“How we felt that times would be difficult,” said Alexander Lukashenko, who flew to Vladimir Putin to discuss the sanctions pressure. It is harder for Belarusians than for the rest of the post-Soviet space – they used to live under restrictions. But Lukashenka calls what the West is doing now “disgusting”, although he still believes that new opportunities are opening up.
Get used to the bad
Sanctions against Belarus began to be actively introduced after the presidential elections in August 2020. For a year and a half, the airspace over Minsk was closed, dozens of state-owned companies were blacklisted, hundreds of officials became restricted to travel abroad. However, the state has not yet faced such large-scale restrictions as after the start of the military operation in Ukraine.
But Lukashenka encouraged the delegation meeting him at the airport: “Don’t worry, you! Everything will be fine.” The last time he came to Moscow was quite recently, on February 18. Then the parties discussed the development of bilateral relations and issues of further alliance. This time, the main topic was “interaction under sanctions pressure.”
Before the official start of the meeting, the leaders of the two countries exchanged thoughts on the ongoing events. “I have said more than once that both the Russian Federation and us (Belarus. — Ed.), all the more so, are always under sanctions. Today they are more ambitious, but we are already used to this, excuse me, the piggy of the West,” Lukashenka said. He called the actions of the US and the EU “illegitimate”, “illegal” and contrary to all norms of international law. “I’ve already had enough of this, and you’ve already eaten,” the Belarusian leader added.
This time, in addition to new personal sanctions, they banned the supply of dual-use goods that can be used in the military and defense industries. The export of tobacco, mineral fuel, bitumen, potassium chloride, cement, iron, rubber products and wood has been stopped. Restrictions on the main export industry of the country – potash fertilizers – were introduced by the EU in the summer of 2021, but with certain exce-ptions. Now this source is completely blocked.
The largest international companies, including the Swedish IKEA, the H&M clothing brand, Airbnb and Booking.com, are leaving the republic en masse. Hollywood film studios stopped the distribution of their films, and, most importantly, the world logistics companies left the Belarusian market, which will significantly increase the prices for all supplied products. In the near future, Belagroprombank, Dabrabyt Bank and the Development Bank of the Republic of Belarus will be disconnected from the SWIFT system.
Lukashenka acknowledged that the pressure is very tangible, but there are sectors that the EU cannot do without. “Wood is the most valuable resource for our country. And no matter what sanctions are imposed against us, there is not enough wood in the world. Not by washing, but by rol-ling it will be asked, bou-ght. And the European Uni-on, and our southern states, and neighbors,” believes is he.
In general, the Belarusian leader demonstrated in Moscow that he was in a “normal mood”: “We will do better than we have always had after the collapse of the Soviet Union and even in the Soviet Union. The situation is not one for us to sweat and worry about.”
Bela-Cola will replace Coca-Cola
“I remember how in the 90s I typed payment orders on a typewriter and took it to the bank myself in a VAZ-063, rear-wheel drive car… Do you think you can scare me by disconnecting from SWIFT?” The chairman of the Association of Small and Medium-Sized Businesses said in a conversation with RIA Novosti ( Minsk) Sergey Balykin.
Belarusian companies are experiencing difficulties with settlements, deliveries of imported products and components are dela-yed, trade with Ukraine has stopped, the transport ind-ustry is suffering significa-ntly, the owners of which must pay salaries to dri-vers while trucks at the border are waiting for clearan-ce. All this increases costs and reduces competitiveness.
“Any restrictions on freedom of trade hit businesses,” says Balykin. overcome these restrictions. We are still alive, but we are seeing a reduction in the hotel segment, there are significantly fewer restaurants and cafes, the tourism industry is going through difficult times, close to disaster.”
He admitted that the Belarusian market will be able to reorient itself towards the countries of the East. “Then let’s move on to barter settlement. Perhaps money will cease to be of serious interest and material values will increase. The notorious fintech will leave, there will be less crypto, you will have to engage in real production. Every problem has a solution that can be considered as a potential opportunity. No Coca-Cola – This means that there will be a Minsk plant of soft drinks,” Balykin added.
Small companies focused on the domestic user and purchasing materials in the domestic market do not yet feel the negative consequences of the sanctions. The woodworking w-orkshop WoodBots (Minsk) said that they did not notice a decrease in purchasing p-ower, since the number of customers “does not fall fr-om month to month.” “Ho-pefully there will be no ch-anges,” the company said.
One of the sewing workshops (the name was asked not to be advertised due to the risk of losing customers) reported that there were difficulties with the d-elivery of fabrics. The company is forced to halve the salaries of seamstresses to stay afloat. “Suppliers have raised prices: some by 20 percent, others by 50 percent. I talked with our lar-gest partner. Everything w-ent through Ukraine, even Turkish materials. Now th-ey are looking for new w-ays, but there are no special ideas. Now people don’t want to spend money.”
There will be no default
However, talk about a possible default by Belarus is too reckless, says economist Yaroslav Romanchuk. The fact is that there are no tools for predicting the situation yet, although it is ob-vious that the Belarusian ruble, along with the Russi-an one, will “get stiff”.
“In Belarus, there are no indicators for measuring inflation, since prices are regulated. But it is already clear that a collapse of a number of areas is worth waiting for. who would not be affected by the sanctions,” Romanchuk lists.
The republic has reserves to pay off debts, but it is not clear how it will dispose of them. “It’s like chess, where there are many unknown moves,” the economist compares. And he adds: “More than 80 percent of the population today are city dwellers. The country has long forgotten how to conduct production in the household.”
It is noticeable that men of military age who are afraid of declaring martial law in the country, as well as employees of the IT sector, are leaving Belarus. Be-larusian political scientist Valery Karbalevich noted t-hat huge queues are lining up at passport offices, emb-assies and visa centers, pla-ne tickets to Tbilisi, Istan-bul and Yerevan are bought out a month in advance.
At the same time, Karbalevich recalls that 60 percent of the state’s external debt is Russian loans. Perhaps Moscow will provide economic support to Minsk in a difficult situation and delay payments.
One way or another, international analysts predict difficult times for the Belarusian economy, but so far the republic has found solutions. And now Lukashenka invites all the CSTO and EAEU countries to unite, sit down at the negotiating table and build a common economic policy: “And, believe me, in a month we will forget that there are these sanctions.”