The EU Member States want to quickly introduce economic sanctions against Belarus for the arrest of a journalist Roman Protasevitsj. He was on a flight between the EU countries Greece and Lithuania, when Belarus forced the plane to land and he was arrested.
Sanctions should include aviation and Belarusian companies that finance the regime, said Ursula von der Leyen, president of the European Commission. But how big is the trade with Belarus and what kind of products and companies are we talking about?
Second trading partner
The EU accounts for just under 20 percent of the goods trade between Belarus and abroad. Last year the EU imported for about 3.9 billion euro from Belarus and exported about 6.2 billion.
This makes the EU Belarus’ second trading partner. By far the largest trading partner is neighboring Russia, which accounts for about half. Incidentally, we should not expect any sanctions from Russia: the country defends Belarus’s action.
State-owned enterprises
Much of the Belarusian economy and exports are in the hands of state-owned companies. According to the Belarusian statistical office in 2019 this accounted for about a third of all exports.
Should the EU ban trade with all Belarusian state-owned companies, it would soon be over a billion euros that Belarus would miss out on. And possibly more, because exports by Belarusian state-owned companies have increased significantly recently.
Supplier IKEA
The main Belarusian exports to the EU are wood products such as furniture, fuels and metal products. The export of timber is largely channeled through state-owned Bellesbumprom. That has benefited from lately the shortage of wood. The Belarusian state news agency says exports at Bellesbumprom in the first two months of this year went up by about 15 percent to more than 90 million euros.
IKEA, among others, is said to import furniture from Belarus. According to the Swedish newspaper Today’s News 7 percent of all wood for IKEA furniture comes from Belarus.
Earlier call for boycott
The export of metal is also largely in the hands of a state-owned company: BMZ. There, too, things went well with exports. In the first four months of this year that rose 23 percent, to around 350 million euros.
State-owned enterprises are closely intertwined with the regime of President Lukashenko, who has been in power for more than a quarter of a century. The NOS spoke in March with a former BMZ employee who was fired after participating in a demonstration.
The FNV trade union already called for an end to trade with Belarusian state-owned companies that cooperate in the repression of trade unions and pro-democratic groups in the country. The independent trade union movement in Belarus also supports this call.
‘Belarus becomes pariah’
In addition to trade sanctions, the EU is also introducing aviation sanctions. On Monday, airlines were already called on to stop flying over and to Belarus. KLM, Air France and Lufthansa, among others, responded.
In addition, Belarusian airlines will soon have to be banned from European airspace and airports. Belavia will be badly affected by this.
According to Jaap de Wit, aviation economist, the measures make Belarus a pariah. “The country is much more difficult to reach and that has economic consequences.” Belarus is also missing out on charges it receives for entering its airspace. According to Eurocontrol, the European air traffic control organization, the charges amounted to 85 million euros in 2019.
Weaken economy
“Until now, sanctions against Belarus were not aimed at weakening the economy, also because you do not want to affect the population too much,” says Bob Deen of the Russia and Eastern Europe Center at Institute Clingendael.
“But now the EU wants to hit Lukashenko harder in his wallet, so that it becomes too expensive for him to continue to misbehave. However, that is quite difficult to do well; you also want to avoid putting Belarus further into the arms of Belarus. Russia floats. “
According to Deen, sanctions against specific state-owned companies can work over time. “You then deprive Lukashenko of income in foreign currency. This could put pressure on the Belarusian ruble and the state budget. And he cannot just sell products that he cannot sell to the EU to Russia.”
–
