Belaruskali: A Victim of the Latest Russia-Belarus Economic War?
On 19 August, CEO of Belaruskali, the valuable Belarusian company, Valery Kiryjenka held a press conference on the situation in the global potash market. Kiryjenka criticised Uralkali and hinted that Uralkali keeps trying to make a raider seizure of Belaruskali.
Last month, Russian potash producer Uralkali announced that it would suspend exports through the Belarusian Potash Company. Many have perceived this step as the beginning of a new Russian-Belarusian economic war.
Economic wars remain an important part of relations between Russia and Belarus. By the means of economic wars, Kremlin points the proper place to its younger brother and restricts the independence of Belarus. However, the current conflict differs from the previous ones. For the first time a Russian private company, not a public entity, creates a big challenge for Belarus. The consequences affect not only mutual relations, but the whole world.
The new economic war shows the importance of Belaruskali, which remains the largest taxpayer of the country. Currently the company is undergoing changes. Although Belaruskali will lose part of its profits because of the new war, it will remain an enterprise owned by the Belarusian state. If Uralkali had a chance to acquire the Belaruskali before, the current conflict has buried Russia’s hopes to do so.
Why Uralkali Decided to Divorce
On 19 August, Belaruskali`s CEO accused that the Russian management has transferred a number of the BPC’s contracts to the Uralkali`s own Trader, and then has gone away to work in the Uralkali. Thus, the Belarusian Potash Company lost most of its distribution network abroad.
Last month, Uralkali`s CEO Vladislav Baumgertner said that Belaruskali started selling fertilisers outside the Belarusian Potash Company, which terminates the existing agreement to jointly trade abroad of all meaning. The Belarusian side quickly blamed Uralkali for selling fertilisers through its subsidiary.
the roots of the conflict lie in the difference between aims of Belaruskali and Uralkali Read more
Although both sides exchanged serious accusations, the roots of the conflict lie in the difference between aims of Belaruskali and Uralkali. For a long time Uralkali worked at only 50% of its capacity. The decline in production led to a retention of the high price of potash fertilisers on the world market. That was the purpose of Uralkali.
Belarus today has a very different goal: to earn now, and as much as possible. Belaruslkali remains one of the few companies that bring revenues into the Belarusian economy. In fact, Belarus was in a very beneficial position to increase the prices for potash while Uralkali was limiting its production.
Russians suspected the Belarusian enterprise of using “shady schemes” at the Brazilian market. Officially, this year Belaruskali has been responsible for nearly half of potash fertilisers imports in Brazil.
Economic conflicts between Belarus and Russia remain a significant part of the official fraternal relations. Conflicts of delivery of energy to Belarus exploded in 2004, 2006, 2007 and 2010. In 2009, Russia banned the import of Belarusian dairy products. Journalists called that conflict “milk war”.
Although economic conflicts between Belarus and Russia happen now and then today’s war has a few differences.
If the previous conflicts were conflicts between the states, today, a private company Uralkali has become one of the parties to the conflict. So far, Russian companies have never challenged Belarusian leadership at this level. Although it seems that Uralkali coordinated its decision with the Kremlin.
As the old economic conflicts were a continuation of the policy only with the use of other means, Minsk and Moscow solved them at the political level. Despite possible coordination, Uralkali`s leadership remains different from the Kremlin: the private company will not give up their own economic interests, if Lukashenka offers further Belarusian-Russian integration.
Previous conflicts have been more of a “local wars”, the current conflict has attracted the attention of the world media. Currently Uralkali covers about 20% of the world market. Belaruskali covers a little more – about 23%.
Before the global market crisis, the price of fertilisers reached $1,000 per ton, today it is about $400. At times, the price can go down to as low as $300 or even less. This is especially true due to the slowing pace of the economy in developing countries. In the short term, prices will fall, and manufacturers will start a new struggle for the redistribution of the market.
The Goose that Laid the Golden Eggs
Aliaksei Valabuyeu, a local politician from Salihorsk, where Belaruskali is based, explained Belarus Digest that “people in town have become really concerned. Belaruskali had several crises during the last 10 years. Back then, the enterprises forced people to go on a long vacation, and that means not only Belaruskali, but also other companies cooperating with the potash producer.” Salihorsk locals worry because the Belarusian Potash industry is undergoing serious changes.
In December 2012, Alexander Lukashenka signed a decree that Belaruskali can sell their products not only through Belarusian Potash Company, but also through other traders. After the break with Uralkali Belarusian state-owned company announced a new partnership with the Qatari firm Muntajat and the Brazilian company Sertrading.
Over the last month the Belarusian Potash Company also changed its board of directors. Former director Valery Ivanou went to work to the Presidential Administration, and his deputy, Alena Kudravets became chairperson of the trader. Previously she served as Belaruskali’s Deputy Director for Commerce and Logistics.
Because of the competition at the market, Belaruskali had to produce more fertilisers and sell them cheaper. In the end, Belarus will also suffer from these skirmish. If in 2012 the Belarusian producer brought in a profit of $780m, this year the figure may drop two-three times. Belaruskali`s CEO admitted that “he would never go into an alliance with the Uralkali after what they did. Although if Uralkali change owners and approach – everything is possible.”
Belaruskali will bring in much lower profits than expected before the break with Uralkali. The increase in production will lead to a further decline in prices and income of the Belarusian budget. The goose that laid the golden eggs, it would appear, will soon be laying ordinary ones.
European Cafe, Citizen Journalism, Green Mahiliou – Belarus Civil Society Digest
European Cafe hosted a public lecture in Minsk. Budzma organised a Day of the Belarusian Language for young people. “For Freedom” invites for the school where the current situation in Belarus and the existing potential of the Belarusian civil society will be discussed.
