Belarus’s Relations With the Baltic States: Strategic Economic Links and Pragmatic Foreign Policy Calculations

Executive Summary

Historically, Belarus has always had close relations with the three Baltic States—Lithuania, Latvia and Estonia—and cumulatively spent centuries together with them in several larger shared state entities. The strategic importance of the Baltic States for Belarus stems from their geographic location—for the land-locked country, Baltic seaports are the closest gateways to overseas markets. In the medium term, this transit direction will receive even more attention from the authorities in Minsk as Belarus continues to take steps to emancipate itself from energy and market dependencies on Russia.

Lithuania and Latvia implement sharply divergent policies toward Belarus. While Riga has chosen a pragmatic approach and tends not to focus on issues sensitive for Minsk, Vilnius often prioritizes a contentious political agenda, such as demanding an end to the construction of the Belarusian nuclear power plant at Astravets. The latter has led to serious political frictions between the two countries and created a deadlock in Belarusian negotiations with the European Union regarding partnership priorities as Lithuania blocks further efforts. Belarus’s relations with Estonia, compared to the two other Baltic states, remain far less intensive.

Nevertheless, Minsk’s pragmatic foreign policy calculations dictate that it refrain from mixing political arguments with economic cooperation. Thus, despite political tensions with Vilnius, bilateral economic relations have always remained intensive. The new Lithuanian president, Gitanas Nausėda, is seeking to overcome the legacy of the previous period of frozen political contacts, at least at the level of public rhetoric. This may lead to a breakthrough in bilateral ties, especially after the United States made it clear to Vilnius that it would not back Lithuania’s fight against the Belarusian nuclear plant. Meanwhile, the deterioration of Belarus’s relations with Russia as well as President Alyaksandr Lukashenka’s decision to diversify Belarusian oil supplies are creating additional opportunity for rapprochement with Lithuania.

Introduction

The Baltic States are essential to Belarus’s foreign policy and trade relations. However, the individual relationships with each of these three countries have evolved differently over the years. While Lithuania is Belarus’s most important economic counterpart among the Baltic States, in political terms, it is the most problematic neighbor. Latvia is also a crucial transit country for Belarusian commodities, but it has chosen a constructive and non-politicized strategy for engaging with the government in Minsk. Estonia, a small country without a shared border with Belarus, is relatively more marginal to Minsk’s regional interests.

Lithuania

Economic Relations Heretofore Unaffected by Political Disputes

Lithuania is one of Belarus’s main economic partners. It ranks eighth in terms of two-way trade turnover and seventh in terms of destinations for Belarus’s exports.

 

Belarusian-Lithuanian Trade in 2014–2019 (USD mln)

  2014 2015 2016 2017 2018 2019
Trade 1,407.2 1,241.8 1,032.5 1,166.8 1,512.9 1444,6
Export 1,042.0 964.0 767.0 848.3 1,156.2 1060,5
Import 365.2 277.8 265.5 318.4 356.7 384,1
Surplus 676.8 687.2 502.5 529.9 799.5 676,4

Source: Belstat[1]

 

In 2019, two-way commodity trade amounted to $1.45 billion. Exports reached $1.1 billion and imports hit $384.1 million. Belarus’s foreign trade surplus with Lithuania during 2019 was $676.4 million.

At the same time, Belarus has managed to diversify its export deliveries to Lithuania. In 2019, 658 different types of products were supplied. Core export products include petrochemical goods (oil products, ethylene polymers); fertilizers; electricity; ferrous metals (unalloyed steel bars, wire); timber and timber products; animal and vegetable fats and oils; machines and mechanical equipment Belarus mainly imports from Lithuania boilers, mechanical equipment and mechanical devices; plastics and plastic products; electrical machinery and equipment; as well as paper and cardboard.

Service-sector trade between Belarus and Lithuania in 2018 reached $811.9 million (up by 16.5 percent in 2017), and it accounted for 6.7 percent of Belarus’s combined trade in services. The export of Belarusian services to Lithuania went up by 21.9 percent to $329.9 million compared to 2017. Traditionally transport services have been the most important category, totaling $246.5 million in 2018, having increased by 17.6 percent from 2017.

In addition, Lithuania is among the top-ten international investors in Belarus’s economy—at the end of 2018, this southernmost Baltic State ranked seventh among global and fourth among European investors, respectively.

