What Will Happen to Odious Belaruskali?
- 3.02.2022, 13:51
The regime is losing one of its main suppliers of currency.
Lithuania stopped the transit of trains carrying potash from Belarus. The contract with Belaruskali from 2018 was terminated. New requests for transportation of its products will go before the Lithuanian government commission, which previously recognized the contract with the Soligorsk enterprise as "not in the interests of national security of the country." Let us recall that the U.S. sanctions against Belaruskali came into force on December 8, 2021.
Is Lithuania ready to fight the regime's attempts to circumvent sanctions? How will the suspension of potash transit affect the economy of Belarus? What do the employees of the plant expect?
Charter97.org looked into the situation together with experts.
"Lithuania has finally joined the U.S. sanctions».
Termination of the contract with Belaruskali was preceded by a crisis in the Lithuanian government. The head of the Lithuanian Foreign Minister Gabrielius Landsbergis and Minister of Transport Marius Skuodis resigned in protest against continued trade with the Belarusian regime.
Analyst of the Vilnius Institute of Political Analysis Marius Lauriniavicius believes Vilnius now adheres to the sanctions regime and is done with the transit of Belarusian potash:
- We must understand that this government crisis was caused by the previous decision of the government not to stop the transit. We saw after the eighth of December that the transit was not stopped. That caused a government crisis, and then they had to change their position and resolve the issue.
Of course, it's a delay of almost two months, but I think this decision is final. Lithuania has joined the U.S. sanctions.
The regime is already trying to circumvent the sanctions with the help of proxy firms. "Belarusian Potash Company (BPC), Belintertrans and Belkali-Migao tried to conclude a contract on the transit of potash, but they were denied. Is Vilnius ready to continue fighting against attempts to circumvent the restrictive measures? Marius Lavriniavicius considers that Lithuania will act within the framework of agreements with the United States:
- There will be a legal regulation. It will not allow transit to continue under the former treaty. However, it leaves no room for other companies, no matter what country they come from. This transit through Lithuania should not exist.
The Lukashenka regime imposed counter-sanctions against Lithuania. Since February 7, transit of petroleum products and fertilizers, coming from Lithuania by trains and loaded at the stations of the Lithuanian Railways, is banned. Marius Lavriniavicius considers Minsk's actions to be part of a hybrid war:
- Lukashenka has recently said that the Baltic states will not exist at all, something like that. Lithuania has already stopped paying serious attention to Lukashenka's statements. His statements are his business. But Lithuania, of course, is ready for various scenarios of a hybrid war, which the Belarusian dictator together with Russia unleashed against Lithuania long ago. At least, since last spring, when there was a hijacking when Lithuania was attacked by those illegal immigrants. This hybrid war that the Lukashenka regime has started against Lithuania is nothing new to us. No other statements will change anything. Unfortunately, we are in a state of war, which was certainly not started by us, but by Mr Lukashenka.
What economic consequences will Belarus face because of the transit shutdown?
Potassium is one of the main export sectors of the Belarusian economy and provides an inflow of currency into the country. The export of potash fertilizers in 2020 amounted to $2.4 billion. This is about 8% of the total volume of the Belarusian export and about 4% of the country's GDP. Will the potash sector pull the entire Belarusian economy? Economist Lev Margolin believes the losses may be huge:
- "If they fail to find some circumvention manoeuvres, it will hit very hard the situation at Belaruskali and the currency component of Belarus as a whole. There are only two questions here.
We know there have been attempts to find a substitute for Belaruskali, that is, to export on behalf of other agents. So far, they have failed. It is not clear what will happen in the future.
The second point is Russia - to what extent it will be able and willing to help its "Belarusian colleagues" to resolve this issue. This is a complex problem because there are not a lot of free capacities through which potash fertilizers can be exported on the one hand. On the other hand, to what extent the Russian partners, who are also Belaruskali's competitors, are willing to do that.
It is most likely a political issue, though. I think Russia will not make any decision on this matter until February 27, before the "referendum».
Kommersant says the route through Russia has not been agreed upon yet. This information was also confirmed by Putin's press service head Dmitry Peskov. Are there other transit routes for Belaruskali? Lev Margolin considers there aren't any:
- There were still routes through Ukraine, the port of Nikolaev and directly to European Union countries by rail. But I don't think these routes will be used in the conditions of sanctions. Although, as for the European route, the European sanctions made an exception for potassium chloride with 40 to 60 per cent content, which is further used for fertilizers. However, the EU's reaction is still hard to predict.
On the one hand, nothing formally prevents it from importing this fraction. On the other hand, there are still sanctions by the United States of America. European partners, most likely, will not want to quarrel either. I guess the next month will give answers to all these questions. If we fail to resolve issues with Russia, for example, then there will be very serious problems.
Salaries at Belaruskali have already gone down.
Workers at Soligorsk enterprise have long been leaders in terms of wages in their region. Vladimir Timoshchenko, a representative of the strike committee of Belaruskali, says the situation has started to change:
- There is preliminary information (it has not been confirmed yet) that one is going to send people on vacation with payment of 2/3 of their salaries.
These measures are still only planned. In reality, the level of wages has dropped. Plus there is inflation. It became difficult for everyone. The level of wages has fallen economically. Some people keep records of their finances for several years. I know for sure that this year both bonuses and benefits are much lower than in the previous two years.
Certainly, this affects the mood among the workers at the Soligorsk enterprise:
- Inside the collectives, they are afraid to discuss anything. People have the desire. When you talk to a person, you understand that dissatisfaction is growing. Alas, it does not manifest itself in any format. So far.
However, the management of the company, which is turning from a flagship of the Belarusian economy into toxic ballast, does not think about somehow "tightening their belts". Cyberpartisans and the Belarusian Association of Workers told how the odious CEO Ivan Golovaty lives.