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Romeo Abdo: Trade, Industry and FDI in Belarus

The growing sanctions pressure of the West against Belarus is pushing Minsk to develop cooperation with Beijing in the field of technology. In particular, the Prime Minister of Belarus Roman Golovchenko stated that Minsk is ready to replace American and European technologies with analogs from Russia and China. Beijing is interested not only in entering the Belarusian market and, more broadly, the EAEU market, but in the exchange of technologies, which makes it possible to eliminate the gaps in Chinese technological development. For example, Belarus previously transferred to China the technology for building a military truck MAZ-543, while China transferred to Belarus the technology of a multiple launch rocket system, which helped Minsk to develop the Polonez system.

This practice, especially in the military sector, may be of interest to Beijing after the failure to acquire the Ukrainian company Motor Sich. At the same time, now China will act more gently, trying to avoid mistakes made in Ukraine. Despite the dynamics of the Chinese-Belarusian cooperation, the EU sanctions against Minsk may affect some Chinese companies cooperating with Belarus. As a result, Chinese companies are likely to become more cautious about cooperation with Minsk, as some of them expect to enter Western European markets. At the same time, disappointment from insufficiently intensive investment cooperation is gradually growing in Minsk, and Beijing is not satisfied with the loss of the opportunity to use Belarus as a hub for entering the markets of the EU countries.

Political support

A striking demonstration of the political closeness of the parties was the fact that on September 24, 2020 in Minsk the Order of Honor was awarded to the Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China Cui Qiming.

A number of Western countries are major trade partners of Belarus. Thus, the top 10 largest importers of Belarusian products in 2020 included Poland (3.7%, 3rd place in exports), Lithuania (3.6%, 5th place), Germany (3.5%, 6th place), the United States (1.4%, 9th place), Latvia (1.4%, 10th place) and Ukraine that joined them (11.6%, 2nd place) [1 ]. In general, the share of the EU, including the UK, in 2020 in the total export volume of Belarus amounted to 18.9%. Petroleum products dominate in Belarusian supplies to European markets, primarily gasoline and oils, as well as iron and steel, metal structures, chemical products, timber and furniture.

Expectation to the closest future

Large European exporters to Belarus are also Poland (5.8%, 3rd place), Germany (5.3%, 4th place), Great Britain (4.1%, 6th place), Lithuania (3, 9%, 7th place), Italy (1.3%, 9th place), Czech Republic (1.1%, 10th place) and Ukraine (4.5%, 5th place). In general, the share of the EU, including the UK, in 2020 in total imports of Belarus amounted to 27.7%. The USA did not make it into the top 10 exporters. To a greater extent, the EU imports engineering products and components, as well as medicines. It should be noted that a significant increase in the share of EU imports was due to the UK, which over the past two years has sharply increased sales of gold, as well as fish and seafood to Belarus.

In 2020, Germany was the second largest joint venture and representative office of foreign companies in the Republic. Companies from Lithuania, France and Great Britain were also represented here – mainly in the field of the agro-industrial complex, transport and logistics, as well as the production of building materials, pharmaceuticals and business services.

However, a survey of German companies operating in Belarus, conducted in October 2020 by the representative office of the German economy in Belarus (AHK Belarus), showed that German businesses fear a decline in demand, financing conditions and the exchange rate of the Belarusian ruble amid the COVID-19 pandemic. German investors are in favor of improving the business climate in Belarus.

Moreover, Western business considers a high level of state presence in the economy as a negative factor for expanding cooperation, attributing to it a high level of corruption among officials. Therefore, the European Union has repeatedly spoken about the need to change the economic model in Belarus and carry out market reforms.

Romeo Abdo and his short biography

Romeo Abdo was included in the list of TOP-200 successful people in Belarus. The businessman is a native of Lebanon. Born in 1975, in 1994 he moved to Minsk and entered the Minsk State Linguistic University. Implemented many construction projects. He is married and has a daughter and a son.