Sanctions pressure on Belarus by the West keeps gaining momentum
Having failed to recognize the legitimacy of Alexander Lukashenko, the EU, USA and a number of other Western countries have once again become a united front and passed from political to the economic offensive against the official Minsk. At the same time, the issues of human rights and freedoms, which had previously been claimed in Brussels and Washington, are increasingly receding into the background, demonstrating the true purpose of the restrictions.
Over the past year, sanctions have been imposed against Belarusian officials, representatives of state media, heads of state organisations, judges, employees of law enforcement agencies, as well as state-owned enterprises. In the summer, the EU took an unprecedented step by imposing sectoral restrictions on the oil refining and tobacco industries, the banking sector and potash fertilizer production. Despite the fact that most of the sanctions will not take effect until late this year or early next year, it could not help but affect the Belarusian economy, which in the first half of the year showed unprecedented growth amid the recovery of global markets. Belarusian officials, who cheerfully report about the success of the industry and agriculture, as well as about the growth in exports, periodically remarks about the country’s current and future losses connected with the Western restrictions. As deputy head of the presidential administration Dmitriy Krutoy stated earlier, sanctions will seriously affect Belarusian exports of energy and petrochemical products, and the country may miss out on $250-300 million a year.
The West dealt a new blow to Belarus on December, 2, when the EU imposed the fifth package of restrictions, and the USA, Great Britain and Canada announced about the expansion of their sanctions lists. Nineteen Belarusian companies fell under the restrictions, and with them virtually all the major sectors of the Belarusian economy. However, even this time, Belarus’ Western partners demonstrated their unwillingness to harm their own interests, seeking only to get rid of competitors in the global markets. In particular, the European Union, which on the whole imposed sanctions against 183 persons and 26 Belarusian organizations, this time decided to hit the state-owned enterprise Belorusneft, producer of nitrogen fertilizers Grodno Azot, Belshina and the long-suffering Belavia airline, which has even been disconnected from international settlement systems for passenger and cargo air transportation, travel agency Centrkurort, the capital hotels Minsk and Planeta, as well as a separate service of active measures and the Syrian airline Cham Wings. However, as in the case of the sectoral sanctions imposed in the summer, the restrictions apply only to new contracts, and work on previously concluded contracts is not prohibited.
The United States followed a similar path, which, by expanding its lists, gave American companies until 1 April 2022 to complete all deals with Belarusian counterparties. What is remarkable in this case is that Washington did not just copy the EU list this time, targeting the potash industry and the military-industrial complex (MIC) of Belarus. Restrictions were imposed on companies trading Belarusian potash fertilizers Belarusian Potash Company (BPC) and its subsidiary in Ukraine Agrorozkvit, Mikhail Gutseriyev’s Slavkaliya, and defence companies Beltechexport, 140 Repair Plant and Peleng. The lists symbolically include some travel agencies and the President’s Sports Club, which is headed by the son of Alexander Lukashenko, Dmitriy. Most bizarre was the US imposition of sanctions against Il-76TD transport aircraft and the Agusta-Westland AW-139 helicopter owned by Slavkali. The Canadian and UK restrictions proved to be almost identical in nature to the US and European ones, albeit with some peculiarities that do not significantly affect the situation. In each case, the Western countries took care of their own interests, leaving loopholes for their companies. As they say, “business and nothing personal”.
The reaction to the new wave of pressure in Minsk was rather ambiguous. On the one hand, President of Belarus Alexander Lukashenko said, even before the introduction of the fifth EU package, that all losses of the country from the restrictions were “minuscule” and he did not count them. The head of the government of the republic after 2 December called the new sanctions unprofessional and bewildering, noting that there is nothing terrible in them. Various pro-government analysts, political scientists and journalists unanimously stated that the sanctions will only strengthen the country’s economy, which will find a replacement for Western markets.
On the other hand, top Belarusian officials have in fact admitted in their statements that the situation is developing in an extremely negative scenario. According to various estimates, Belarus’ losses may amount to 3 to 10% of GDP, and it will be extremely difficult to replace such a volume with Russian or Chinese destinations in the foreseeable future. Especially if the U.S. decides to impose secondary sanctions against the counterparties of Belarusian enterprises, as well as to put pressure on European financial structures, which are in one way or another linked to U.S. banks. An example of such a development is the announcement of the German Deutsche Bank’s discontinuation of settlements in dollars and euros with Belarusian state banks and enterprises. This may well affect not only the investment sector, but also the banking system of Belarus, causing serious damage to it.
The negative developments, as well as the unwillingness of the West to compromise, have already caused frustration in Minsk, especially against the background of the recent attempts of the Belarusian authorities to extinguish tensions in their relations with Brussels. Belarusian Foreign Minister Uladzimir Makei even made a rather unexpected statement that many analysts saw as an ultimatum. Following the meeting of the OSCE Ministerial Council in Stockholm, the head of the Belarusian Foreign Ministry said that the republic “risks losing its statehood if the sanctions pressure continues. At the same time, he unambiguously hinted that this could lead to the fact that “the European Union would lose Belarus forever,” which “is absolutely not in the interests of Europe.”
As a matter of fact, the statement by the Belarusian minister cannot be viewed as an admission that Minsk is losing to the West, but rather as a warning that Belarus is ready to undertake a more serious restructuring of its foreign policy doctrine and forget about multi-vector orientation, totally reorienting towards integration with Russia. This was later confirmed by an official statement by the country’s Foreign Ministry, which referred to the response to “illegal external sanctions aimed at undermining the sovereignty of Belarus and worsening the well-being of Belarusian citizens. Specifically, it was noted that “as one of the most significant measures to counteract the external pressure of the collective West and strengthen its economic security, Belarus will continue implementing union programs and strengthening economic integration with Russia, as well as building strong trade and economic ties with partners in the EEU and with countries of the far arc.
At the same time, it is noteworthy that official Minsk did not dare to take the drastic countermeasures that the Belarusian president had earlier hinted at the possibility to stop the European transit through the country’s territory, as well as to cut off the supply of Russian energy resources to the EU. This time, the Belarusian Foreign Ministry said it had decided to introduce “a ban on imports into the country of a number of goods originating from the states applying illegal antiBelarusian sanctions”, as well as “retaliatory sanctions against air carriers from the EU and the UK” and an expansion of the list of persons “whose entry to the territory of Belarus and the Union State is undesirable”. On 7 December it became known that Minsk had imposed sanctions on certain foodstuffs imported in the country in the past year amounted to more than 540 million USD. However, it is not clear how significant this blow will be for Western companies, because they are not critical, and the Belarusian market is not critical for these commodities.
Unfortunately, recent events show that today Belarus has no real instruments to put pressure on the EU, let alone the United States. The only exception is transit through the territory of the country, which affects not only the interests of the European Union, but also those of Russia and China, which is building its New Silk Road. The consequences of Minsk blocking the transport flow and supplies of Russian hydrocarbons may be most unpredictable both economically and politically, which Minsk cannot fail to understand. A ban on the import of meat, salt, dairy products, etc., is unlikely to have a sobering effect on the West. Therefore, in this situation, Vladimir Makei’s statement about the possible “loss of statehood” in Belarus with a hint that the Belarusian-Russian integration will continue as long as the Western sanctions remain in force was practically the last argument voiced by Vladimir Makey. Essentially, this means that Minsk is ready to return to its multi-vector policy at any moment, but is waiting for a signal from the West to do so. Whether Brussels or Washington will make such a step, it is difficult to say today, because Western countries have finally formed a unified enemy image for themselves, in which Belarus has become an inseparable part of Russia.
Igor Novitsky, FSK