Economist: New US Sanctions Will Hit Lukashenka Much More Seriously Than Before

• 3.04.2021, 14:59

Foreign companies will begin to avoid all relations with Belarusian enterprises.

Recently, the Department of State of the United States of America announced that it would reinstate sanctions against 9 Belarusian enterprises. Charter97.org spoke with Barys Zhaliba, Ph.D. in Economics, about what these sanctions mean and how they will work.

- These sanctions were introduced even earlier, then relations between Belarus and the United States warmed up. They were introduced for the same reasons as today, in connection with the violation of human rights. Then, when the Americans assessed the political situation better, they did not extend these sanctions.

Now the Americans have said that they will be restored, giving time for the Belarusian authorities until April 26 to release political prisoners and so on. Obviously, the authorities will not release political prisoners, they will only increase repression.

The sanctions targeted mainly the enterprises of the Belneftekhim concern, where Naftan, OJSC Polotsk-Steklovolokno, and others are located. At that time, Belaruskali was not included in the list because it was not in the concern, but now it is there. We'll see if it is included because the sanctions are being restored, not created from scratch. Since there was no Belaruskali, they probably won't add it.

What changed? As analysts emphasize, earlier it was a loss of the American market for enterprises, and then our exports to the United States were insignificant. Today the situation is different, that if someone buys, for example, Belarusian oil, then these sanctions will automatically apply to this buyer. This applies to all 9 businesses.

Naturally, if foreign companies work with these enterprises, they will lose the American market. This also applies to banks that will service these transactions. Following this, the partners of Belarusian enterprises will suffer, followed by a chain reaction. Therefore, foreign companies will begin to avoid all relations with 9 enterprises in terms of exports, imports, and bank settlements. This has not happened before.

Analysts say this is a big difference from today's sanctions. They will have a more serious impact on enterprises, we can lose many partners and transactions that went through those banks, especially where there are dollars, and if it is oil, then there are always dollars. If we extend this line, then there are European traders because our oil goes to the European Union, and then transshipment in Rotterdam. It turns out that buyers of Belarusian oil can refuse our products. Then I don't know what will happen... This is a disaster. Maybe I'm exaggerating, but a third of the currency in Belarus is given through oil products, which are produced in our refineries in Navapolotsk and Mozyr. As they say, wait and see.

- A similar situation is now with Nord Stream 2, where some companies refused to continue working due to US sanctions.

- Yes, this is a vivid example of when the main participants, who provided the equipment, technology, and laying of these underwater pipes, quit. And that's it, the project has stopped, although the Germans still do not mind because it has already been completed by 90%. Because of these US sanctions, that's it, it is unknown when work will resume.

This is the influence of the United States and American banks, this is the dollar, which remains the number one currency. These sanctions are now much more serious than they were 10 years ago.

- To what extent are such sanctions perceptible for the economy?

- I think that the sanctions will be felt. If such a chain is built, when their partners begin to abandon the partners of our enterprises, it will immediately be a loss of currency, there will be a devaluation of the Belarusian ruble with strongly ensuing consequences.

Of course, this is pressure from the outside because, in the past months, there has been pressure from within - demonstrations. When the pressure is combined, it naturally affects the position of the Belarusian authorities.