Belarus' PM says Belarus will lose 30% of exports this year

Belarus' PM says Belarus will lose 30% of exports this year
Belarusian fertiliser cargo recently seized by Ukrainian authorities in Mykolaiv, Ukraine. /
By bne IntelliNews May 30, 2022

Belarus is set to lose 30% (approx. $14bn) of its export revenues in 2022 due to western sanctions, Belarusian First Deputy Prime Minister Nikolai Snopkov told state media on Wednesday, 25 May.

According to Snopkov, the negative influence of the sanctions has been increasing: "starting from June, the premium European market will be closed to timber, ferrous metals and products made from them, cement, tyres, and it's some $1.8bn of export revenue."

Belarus’ industrial sectors and its large GDP generating enterprises are being hit the hardest, especially wholesale and cargo transportation. In the service sector, banking and tourism are the hardest hit, and “construction has been affected by the sanctions indirectly, through a shortage of financial resources due to the closure of external financing and the narrowing of domestic sources”.

Belarusian officials’ public communications have in recent weeks become more open about the broad and hard-hitting effects of sanctions.

As a result of the EU banning Belarusian registered trucks from entering its member states, 30% of Belarus’ car fleet stands idle, and over the past four months its road haulage services have decreased by 9%.

Ukraine has begun to more or less completely terminate economic relations with Belarus due to the latter regime’s active support for Russia’s invasion. Previously, Ukraine’s Black Sea ports have been crucial for Belarus’ exports, but since Russia began its invasion all rail trade between Belarus and Ukrainian ports has stopped.

In 2021, Belarus sent 9% (about 12mn tonnes) of its total railway transport through Ukraine, out of which 45% was various petroleum products, with the rest being fertilisers, coal, timber, construction products and more.

On May 17, Lithuanian railways notified its Belarusian counterpart that it would terminate the transportation of all timber, rubber and ferrous metals products due to sanctions. Together, the loss of both the Lithuanian and Ukrainian export routes has cost Belarus 26mn tonnes of cargo.

Currently, Western sanctions are blocking about 40-45% of Belarus’ exports. Belarus’ recent assessment of losing 30% of its exports by the end of the year must therefore include an assumption of 10-15% of its exports reaching its destinations through new export routes.

The last time Belarus faced such a large export decrease was during the coronavirus (COVID-19) pandemic. The difference then was that trade managed to resume again after just a year of global logistical chaos. The sanctions restrictions can, however, be assumed to remain in place longer than that.