Why Belarusians Turned to Shopping Abroad
With the economy dominated by the state and its illiberal trade laws, many Belarusians are increasingly taking to shopping abroad.
In the the middle of November, Chinese e-commerce giant Alibaba Group reported that customers from Belarus ranked fifth in the number of purchases, leaving behind the US and Canada in the online sales on Chinese anti-Valentine's Day holiday known as "Singles’ Day."
Meanwhile, shopping tours in neighbouring EU countries remain a favourite weekend trip for many Belarusians. This autumn the sharp decline of the Russian rouble sparked a shopping frenzy, with Belarusians rushing to Russian cities because of the lower prices.
The authorities in Minsk have repeatedly expressed their concerns about its citizens' shopping habits, which drain Belarus of foreign currency. Belarusians spend nearly $3bn annually abroad and domestic producers continue to lose their local markets.
However, radical restrictive measures to halt the large influx of imports is highly unlikely. The regime needs to maintain its economic contract with the public. Minsk permits people to satisfy their material needs in exchange for political loyalty. Joining the WTO could resolve some of the issues Belarus is facing, but Belarus needs to see a substantial change in relations with the West and economic reforms to obtain membership.
Belarus, an Unexpected Leader in Online Shopping
Singles’ Day in China takes place annually on 11 November. Originally a holiday commemorating unmarried young people, it has since become one of the largest online shopping day in the world. This year, the Alibaba company, one of the most active promoters of the holiday, made $9.3bn in sales – a world record for online shopping.
Strikingly, Belarusians appeared to be among the most active buyers outside of China, achieving a top 5. Russia led the ratings, followed by Brazil, Israel, Spain, ending with Belarus. Belarusians even outdid the US and Canada during this global shopping frenzy.
The Belarusian state-managed economy still cannot satisfy the consumer aspirations of its citizens. Consumers lack access to world famous brands locally and the seasonal discounts regularly found in market economies. Foreign companies in this sector are only starting to enter the Belarusian market.
Domestic prices remain high, so people prefer to shop in neighbouring EU cities like Vilnius, Bialystok and Warsaw. Recently, Russia also became a popular shopping destination, as the rouble's devaluation made Russian products more affordable for Belarusians.
Internet usage is fast growing in Belarus. According to research conducted by the Analytic Centre of the Presidential Administration, as of autumn 2014, 62% of Belarusians used the Internet, and around 50% of them were mobile Internet users. Just this June the PayPal online payment service started operating in Belarus, which makes online shopping more accessible to Belarusians.
However, a study by MASMI, a market research company based in the UK, from May 2013 showed that only 20% of Belarus' urban populace shops online. And only a quarter of them, or 5% of the urban population, made purchases on foreign web sites.
More recent data is unavailable, but it appears that Belarus witnessed a rapid growth in online shopping over the past year. The trend may be here to stay. Threads that discuss online shopping attract the largest readership on onliner.by – the most popular Minsk Internet forum.
The Russian Auto Fever
The recent economic developments in Russian provoked a real pilgrimage of Belarusians to its eastern neighbour to buy up cheap cars and high-tech gadgets. In 2014 the Russian rouble has lost 45% of its value, and this autumn it fell particularly quickly.
However, Russian businesses did not rush to raise prices to the same rate, and Belarusians had a unique opportunity to buy cheap products without visa or customs restrictions. Tourist services, cars and electronics were among the most wanted products according to stories circulating around Belarusian airwaves.
A representative of the Pegas Tourist company based in Russia told TUT.by that, "because of economic downturn many Russians have cancelled their plans to visit resorts this winter, and tourist firms have to offer discounts to attract clients". This especially concerns distant destinations like Cuba, Mexico, and Thailand. Coupled with devaluation, it has reduced travel prices considerably.
Electronic gadgets also became a hot good for Belarusians in Russia. The difference in prices between buying domestically were offset by travelling to Russian.
The biggest purchasing rush was for automobiles in Russia. The difference in automobile prices in Minsk and Moscow currently vary from thousands to tens of thousands dollars in the case of luxury automobiles.
At the moment, around 250 cars from Russia are registered in Minsk alone and around 500 throughout all of Belarus. Belarusians prefer to buy newer cars, as most of them are no older than 2008.