 

Lithuanian Investments in Belarus in 2014–2018 (USD mln)

Period Gross investments FDI
2014 233.5 190.1
2015 168.9 139.6
2016 253.4 185.8
2017 198.2 180.6
2018 196.6 166.3
2019 207.6 185.1

Source: Belstat

 

Lithuania has consistently invested over $150 million in Belarus’s economy on an annual basis. In 2019, Belarus received $207.6 million in Lithuanian investments, including $185.1 million worth of foreign direct investment (FDI).

Belarus is implementing a number of major investment projects domestically with Lithuanian capital in construction, retail, woodworking, agriculture, and the promotion of its transport and logistics networks. More than 600 companies operate with the participation of Lithuanian capital in Belarus; whereas in Lithuania, there are about 250 companies with Belarusian investments.

Lithuania is also an important transit country for Belarusian commodities bound for third countries. Belarusian cargoes have accounted for more than 30 percent of cargoes transshipped at the Klaipeda seaport since 2014. The port itself generates about 7 percent of Lithuania’s GDP, whereas all of the seaport-related enterprises account for up to 18 percent of the country’s GDP.

Between 2014 and 2018, the overall cargo turnover of the Klaipeda State Seaport demonstrated sustainable growth, and the same trend remains with respect to Belarusian commodities. In 2014, 12.8 million tons of cargo from Belarus was transshipped (35.1 percent of the port’s total cargo turnover); in 2015, 13.2 million tons of Belarusian goods were transshipped (34.2 percent); in 2016, 13.9 million tons (34.6 percent); in 2017, 14.2 million tons (32.9 percent); and in 2018, 14.8 million tons (31.7 percent). Traditionally, mineral fertilizers, oil and petroleum products, and ferrous metals have accounted for the bulk of such transit. Potash (potassium-based) fertilizers account for more than 70 percent of cargo flows from Belarus to Klaipeda. So far, despite the political tensions between Minsk and Vilnius, the flow of potash fertilizers has remained stable because Lithuanian stevedoring and railway companies, as well as bulk cargo terminal operators, work under long-term agreements with Belarusian state companies Belaruskali, Belarusian Potash Company (BPC) and Grodno-Azot.

In 2013, during the visit of then–prime minister Michail Miasnikovič to Lithuania, a deal was closed for Belarus to buy a 30 percent share in the bulk cargo terminal at the seaport of Klaipeda, thus more tightly tying Belarus to Lithuania’s transit services. The importance of the Lithuanian direction as a main transit route for Belarus was highlighted once again in January 2020, when Minsk purchased 80,000 tons of Norwegian oil after having failed to negotiate a new oil contract with Moscow. Belarus chose the Klaipeda port as the nearest entry point to deliver the crude oil to its Navapolatsk oil refinery (Vitebsk Oblast). The Belarusian authorities are also trying to acquire additional facilities (or logistic businesses) at the Klaipeda seaport; but since former Lithuanian president Dalia Grybauskaitė labeled Belarus a “security threat” to her country, the perspective for such a deal became less realistic.

Nevertheless, neighboring Latvia has quite successfully competed with Lithuania for Belarusian transit and will be able to take over some of this freight traffic in the future.

Political Relations in the Shadow of Astravets

Belarus’s political relationship with Lithuania is starkly opposed to their economic engagement. Of all its neighbors, Belarus has the most toxic relations with Lithuania. But paradoxically, those acute bilateral political differences have had virtually no impact on the trade and economic framework.

The formal reason for the Lithuanian authorities’ continual harsh criticism of Belarus is the latter’s construction of a nuclear power plant (NPP) just outside Astravets, near the Lithuanian border (and only 45 kilometers from Lithuania’s capital city of Vilnius). However, it seems that the real driver behind the deterioration of the relationship was the personal attitude of the former president of Lithuania, Dalia Grybauskaitė, and the influence of part of the conservative elite around the Belarusian president.

Initially, it was Grybauskaitė who became the main advocate of the normalization between the European Union and Belarus, in 2009–2010. She invested much of her political capital into this initiative, having invited Lukashenka, who had been denied entry into the EU, to visit Vilnius in 2009. However, the authorities’ violent dispersal of an opposition rally in Minsk on election day, December 19, 2010, halted the normalization process with the West and undermined all of Grybauskaitė’s efforts to stand up for Belarus in Brussels. After that, Belarus’s political relations with Lithuania changed dramatically for the worse. In an interview with LRT, Grybauskaitė even claimed that Belarus posed a threat to neighboring member states of the North Atlantic Treaty Organization (NATO).[2]

By the time the former Lithuanian president had begun her rapprochement with Lukashenka, the decision to build a Belarusian nuclear plant had already been made and the Astravets site had been officially chosen. Nevertheless, at that time, Vilnius expressed no qualms either with the site or regarding Russia’s participation in the project. Thus, the Astravets NPP is arguably not the main root of the present political conflict between Minsk and Vilnius.

