Tanks and tractors: Belarus' new deals in the developing world

On Sunday, Foreign Minister Uladzimir Makei headed to South Africa and Nigeria for a round of meetings.

After losing its partners in the Middle East and at the time when relations with Latin America are stagnating, Belarus is seeking new trade partners.

This year, Minsk opened four embassies – in Ecuador, Mongolia, Australia and Pakistan. Another one - in Qatar - is on the way. Belarus has also started to use financial incentives to promote its exports.

While it has no problem selling potash, its top export commodity, Belarus struggles to promote its machinery and defence equipment. Finding markets for these exports is key for keeping large state firms afloat and bringing in more foreign currency. It is precisely these vital economic needs and not Belarus' ideological or geopolitical dreams that drive its foreign policy.


Middle Eastern Setbacks

In the 2000s, Belarus had to alter several aspects of its policy towards the Middle East. In 2003, Minsk lost Iraq as a trading partner due to US invasion. Then, Belarus's economic ties with Libya, Syria and Egypt suffered due to the instability produced by the Arab Spring.

Belarus also had to limit contacts with Iran due to growing international pressure. In March of 2014, Lukashenka told Iranian politician Ali Larijani that, "due to external pressure, primarily on Iran (but also on Belarus) the trade volume between our nations has decreased. We started to lose some channels of cooperation.”

Belarus's current ties to Gulf monarchies have failed to compensate for the loss of its old partners in the Middle East.

In 2011, after visiting the Persian Gulf monarchies, Lukashenka predicted an emergence of a “Qatari Island in Europe,” a conglomerate of Gulf Arab investment projects for billions of dollars, in Brest region. The project, however, ended in the construction of a hunting estate in a Minsk forest.

The relations with Latin America have suffered a similar decline after Hugo Chavez's death in March 2013. The former president of Venezuela actively traded with Minsk in oil and gave Belarusian service providers a shot at modernising Venezuela (building trucks assembly plants, bringing gas into houses, exploring mineral deposits and even constructing national air defence system). At one point, bilateral trade between Venezuela and Belarus reached $1.5bn.

Chavez also included Belarus in his political and economic designs in the Latin America, and Minsk capitalised on these opportunities. Addressing Belarusian diplomats in August, Lukashenka extolled the cooperation with Venezuela and urged his subordinates to find “new Venezuelas” for cooperation.

In 2013, trade with Venezuela fell manyfold. It should be noted, however, that Belarusian exports, worth $83m, made up virtually all of the trade between the two countries.

Venezuelan Ambassador Américo Díaz Núñez argued that the change of government in his country was the main reason for the decline in the two nations' ties. It is likely that the cessation of oil deliveries explains most of the decrease in trade. Trade between Belarus and Venezuela is not expected to resume any time in the near future.


Tanks...

Under these circumstances, the government is reorienting its policies in the Third World towards developing relations with regional powers that were earlier neglected by Minsk, such as Nigeria, Indonesia, and Pakistan. It is also reviving links with former Soviet allies, including Mongolia, Bangladesh, and Mozambique. Summer contacts with Pakistan and Mozambique provide illustrative cases of Belarus' latest efforts.

In July, Belarusian media briefly noted that Pakistani Minister for Defence Production Rana Tanveer Hussain had attended the Exhibition of Arms and Military Machinery MILEX-2014, and met Foreign Minister Makei.

Pakistani media reported that Minister Hussain and two Pakistani generals had also met Yury Zhadobin, Minister of Defence, Siarhei Huruliou, Chairman of the State Military and Industrial Committee, and representatives of several defence industry-related firms.

The Pakistani government stated, “both sides agreed to develop a plan of action for establishing military & technical cooperation”. Minister Hussain was interested in electronic warfare technology, optical and optical-electronic devices, spare parts for tanks and armoured personnel carriers. He also discussed the possibility of establishing joint ventures, as well as service and maintenance centres.

Islamabad has for years worked with Kyiv on the modernisation of Pakistani mechanised armour. Now, looking at the hopeless situation in Ukraine, it is trying to secure the necessary parts and expertise for the post-Soviet equipment and arms of Pakistani army from Belarus.

Belarus-Pakistani talks are particularly remarkable because, as recently as February, a delegation of the State Military and Industrial Committee of Belarus visited India. They attended an arms exhibition and participated in a meeting of the Belarusian-Indian Intergovernmental Commission on Military-Technical Cooperation.

The parties discussed, inter alia, the modernisation of Indian army's armoured vehicles and air defences, the establishment of a service centre for military optical goods, technology transfers involving optical, optical-electronic and laser devices, and cooperation on manufacturing drones.


... and Tractors

In its relations with the developing world, the Belarusian government is also promoting Belarusian machine-building products. In July, the Prime Minister of Mozambique Alberto Vaquina visited Minsk. So far, relations with Mozambique are rather limited – bilateral trade in 2013 totaled only $9.1m, a figure that includes Belarusian exports valued at $8.7m.

When speaking about possible areas of cooperation, Vaquina emphasised agriculture and agricultural equipment. He spoke about increasing Belarusian tractor exports and creating assembly production facilities in Mozambique.

Earlier this year, Deputy Prime Minister Uladzimir Siamashka offered Mozambicans cooperation "of the Venezuelan variety" that would include the establishment of assembly plants. "We mean to construct the assembly lines not only to meet the needs of Mozambique, but also to establish a platform for future sales to other countries in South and Central Africa.”

Minsk is very eager to have its MTZs sold in Africa and Prime Minister Myasnikovich has offered his Mozambican counterpart new financial instruments to promote the economic and trade cooperation. Belarus also intends to provide scholarships to Mozambican students – a new step towards promoting better relations with developing countries.


Will Belaruskali Start a Gas Business?

Needless to say, Belarusian policy in the developing world has many weaknesses. Its unstable relations with these countries partly result from the larger international developments unrelated to Belarus. But the problem also lies in the lack of marketing and trade promotion skills among Belarusian producers and in the inability of Belarusian officials to work in a more challenging environment.

It all begins with the basics. Belarusian government and business have for years discussed the problem of the English language skills. Nevertheless, Lukashenka, speaking at a recent seminar of Belarusian diplomats exclaimed again, “Should we finally introduce a list of offices staffed only by people who can speak to foreign customers without a dictionary?!”

Untrained Belarusian officials have been known to undermine Belarus' trade prospects in the past. For example, ambassador to France Pavel Latushka derided the quality of Belarusian goods in an interview. Belarusian officials also show remarkable ignorance about industry-related matters. For example, the vice chairman of the Belarusian Chamber of Trade proposed to use Belaruskali, the national potash company, for extracting natural gas together with Mozambique. He was clearly unaware of the differnece between the technologies used for potash and gas extraction.

As Belarus strives to become a viable state, it can profit from links to the developing world. In recent years Belarusian approach to international trade has become more balanced and detached from any loud political rhetoric. There are no reasons to demonise Minsk's contacts with developing countries, even those that stand in opposition to the US.