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The Effect of the Russian-Ukrainian War on the Belarusian Economy

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Five months have passed since the war between Russia and Ukraine began. In addition to the loss of life and property in the process, it can be said that the economies of both countries were adversely affected by the process. In addition, Belarus, which draws attention with its closeness to Russia and has been trying to consolidate its integration with this country, profoundly feels the negative consequences of the war. Belarus ‘support of the policy that does not allow pro-Western formations in Russia’s immediate surroundings and its side with the Moscow administration in the ongoing war in Ukraine has caused the country’s already problematic image in the West to worsen.

As it will be remembered, Belarusian President Aleksandr Lukashenko won the Presidential Elections held in 2020 in a “questionable manner,” as the Western states put it, and the West showed a great reaction to this situation. Thereupon, Lukashenko preferred to accelerate the integration with Russia. As part of the integration process, joint military exercises and economic agreements were made between the two countries. After Russia entered the war with Ukraine, Belarus did not display an anti-Moscow attitude. Moreover, the Minsk administration allowed the deployment of Russian military elements on its territory from the first days of the war. Due to this situation, the image of Belarus in the West has worsened, and therefore the country has been exposed to economic sanctions like Russia.

Before the war between Russia and Ukraine began, the economic conditions of Belarus were improving by gaining an upward momentum; After the war, the situation in question started to work in reverse for Belarus. The international sanctions imposed by the West and the United States of America (USA) for their support of Russia have caused the country’s economy to be shaken. As of March 2022, a decrease was observed in the Gross Domestic Product (GDP) of Belarus. Similarly, a significant contraction was observed in industrial production in February-March of the same year. Inflation, added to this negative picture, reached the highest level in the last seven years in March 2022 and reduced the purchasing power of consumers. In the second quarter, the GDP continued to decline, and the Western sanctions negatively affected the Belarusian economy.[1]

In May 2022, Deputy Prime Minister of Belarus Nikolai Snopkov stated that their country’s exports fell by 30% in 2022 and expected their export income to decline to 14 billion dollars due to the sanctions. In addition, Snopkov said that the sanctions directly affected 20% of the economy and caused a 2.3% decrease in GDP in the first quarter. Moreover, the Deputy Prime Minister of Belarus argued that the West’s ultimate plan is to deteriorate the living standards of the Belarusian people, weaken critical sectors of the economy and thus cause social movements. Snopkov formulated the way out of this bottleneck by increasing exports with Russia by 40%.[2] Belarusian Prime Minister Roman Golovshenko stated that the sanctions imposed on the country as of May 2022 prevented exports of 16-18 billion dollars to the West.[3]

After the start of the Russia-Ukraine War, economic experts sharply lowered their growth forecasts for Belarus. Belarus ‘GDP is expected to contract further due to Western sanctions and war. It is thought that this situation will lead to a broad-based slowdown in the country’s economy.[4] In fact, the statement of the Belarusian National Statistics Committee that GDP fell by 4.2% between January and June 2022 confirms this assumption.[5]

Minsk is making several moves to prevent this negative economic picture that dominates the country from deepening and turning into a major crisis. In this framework, Belarus is trying to develop its economic relations with Central Asian and Caucasian countries, especially Russia and China. Belarus ‘application for full membership in the Shanghai Cooperation Organization (SCO) can be cited as an example of these efforts.

Belarusian economy, which has started to contract, wants to open to the Eurasian market by providing full membership to the SCO. In addition, it aims to save its country from the economic bottleneck with the power it will gain from the market.[6] Moreover, the Minsk administration maintains tight relations with the Eurasian Economic Union (EAEU). As a matter of fact, on the draft agenda of the Eurasian Intergovernmental Council Meeting to be held in Cholpan-Ata, Kyrgyzstan on 25-26 August 2022; priority integration infrastructure projects in transportation, financing of industrial cooperation, establishment of Eurasia Reinsurance Company and preparation of an international agreement envisaging the creation of a common gas market.[7] Belarusian authorities plan to make economic gains from this meeting.