At the level of political elites, bilateral relations were never particularly warm. Lithuanian conservatives, who dominate in Lithuania both ideologically and politically, have always been suspicious of neighboring Belarus, firstly, because the latter is an ally of Russia, and secondly, because the country claims, albeit not particularly openly, to carry on the legacy of the Grand Duchy of Lithuania—the foundational cornerstone of the history and statehood myth of the contemporary Lithuanian Republic.

The Belarusian leadership, for its part, has long been irritated by Vilnius’s moralizing democratization rhetoric. And Belarus resents the fact that the capital of neighboring Lithuania became a place of residence for numerous Western political foundations working with the Belarusian opposition and a permanent meeting and training place for opponents of the Belarusian authorities. More recently, the deployment of NATO contingents in the Baltic States and Poland after 2014, amid the smoldering confrontation between Russia and the West, has caused additional tensions.

Eventually, the construction of the Belarusian Nuclear Power Plant began to further aggravate the situation. Despite the absence of complaints from the International Atomic Energy Agency (IAEA)[3] and the fact that similar nuclear plant models are being built in the European Union (Finland and Hungary), Lithuania set for itself the goal to prevent the construction of the Belarusian NPP in Astravets. To this end, the Lithuanian parliament passed a law calling the Belarusian nuclear project unsafe and a threat to the national security of Lithuania. Vilnius also imposed a ban on the purchase of electricity from the Belarusian NPP and urged Latvia and Estonia to follow suit.

Moreover, Lithuania has unilaterally blocked the negotiations of the European Union with Belarus concerning partnership priorities for several years now, using this as political leverage against Minsk. This complicates the normalization process between Minsk and Brussels and creates additional tensions between Lithuania and Belarus.

After Gitanas Nausėda came to power in Lithuania as the new president, a new trend emerged, albeit a rather weak one for now, toward softening Lithuania’s stance on Belarus. Previously, Grybauskaitė and the right-wing conservatives supporting her (the Homeland Union–Lithuanian Christian Democrats; HU-LCD) argued, in principle, against even the possibility of a dialogue with the Belarusian authorities and advocated for stopping the construction of the Belarusian NPP. In contrast, the newly elected president has suggests resuming communication with the Belarusian authorities. The monolithic position of the Lithuanian elites concerning the country’s engagement with Belarus is beginning to crack.

On August 27, 2019, Nausėda held a closed meeting with Lithuanian experts to discuss the possibility of changing the pattern of his country’s relationship with Belarus. The following September, Lithuanian Foreign Minister Linas Linkevičius met with his Belarusian counterpart, Uladzimir Makei (Makiej), on the sidelines of the United Nations General Assembly. And at the beginning of October 2019, Jaroslav Narkevič, the newly appointed minister of transport and communications of Lithuania, visited Minsk to explore the potential of transport corridors and flows. The visit took place immediately after Narkevič visited the Klaipeda seaport, which suggests that the meeting also addressed options to improve the conditions for Belarusian transit through Lithuania against the backdrop of Lukashenka’s statements about the possibility of redirecting flows to Latvia due to the strained political relationship with Vilnius.

In December 2019, at the annual conference of the Eastern Europe Studies Center, the Lithuanian president admitted that isolating Belarus had not succeed and posited that Lithuania should build new ties with this country.[4] He also stated that Vilnius was ready to help Minsk with alternative routes for oil supplies in order to preserve Belarus’s independence—a reference to the latter’s heavy reliance on Russian supplies amid the serious 2019–2020 oil pricing spat with Moscow.[5]

Overall, there has been a noticeable change in Vilnius’s rhetoric. In recent months, demands that Belarus outright scrap its nuclear plant project have been withdrawn from statements by Lithuanian officials and replaced by softened appeals: to ensure construction continues in compliance with the highest safety standards and a call to ban imports of electricity from Belarus across the entire EU common market. It has now become obvious that the Astravets power plant is an undeniable reality and will be operational in 2020. Continuous political claims in Vilnius to stop the NPP have put Lithuanian officials in an awkward position, and they are now adapting their position to this newly accepted reality.

