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Economic integration and rapprochement towards European Union policy

23.06.2009  |  Publications

The European Union Eastern Partnership Initiative initially proposed in 2008 by Poland and Sweden is regarded as the main instrument of the European Union to expand its political and economic influence over the territories of the Former Soviet Union. Closer cooperation provides with an opportunity to secure stability in the European region, to expand the area of security and wellbeing as well as to guarantee economic and energy security in the European Union as well as in the partner countries.

Belarus has good European perspectives

The Hungarian Ambassador to Belarus Mr. Ferenc Kontra believes that “ Belarus has lost quite a lot in the past years due to its self-isolation policy. While Russia, Ukraine and other countries were promoting first of all their economic relations with Europe, Belarus was falling behind. Therefore the Eastern Partnership is a historical opportunity for Belarus to catch-up in a short term period”.

 

The Director of the Belarusian Institute for Strategic Research Vitaly Silitsky believes that “it is a matter of principle for Belarus that the Eastern Partnership became the institutional framework, the basis that could facilitate attraction of foreign investment and to expand its trade relations with the European Union”.

 

A Russian political expert and the Chief Editor of a magazine “Russia in the global politics”, Fedor Lukyanov (nota bene that Russia is not a partner to the Eastern Partnership Programme, which includes Belarus, Azerbaijan, Armenia, Georgia, Ukraine and Moldova) thinks that Belarus has very good European perspectives, that it is the most beneficial and suitable partner for the European Union, “the paradox is that if there is an ex-Soviet Union country that would be ideal for the integration in to the Western institutions, firstly into the European Union, it would be Belarus. It is a compact monotheistic country of the ‘European’ size and culture with well-educated population, that does not have oligarchs and does not suffer the consequences of the privatization”.

 

Economic policy – towards the West

 

Today the cost of all ongoing projects between Belarus and the European Union (not taking into account Programmes of regional support and cross-border assistance) is around 40 million Euro. This figure was voiced in the course of a round table meeting “The Eastern Partnership of the European Union: Perspectives for Belarus” by the Charge d’Affaires of the Delegation of the European Commission to Belarus Mr. Jean-Eric Holzapfel. While talking in particular about the trade cooperation, Mr. Holzapfel noted that as of today the only active agreement between Belarus and the European Union was the old Agreement on trade of textile goods of 1993 and he added the Partnership and Cooperation Agreement between Belarus and the European Union was frozen in 1995. In the meanwhile the Eastern Partnership Programme offers to Belarus significantly wider opportunities for economic growth.

 

For Belarus the rapprochement with the European Union countries has recently became of extreme importance. In the light of the world economic crisis, as well as after the recent exacerbation of the relations with Russia (so-called “milk wars”, gas issues, losses of export markets for Belarusian goods in the East), directing towards the West in the field of economy and diversification became extremely important. For instance, the negative balance in the area of external trade of the goods and services from Belarus has surpassed 2 billion US Dollars from the beginning of 2009 and increased by 44.6% in April. Economists, experts believe that there is only one solution to this issue, i.e. via re-balancing of the external trade.

 

For Belarus Europe is a gigantic selling market

 

The European Union sets up a long-term task for itself, i.e. to stimulate the creation of a network of profound trading zones between the countries. In the perspective it could also mean a possible creation of the “Economic Union of the EU neighbouring states”

 

In Belarus there is an overproduction of grocery goods that could be supplied to the European markets after being processed. In the view of both the Minsk authorities and Brussels, the participation of Belarus in the Eastern Partnership Programme would be beneficial first of all for the economic integration, energy security and political rapprochement of the country with the European Union Member States.

 

Belarus should significantly increase the expert volume to the European Union countries. The United Europe is a huge community with almost 500 million population and a spanless market. The First Vice-Prime Minister of the Belarusian government Mr. Vladimir Semashko thinks that “ Belarus should think how to supply there more and more, so that the trade opportunities expanded to the extent of the free-trade zone. Moreover, we are interested in returning Belarus into the Common Preferences System at least, and that before 2010 all economic sanctions were lifted from Belarus”.

 

Awaiting for investments...

 

The First Vice-Prime Minister Mr. Vladimir Semashko quoted that in the course of the past seven years the average annual growth of the Gross Domestic Product constituted 9.5%, while the growth rate of capital investment constituted 20-30%. So far the country has been developing at its own cost, from innovation funds and Belarusian banking system. However all the previous achievements were based on equipment and technologies of the past years, that have physically and morally degraded. The Eastern Partnership could assist the Belarusian industry and agriculture to modernize and to re-equip the economy.

 

Belarus is in great need for investment and contemporary foreign and joint venture companies. New enterprises mean new working places, increase of the budget, GDP. In November last year a governmental delegation of Belarus took part in the London Investment Forum. According to the information received from the Deputy Foreign Minister of Belarus Andrey Evdochenko, out of foreign investment attracted in 2008, the share of the European Union constituted 2.8 billion US Dollars (out of 6.5 billion US Dollars of the overall volume of the foreign investment).

 

In the first quarter of 2009 400.3 million US Dollars of foreign investment were attracted for financing investment projects. The state bodies of Belarus provide with the following data: as of 1st June 2009 there were 55 investment projects financed from the foreign investment (that includes organization of the production of the leaf-glass at the “Gomelshklo” factory, renovation of the airplane park of the “Belavia” company, reconstruction of the Minsk Heating and Electricity Station-5).

 

Belarus as a bridge between the East and the West

 

Belarus is often proud and boasting about its transit status however it has not done much so far to use its entire capacity. The today’s issue is not only about the transit of oil an gas to Europe however also about the transit from Russia or from Belarus of the electricity, issue of the increase of the transit of gas (“Yamal – Europa-2”). More over, Belarus also has to develop automobile transit highways. Ukraine is proposing to develop the automobile corridor South-North and to link the countries of the Black and Baltic sea basins. Everyone would benefit from this.

 

Therefore the Eastern Partnership Programme envisages both direct and indirect economic benefits, as well as support to the social sphere. All this should be directed first of all for the benefit of the Belarusian people.

 

The President of Belarus Aleksandr Lukashenko stated that Minsk has a serious and pragmatic intention: to implement concrete road and pipeline construction projects, infrastructure improvement projects, liberalization of trade and creation of free-trade zone, development of a transport corridor that should attract 1 billion Euro of investment, “people need to feel the practical benefits of this Programme”.

 

Ludmila Korsak

info@eurobelarus.info

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