As an example of Belarus’ alternative orientations, Director of the National Center for Marketing and Price Studies Nikolai Borisevic, Georgia’s Ambassador to Belarus Valeri with Kvaratskhelia the meeting to discuss cooperation between Belarusian and Georgian companies can be shown. The parties agreed that the marketing agencies of the two countries could facilitate collaboration between businesses. In addition, the conditions for allowing[8] Belarusian companies to participate in tenders on Georgian territory were also discussed at the meeting.

As a result, the prolonged war between Russia and Ukraine and the imposition of sanctions on Belarus deeply affected the economy of the country in question. On the other hand, the Minsk administration is trying to increase its relations with the Eurasian states, especially Russia and China, in the face of this economic crisis it started to cause. If the Minsk administration can get the support, it seeks from Moscow and Beijing; it is possible that Eurasia will emerge as an economic bloc. If these relations do not give the expected result, a chaotic process in which social and political problems will increase in parallel with the financial crisis in the country seems inevitable. And this may bring the belief in Eurasian-centered cooperation quests to be opened to discussion.

[1] “Gross Domestic Product in Half-year 1 2022”, National Statistical Committee of the Republic of Belarus, https://www.belstat.gov.by/en/o-belstate/news-and-events/news/gross-domestic-product-in-half-year-1-2022/, (Date of Accession: 19.07.2022).

[2] “Belarus to Lose 30% of Exports to Western Sanctions in 2022”, Zawya, https://www.zawya.com/en/world/russia/belarus-to-lose-30-of-exports-to-western-sanctions-in-2022-c5llqsm7, (Date of Accession: 19.07.2022).

[3] “Western Sanctions Block $16-$18 Billion Worth of Belarusian Exports to EU, U.S., Prime Minister Says”, Reuters, https://www.reuters.com/world/europe/western-sanctions-block-16-18-bln-worth-belarusian-exports-eu-us-pm-2022-05-16/, (Date of Accession: 19.07.2022).

[4] “Belarus Economic Outlook”, Focus Economics, https://www.focus-economics.com/countries/belarus#:~:text=FocusEconomics%20panelists%20project%20the%20economy,expected%20to%20fall%20%2D0.4%25., (Date of Accession: 19.07.2022).

[5] “Gross Domestic Product in Half-year 1 2022”, National Statistical Committee of the Republic of Belarus, https://www.belstat.gov.by/en/o-belstate/news-and-events/news/gross-domestic-product-in-half-year-1-2022/, (Date of Accession: 19.07.2022).

[6] Perizat Rysbekkizi, “Belarusian Request to Become a Full Member of the SCO”, ANKASAM, https://www.ankasam.org/belarusun-sioye-tam-uye-olma-istegi/, (Date of Accession: 19.07.2022).

[7] “Draft Agenda of Eurasian Intergovernmental Council Meeting Approved”, Belta, https://eng.belta.by/economics/view/draft-agenda-of-eurasian-intergovernmental-council-meeting-approved-151806-2022/, (Date of Accession: 19.07.2022).

[8] “Belarus -Georgia Business Contacts Discussed in Minsk”, Belta, https://eng.belta.by/economics/view/belarus-georgia-business-contacts-discussed-in-minsk-151895-2022/, (Date of Accession: 20.07.2022).

Hüseyin YELTİN
Hüseyin Yeltin, Sakarya Üniversitesi İktisadi ve İdari Bilimler Fakültesi Uluslararası İlişkiler Bölümü mezunudur. Yüksek lisans eğitimini de Sakarya Üniversitesi Sosyal Bilimler Enstitüsü Uluslararası İlişkiler Anabilim Dalı'nda tamamlayan Yeltin, halihazırda Anadolu Üniversitesi Sosyal Bilimler Enstitüsü Siyaset Bilimi ve Uluslararası İlişkiler Bilim Dalı'nda doktora eğitimini sürdürmekte ve ANKASAM'ın çalışmalarına da katkıda bulunmaktadır.