At the same time, conservative political forces inside Lithuania (foremost, the HU-LCD party) are still actively demonstrating that they intend to thwart any normalization attempts. For example, on April 27, 2020, after a telephone conversation between Presidents Nausėda and Lukashenka, the Homeland Union convened a session of the Seimas (parliament) Committee on Foreign Affairs with the participation of Foreign Minister Linkevičius, demanding a tougher policy toward Belarus over its NPP.[6] In response, Linkevičius penned an article for Delfi, in which he criticized the position of the conservatives, saying that they should have protested against the Belarusian NPP back in 2008, when the site was actually chosen. According to him, the conservatives want to block all links and areas of cooperation between the EU and Belarus by putting forward unimplementable conditions that Lithuania’s allies cannot understand. Moreover, he noted that, for Lithuania, Belarus is an important neighbor in all dimensions.[7]

For the most part, the “securitization” of Vilnius’s relations with Belarus has not impacted bilateral the economic relations, though there have been a few important exceptions. For example, the Belarusian company Beltrouboprovodstroy was excluded from competitive bidding for a contract to build a natural gas pipeline between Lithuania and Poland in the summer of 2019. The consortium involving the Belarusian company extended the best proposal, but the government of Lithuania declared that the potential deal failed to comply with the country’s national security priorities. In July, the Belarusian foreign ministry voiced its protest against this interference of the Lithuanian government in a commercial transaction[8]. Whereas, in 2018, President Lukashenka warned of the possibility of redirecting Belarusian transit to Latvia: “You understand that we have no access to the sea; and if Lithuania is unwilling to cooperate, we should focus on Latvia.”[9]

To date, Lithuania’s diplomatic efforts aimed at blocking the Belarusian NPP have been wholly unsuccessful. Vilnius has failed to coalesce EU-wide solidarity with respect to a possible boycott of electricity eventually produced by the Belarusian nuclear power project. Lithuania was even unable to win over its closest neighbor, Latvia. During his visit to Lithuania in October 2019, Latvian President Egils Levits said that Latvia was calling for ensuring the safety of the nuclear plant in Astravets (rather than for stopping its construction altogether). Moreover, he openly acknowledged that there were differences in Latvian and Lithuanian positions on the import of electricity from Belarus[10]. Indeed, earlier, in August 2019, the Latvian government had de facto decided to buy electricity from the Belarusian NPP.[11] Further complicating Vilnius’s maximalist position, in early October, United States Secretary of Energy Rick Perry visited Lithuania and said that the US would not interfere in the debate about the safety of the Belarusian Nuclear Power Plant and advised the Lithuanian government to rely on the opinion of the IAEA as a specialized international organization. A little later, US Assistant Secretary of Energy for Nuclear Energy Rita Baranwal said the US might supply nuclear fuel to the Belarusian NPP.[12]

Assuming the global COVID-19 coronavirus pandemic does not entirely derail construction this year, the Belarusian NPP will almost certainly be completed, commissioned and launched in 2020, despite Lithuania’s opposition. Vilnius’s demands to shut down the plant will look increasingly less realistic. Following this fait accompli, the Lithuanian government will have to seek more constructive relations with Minsk. That said, any possibilities for a normalization of the political relationship with Belarus remain constrained by the Lithuanian legislation against the nuclear power plant, which will be difficult to repeal without Vilnius losing face and effectively admitting that the country’s previous policy was a mistake.

Latvia

Economic Relations

Latvia is also an important trade partner for Belarus and a major transit corridor for Belarusian export supplies to third countries. However, it is not as crucial as Lithuania for Belarusian trade.

At the end of 2018, Latvia was Belarus’s 14th-largest partner by trade turnover and 10th-largest buyer of Belarusian-made products (1.4 percent share of Belarus’s exports).

 

Belarusian-Latvian Trade in 2014–2018 (USD mln)

2014 2015 2016 2017 2018
Trade 651.8 675.2 340.0 439.7 582.7
Export 501.5 598.1 269.9 350.9 485.6
Import 150.3 77.1 70.1 88.8 97.1
Surplus 351.2 521.0 199.8 262.1 388.5

Source: Belstat[13].

 

In 2018, two-way trade amounted to $582.7 million (up by 32.9 percent from 2017), Belarusian exports to Latvia reached $485.6 million (an increase of 38.8 percent), and imports came to $97.1 million (up by 9.7%). Belarus’s trade surplus therefore amounted to $388.5 million.

Belarus mostly exports to Latvia timber and timber products, oil products, petrochemicals, metal products, fertilizers, insulated wires and cables, construction materials, and strong alcoholic beverages.

The core imports from Latvia are medications, equipment, food products, textiles and plastic products.

