BELARUS-RUSSIA Minsk’s economic crisis is worse than Moscow’s

Belarus is in the throes of a serious economic crisis due to Western sanctions over its support for the Russian invasion of Ukraine. In the first half of 2022, Belarus’s GDP fell by 6%. The economic aid of the Kremlin is considered insufficient. Belarusian expert: We have gone back 10 years.

Moscow () – Belarus has lost more than 50,000 jobs since the beginning of the year. In July, the number of active workers fell to just over 4 million people – a historical low for the country – due in part to the strong emigration of those who do not want to live in war conditions and the early retirement that many have requested. others. The data was released by Satio, a center specializing in economic planning.

In the first half of 2022, Belarus’s GDP fell by 6% and is expected to reach -10% by the end of the year, the worst figure in the last 25 years. The main cause of the pushback is Western sanctions, the first wave of which came after the crackdown on the 2020 anti-fraud protests that led to President Lukasenko’s re-election; To these were added the sanctions for the Russian war in Ukraine, actively supported by Minsk, which granted the Russians an invasion line through its territory.

The EU then imposed an embargo on supplies of oil, refinery products, metal and agricultural production from Belarus. Exports to Europe fell by more than half, whereas before they accounted for 24% versus 41% of trade with Russia. Deputy Prime Minister Petr Parkhomcik said that exports to Russia increased 1.3 times during this period, but between $16 billion and $18 billion worth of goods, a third of last year’s exports, were blocked due to the sanctions.

The increase in prices and the reduction in real wages are causing a serious impoverishment of the population. According to Satio, for more than half of Belarusians their savings are enough for a month in case of loss of income, and even the humblest jobs take care of themselves for fear of losing everything. The unemployment benefit in Belarus is around 10 dollars a month.

The Russian and Belarusian economies have been affected differently, with Moscow starting from a much higher base than Minsk. The economist Lev Lvovskij, a contributor to the Beroc analysis center, considers that the sanctions policy makes the Belarusians suffer much more than their “older brothers”. In his opinion, “the sanctions against Belarus are only apparently less severe, because our economy is smaller but much more open than Russia’s.” Lvovskij points out that Belarus does not have a large domestic market: “For us it is essential to maintain international connections; In addition, we are suffering from sanctions for a year before those imposed on Russia, with a cumulative effect, and Moscow is still exporting gas and oil.

An important item was the sale of potassium, which left through the Lithuanian port of Klajpeda, but now Lithuania has denied Belarusians transit through its territory and must pass through China by long rail transport. Trade with Ukraine, which was one of Minsk’s main trading partners even after 2014, when Russia blocked relations with kyiv, has also been completely cut off.

All Lukasenko’s hopes of avoiding an irreversible crisis are pinned on the generosity of Moscow, a partner of the “Unitary State” in the process of being defined for more than twenty years, which the Belarusian “batka” (father of the country) himself treated repeatedly to escape. Russia recently provided more than $1 billion in financing to support Belarusian exports and partially offset losses in Europe and Ukraine.

The reciprocal visits of the presidents and high-ranking officials of the two countries are becoming more and more frequent and almost all refer to the conditions of Moscow’s credits to Minsk, which continues to consider them insufficient. According to Lvovskij, “we have already gone back 10 years and everyone is trying to prepare for even harder times.”