However, the car rush created a fertile environment for crime in car sales. Belarus's police force reported that they have uncovered several schemes of legalising the purchase of stolen cars through their registration in Belarus and other related illegal activity. They are currently investigating the history of 110 vehicles to determine their origins.
EU Shopping Concerns
While shopping in the common economic area of Eurasian Union cannot be restricted by any means, the Belarusian government continuously expresses concerns with the EU import that Belarusian shoppers bring home.
In recent years, Lithuania has been the nearest EU shopping destination for Minsk residents, being less than 200 km away. However, currently Lithuania becomes more expensive, as it introduces Euro since 2015. Belarusians continue to visit Vilnius on the weekends, but their interests are shifting from shopping to entertainment – cafes, pubs and concerts.
Meanwhile, shopping crowds have reoriented towards Poland, which is now popular not only among traditional visitors from the border regions, but for people from every corner of Belarus as well. Many companies and individual entrepreneurs offer shopping tours to Bialystok and Warsaw. According to the Polish Statistics Office, in July-September 2013 Belarusians spent $250m in Poland, more than either Russians or Ukrainians.
In September 2013, Aliaksandr Lukashenka made an announcement which gave many Belarusians pause:
[the West] criticises us for being a poor country, but our people send $3bn abroad annually and import goods which we also produce ourselves. So I have already ordered a decree – if you go abroad, you pay a $100 fee and then you are welcome to buy things. [This way] people would go to our shops and buy our refrigerators instead of carrying them from abroad.
So far these measures have not been introduced and are unlikely to be at all.
The economic contract with population means that Belarusians can satisfy their material needs in exchange for political loyalty. However, Belarus remains the only country in the region that has not yet joined the WTO. Its Eurasian Union partners, Russia and Kazakhstan, already enjoy the benefits of it, while Belarus protectionist policies keep domestic prices high.
Effectively, this means that Belarusians will carry on their mass consumerist pilgrimages to the West and East. The Belarusian government needs to intensify its WTO negotiations in order to combat this problem in future, and working on improving political relations with the West could play a major role in this process.
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Snoop Dogg’s Love, Civil Society Under Pressure And A Tragic Discovery – Western Press Digest
Belarus has also gained some international notoriety recently. American rapper has proclaimed his love for Belarusian culture by launching an accessory line. In more gruesome news, Belarus has been a gruesome discovery that old Jewish headstones were used as building materials back in the Soviet era.
As 2014 comes to a close, the situation on the ground is becoming more volatile. Pressure on civil society has led to the expulsion of a prominent legal advocacy professional and a fine to a journalist for covering a local event commemorating a Belarusian author.
The events in Ukraine continue to influence Belarus. Economically, Russia's sanctions against EU foodstuffs has led to stricter control on Belarusian food exports to Russia. Domestically, it has meant that Lukashenka enjoys greater public support than a year ago.
All of this and more in this edition of the Western Press Digest.
Legal Advocacy Leader Kicked Out of Belarus – Radio Free Europe/Radio Liberty reports that a Belarusian resident of 29 years was recently forced to leave the country. The police cited Yelena Tonkachyova for an alleged traffic violation and as a result she had her residency permit annulled. Tonkachyova, a citizen of the Russian Federation, runs the legal aid and advocacy group Lawtrend which opened in Minsk back in 1996. According to the RFE/RL report, Lawtrend "promotes freedom of expression, freedom of association, and the right of access to information, justice, and a fair trial."
Reporter Fined for Covering News – Following his being detained by the authorities, a local court fined RFE/RL journalist Mikhal Karnevich $205 for illegally participating in a mass gathering. Karnevich was in a small Belarusian village for an event that celebrated Kastus Kalinovski, a 19th-century Belarusian political activist when the authorities detained him. The RFE/RL reporter, who has been fined before on similar charges, said that he was simply doing his job in covering the event. The RFE/RL article implies that these court rulings essentially mean that by covering an event as a journalist, the Belarusian authorities consider you a participant in the events.
