Anton Baltochko: Russia’s inability to sustain economic growth has already impacted Belarus

Russia is no longer able to sustain stable economic growth in the country; that is why supplies of Belarusan large machinery, cars, and tractors are continually reducing.

During the 7 months of 2014 15,1 percent from the whole amount of Belarus’ organizations worked in minus (while in January-July 2013 such entities made up only 9,2 per cent).

The leader in unprofitableness is financial sphere (28,6 per cent), and Belarusan industry is right behind it with 27,5 percent of the unprofitable plants.

What is the situation with the Belarusan industry now, and what is the prognosis for the next year?

This question was discussed with an expert of the Liberal Club Anton Baltochko in the interview with the EuroBelarus Information Service.

- During 7 month the number of unprofitable industrial plants grew from 16.4% to 27.5%. What is going on in the Belarusan industry?

- The main factor that impacts the unprofitableness of entities is the situation at the external markets. Sales of Belarusan goods for export declined; only deliveries of agricultural products grew up a little bit. All that resulted in the recent increase in the number of unprofitable plants.

The second factor is the access to the financial resources inside the country. If earlier unprofitable plants received soft loans and subsidies, now state budget is mostly spent on payment of foreign debts. And loans can be very expensive, especially for plants that cannot guarantee that their products will be sold.

-Belarusan industry is right behind financial sphere in unprofitableness. Strange as it may seem, it is Belarusan giants BelAZ, MTZ, MAZ that are the leaders in unprofitableness. Or it is but natural?

- There is nothing strange in that; the investment goods of these plants were mostly sold to the Russian market, when Russia was able to secure stable economic growth.

Now Russia is unable to sustain stable economic growth, and it can no longer purchase large machinery, tractors, or cars.

- Does it mean that the sanctions of the EU and the US against Russia have automatically affected Belarus’ automobile industry?

- It is not exactly so. The dynamics of stagnation of the Russian industry started long time before the Russia-Ukraine war, long time before the sanctions were introduced; the sanctions only activated the already existing stagnation. If we talk about the prime causes, it was Russia’s economic way and economic model that caused stagnation of industry.

- What is to become with the Belarusan industry in the near future, let’s say, next year?

- It’s a good question, as it hides a lot that lies outside the frames of the Belarusan politics.

Responding to the European sanctions, Russia introduced temporary sanctions for a year; however, they can be abolished preliminary, or, vice versa, prolonged. When it comes to deliveries of agricultural products, Belarus might benefit from the Russian sanctions.

As to the industrial products, Putin has already threatened the West with the possibility of introducing sanctions against Western industrial products. If such scenario is realized, Belarus might benefit even more, simply replacing the machinery that Russia used to buy in Germany and other European countries.

However, everything depends on the politics that Belarus has no possibility to influence.

Belarus can also bear losses related to the curtailment of transit and deliveries to the EU. But anyway, with the right behaviour, Belarus might win in the scope of deliveries.