention is motivated by growing recognition in Minsk of the situation’s complexity and negative consequences for the Belarusian economy. According to estimates by First Deputy Prime Minister Mikałaj Snapkoŭ, suffocating sanctions have already blocked 20% of the Belarusian economy via direct bans on exports, restrictions on the supply of technologies and equipment, disconnection from SWIFT of several large banks, a ban on operations with the National Bank, and restrictions on access to financial markets. In four months, Belarus lost 2.3% of GDP, directly attributable to sanctions. The premium European market will close to wood, ferrous metals (and derived products), cement, and tyres from June, constituting about USD 1.8 billion in export earnings. In general, sanctions restrictions and the loss of the Ukrainian market are estimated at a USD 14 billion loss of export revenue by the end of the year and about a 30% decline in exports.

The largest and most promising markets for reorientation of exports are Russia and China. Almost 60% of goods were shipped to these two countries in March. Belarus plans to increase exports to Russia by nearly 40%, or USD 6.4 billion cf. 2021. In China, an export application for goods totalling USD 2 billion is being negotiated for the current year.

The sanctions imposed by the European Commission against Belarusian and European carriers left about 30% of the Belarusian fleet idle. As a result, the cargo turnover of vehicles over four months decreased by 9%, while, in general, the volume of cargo transported in April 2022 fell by 24.3% compared to the same period last year. The most significant decrease occurred in aviation and pipeline transport. Transportation by pipelines for four months decreased by 24.9% to 26.67 million tons, and by air transport, by four times to 3.8 thousand tons.

The Belarusian Railways lost 26 million tons of cargo, including 12 million tons, to Ukraine. From June, the impact of sanctions on Belarusian Railways will increase, as Lithuanian Railways terminate transportation of Belarusian woodworking products, rubber and metals, which were previously included in the EU sanctions package.

Meanwhile, negotiations are underway with Armenia, Kyrgyzstan, Kazakhstan, Azerbaijan, Georgia, Uzbekistan, Turkey, Turkmenistan, Tajikistan, Russia, and China to increase cargo transportation permits. Negotiations with the Russian Federation on the abolition of permits and the implementation of cabotage transportation on Russian territory have resumed.

However, Belarusian attempts to circumvent the transport blockade with the help of friendly countries are not always successful. Belarusian road carriers faced problems in Kazakhstan because a transfer/transhipment scheme introduced in response to European sanctions conflicts with Kazakh legislation. Transhipment from a third country that is not the point of departure or destination for cargo to the Republic of Kazakhstan is prohibited if customs transit has not yet been completed. The prohibition also applies to transfer to a Kazakhstani vehicle or a vehicle not registered in the same country as the original carrier.

Minsk continues to raise the topic of lifting sanctions in exchange for the transit of Ukrainian grain through Belarus to Lithuanian ports to bypass the transport blockade. This issue will be on the agenda of the extraordinary EU Summit, scheduled for May 30-31st. The advantage of this option is that the railway networks are compatible, but it is unknown what sanctions Minsk wants to be lifted in return. An agreement seems unlikely after the tensions of recent months with Lithuania and Latvia.

Following Russia, a parallel import mechanism may be introduced to circumvent Western technological sanctions, implying supplying goods without the copyright holder’s consent.

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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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