Famous American Rapper Snoop Dogg A Belarus Fan? – Snoop Dogg, one of the most iconic rappers in the world, has launched a Belarusian-inspired line of accessories for his online store according to a recent report by RFE/RL. The line of accessories include laptop cases, t-shirts and backpacks — all with images of traditional Belarusian embroidery. The US Rapper did not, however, come up with the idea all on his own, but rather contacted Belarusian art collective "Hoodgraff" to work on a possible collaboration. According to one member of Hoodgraff, Snoop Dogg had been following the group's art mural projects for a while now.
Despite Hoodgraff's apparent rise in international popularity, they have not received the same warm welcome back home in Belarus. After trying to paint a mural of famous Belarusian writer and Lukashenka critic Vasil Bykau, the local authoraties levied the group with a heavy fine as a result they decided to seek greener pastures abroad in Russia.
On the International Stage
Jewish Headstones Used For Construction – VICE News recently reported a rather disturbing discovery by residents of Brest, a town in western Belarus. When construction began on a new local supermarket, the demolition of old housing revealed that the foundations of the buildings was built from old Jewish headstones. After the local Jewish community was devastated under Nazi Germany, the Soviets set about erasing much of the local community's history. According to VICE, in 1959 a Jewish cemetery the soviets destroyed in order to make room for a new sports stadium. They then recycyled the headstones.
Construction on the supermarket has led to a rapid increase in the number of headstones discovered in the region over the past 6 years. Many of the tombstones now lay in the Brest Fortress, a symbolic monument to the Soviet's fight against Germany in World War II. At the moment different organisations are trying to find a way to collect all of the tombstones and ensure their preservation, though this work is only in its beginning stages.
Economy and Domestic Politics
Russia Toughen Its Stance on Belarusian Meat Imports – In an ongoing trade war between the Customs Union partners, Russia has once again moved to restrict meat imports from Belarus. Reuters reports that the latest move by Moscow to clamp down on food imports from Belarus. This follows allegations that Belarusian exporters had falsely been labelling food products as being destined for Kazakhstan, but smuggled the into Russia. Minsk had earlier assured Russia that it would not import banned EU foodstuffs to enter Russia's market. In order to ensure that the goods are not going to be sold within the Russian Federation, the Russian authorities will enforce more stringent control on the border.
Recent Shake Up at Ministry of Defence – In a somewhat unexpected move, long-time Lukashenka ally Yury Zhadobin has been removed from his post as Minister of Defence. Zhadobin is a long-time insider and has been serving Lukashenka as head of the KGB and Minister of Defence since 2009. According to an interview from the RFE/RL, this may be a move by the government to modernise its defence forces in light of the developments in Ukraine. Belarus and Russia are close military allies, but the conflict in Ukraine has made the head of state weary of similar events unfolding at home.
Ukraine Crisis Helping Lukashenka at Home – Businessweek is reporting that the ongoing conflict in Ukraine has actually worked in favour of Lukashenka. According to a recent poll conducted by the Independent Institute of Socio-Economic & Political Studies in Minsk, the Belarusian ruler has seen his approval ratings climb from 40% to 55% over the past year. Given Belarus's deep economic, military and political dependence on Russia, it may appear paradoxical that things for the authoritarian Belarusian president are on the upswing. Businessweek explains that there are three reasons for his improved position.
First, Lukashenka has done a very good job at balancing the interests of the West, Russia and Ukraine throughout the conflict. Second, the chaos that Belarusians see as a result of Russian TV market saturation in Belarus has led many Belarusians to seek further assurances of security and stability as opposed to the chaos they view in Ukraine. Third, the opposition has been effectively neutralised for fears that if Lukashenka leaves, Belarus could become the next Crimea.
Belarus Is Changing, but the West's Policy is Frozen – A recent analytical piece put out by the Carnegie Endownment for International Peace breaks down many of the West's misconceptions of modern Belarus. According to Balázs Jarábik, the West must be careful not to ignore the evolving reality on the ground in the isolated east european nation. The author of the article states clearly that while things are still in bad shape with civil rights, a restrictive business environment and the absence of a real political culture, things have been slowly, but surely, evolving. The West should respect this gradual change, as well as the regional dynamics, to adapt its policies towards Belarus accordingly.