Ihar Pastnow, a paediatrician and psychiatrist in Vitsyebsk who openly criticized the head of the Regional Executive Committee, will have to attend a mental health hospital for compulsory psychiatric care. Two NGOs were denied registration.
European Café goes on its meetings. On 7 September at the TUT.by gallery the project “European Café: open space in Europe” hosts a public lecture by Timm Beichelt “Germany and the EU: Face to Face with their Eastern Neighbours.” Timm Beichelt is a Professor of European Studies at the European University Viadrina Frankfurt. The meeting is a continuation of a series of meetings with prominent European figures, organised by the Centre for European Studies.
“Budzma z movay!” for young intellectuals. The campaign “Budzma!” conducted a Day of Belarusian language at a camp for young participants who were playing intellectual games. The program included several games in Belarusian including “Media Alphabet” and “What-Where-When?” as well as a literary-musical event and a Belarusian dance.
Presentation of 2012 Sustainability Index. On 29 August a presentation of the results of 2012 Sustainability Index of civil society organisations (USAID methodology) took place in Minsk. The event was organised by the international NGO “ACT” with informational support from the Office of European Expertise and Communications. The invited experts discussed strategies to improve sustainability in the third sector, taking into account the results of the Index.
School “Belarus Today: Challenges and Prospects for Development”. The school was organised by the movement “For Freedom” and will take place on 15-20 October in one of the neighboring European countries. The purpose of the school is to provide fellows with a comprehensive vision of the current situation in Belarus and discuss the existing potential of Belarusian civil society. Participation in the school is available for Belarusians of 18-30 years old who are active in social and political issues.
Citizen journalist 2013: Let’s Make it Better! The contest “Citizen Journalist” continues and invites all to apply with articles, photos, videos, audio or blogs about local issues. Thus, the team supports the wave of local campaigns “Let’s Make it Better!” initiated by the Assembly of Democratic NGOs. All works will appear on the website narodny.by, the best will be offered to independent newspapers and TV media. The deadline for submissions is 10 September.
Eastern Partnership Youth Forum 2013. On 22-25 October Eastern Partnership Youth Forum will take place in Kaunas (Lithuania), under the Lithuania’s Presidency of the EU Council and the Eastern Partnership Platform 4 “Contacts between people”. The event will gather about 200 young people and aims to increase sustainable political/civic commitment to further support non-formal learning and recognition of the process of work by young people through cooperation with those working with youth.
Embassy Funds for Belarus 2013. MATRA/HRF for Belarus launched a new call for proposals focused on the development of civil society in Belarus. The Embassy has two programme funds available for 2013: the Small Embassy Projects Programme (Matra Fund) and the Human Rights Fund. Date of closure for the round is 15 September 2013. The Embassy is empowered to extend grants in principle to a maximum of Euro 25,000.
First billboard with a picture of the HIV-positive citizen of Belarus opened in Minsk on 21 August. Eugeni Spevak, a member of the Belarusian community of people living with HIV and the face on the billboard, said that 20 similar billboards will be placed throughout the country. The event “Why am I living with HIV for a long time” was organized by the World Health Organisation, with the support of the Ministry of Health of Belarus, UNDP, etc.
Agro-Cultural-Festival in Minsk. Ecodom NGO and ecological entity “Agro-Eco-Culture” invite those interested to the Eco-Cultural Festival 2013, which is traditionally held at the Minsk Gallery “Ў” during the last days of summer. The Festival program includes presentations, master classes, tastings and concerts that can be attended by both adults and children.
SILC invites for training on ideology. Swedish International Liberal Centre (SILC) is inviting interested parties to participate in the training “Political party ideology”. Politically and socially active youth of 18-35 years old are welcome to submit applications till September 22. The main objective of the course is to improve the knowledge of young political activists to better understand political ideologies and explore their different aspects.
Birdrace 2013. APB BirdLife Belarus NGO is welcoming participants to take part in the X Open Championship of Ornithology Racing. Competitions will be held on the first Saturday of autumn (on September 7) from 6 am to 6 pm. According to regulations, the winner is the team that during the day of the tournament registers the largest number of species of wild birds naturally occurring in the territory of Belarus.
“Green Map” in Mahiliou. The Internet project serves as a guide between authorities responsible for waste collection and disposal and those who want to properly get rid of their waste. At the moment, Mahiliou Green Map contains 68 points where one can drop secondary material resources, waste, as well as to give away unnecessary items. The project’s initiator is the Centre for Environmental Solutions.
Interaction between state and civil society
Monitoring of public councils. The Ministry of Economy of Belarus has monitored the activities of public advisory councils and working groups in the state bodies. Monitoring data indicate that 29 advisory councils and working groups which include representatives of the business community continue to act. The Ministry concluded that the councils are a real platform for dialogue between the government and business.
Two NGOs registration were turned down. On 21 August the Supreme Court of Belarus upheld the denial of registration for the United Civic Party’s youth wing “Young Democrats“. A Department of Justice of Brest Regional Executive Committee refused to register the NGO “Brest Christian Democrats.”
Doctor in Vitebsk who openly criticized authorities sent to psychiatric hospital. On 21 August Ihar Pastnow, a paediatrician and psychiatrist in Vitsyebsk who openly criticized the head of the Regional Executive Committee has been sent to a mental health hospital for compulsory psychiatric care.
Program director of Radio “Racyja” banned entrance to Belarus. The Program Director of the Belarusian Radio “Racyja” Yury Leszczynski, planning his holiday, wanted to come to Belarus. Having visited the Consulate of Belarus in Bialystok, he received a visa denial a week after applying for a tourist visa.
Belarus Digest prepared this overview on the basis of materials provided by Pact. This digest attempts to give a richer picture of the recent political and civil society events in Belarus. It often goes beyond the hot stories already available in English-language media.