In 2018, Belarus exported $188.2 million worth of services (mainly transport, business, computer, telecommunications and tourist services) to Latvia (up by 29.6 percent from 2017), whereas imports of services amounted to $64.5 million (up 14.1 percent). As such, Belarus enjoyed a surplus of $123.7 million in services in 2018.

In 2018, Latvian investments in the Belarusian economy amounted to $107.5 million (down by 14.3 percent from 2017), including $82.1 million in FDI (down by 29.2 percent).

 

Latvian Investments in Belarus in 2014-2018, (USD mln)

  2014 2015 2016 2017 2018
           
Direct Investment 85.1 56.8 58.7 116.0 82.1
 Net Investment 20.9 4.6 20.6 61.1 29.7
Other 107.9 44.3 40.0 9.5 25.4
Total 193.0 101.1 98.7 125.5 107.5

 

In Belarus, there are 585 companies financed by Latvian capital. Latvian investors are mostly interested in commerce, services (e.g. restaurants, movie theatres, cable television and internet), woodworking, pharmaceuticals, food and manufacturing projects.

On February 7, 2018, the two countries’ prime ministers met in Minsk to sign an inter-governmental Memorandum of Understanding on the main areas of economic collaboration for the medium term.[14] The transport sector remains the primary strategic focus of cooperation between Belarus and Latvia. And the importance of this dimension has further increased in the wake of the deterioration of Belarusian-Lithuanian relations and the subsequent enhanced competition for Belarusian transit between Lithuania and Latvia.

The volume of cargo transit from Belarus through Latvian seaports increased by 10 percent year-on-year in 2018. Belarusian products already account for up to 30 percent of cargo transit through Latvia.[15] Riga has offered Minsk a single tariff for the entire supply corridor: the price includes transportation by rail and transshipment services via the seaports of Riga or Liepaja. As a result, the seaport of Klaipeda in Lithuania started to lose some of the traditional volumes of Belarusian transit freights.

However, one should not expect a complete redirection of Belarusian cargos from Lithuania to Latvia. Minsk is consciously choosing between competitive and commercially viable offers, which currently exist in both countries, rather than allowing exclusively political motivations to guide its decisions. Furthermore, a deliberate turn toward a single Baltic State would undermine the critical foundation of Minsk’s foreign trade policy—the diversification of marketing channels and the promotion of its transit role between the European Union and the Moscow-led Eurasian Economic Union.

When it comes to the geopolitics of transit, Belarus has demonstrated pragmatism, carefully calculating the costs and benefits before taking any serious decisions in this sphere—even under serious pressure from its powerful partner Russia. Since the Russian Federation launched the Ust-Luga seaport[16] in 2012, and especially after the crisis in Ukraine and the West’s resulting anti-Russian sanctions, the Kremlin has repeatedly attempted to cajole Belarus into reorienting its oil-product transit from the Baltic States’ ports to Russian ones. As Moscow argued, since Belarusian oil products are made from Russian crude oil, Minsk should use Russian transport companies and ports to sell these refined products abroad. Belarus, however, has consistently refused this option, as Ust-Luga is not only twice as distant as Klaipeda, but the transit costs via Russian territory were more expensive, even with the 50 percent discount offered by the Russian Railways company.

Politics: Cooperation Without Preconditions

Unlike neighboring Lithuania, Latvia has chosen not to focus on sensitive (for Minsk) questions in bilateral political relations with Belarus; Riga purposefully adheres to a constructive approach in developing cooperation with Minsk. Latvia also was and remains a consistent supporter of the Belarusian-EU rapprochement. This stance has resulted in much “smoother” relations compared with any of Belarus’s other EU neighbors.

During the 1990s and early 2000s, relations were marked by continuous high-level meetings. The prime ministers of Belarus visited Latvia in 1998, 2001, 2008 and 2010. And in 1994, 1995 and 2009, successive heads of the Latvian government traveled to Belarus. After a pause in high-level contacts due to EU sanctions (2011–2015), then–Belarusian prime minister Andrej Kabiakoŭ (Andrei Kobyakov) arrived in Latvia in November 2016 and took part in the 16+1 Summit of Heads of Government (Central and Eastern Europe plus China).[17] Then, on February 7–8, 2018, Latvia’s prime minister at the time, Māris Kučinskis, paid a working visit to Belarus.

The foreign ministries of Belarus and Latvia are engaged at a systemic level—the foreign minister of Belarus visited Latvia in February 2014, July 2016 and July 2018. In 2015, the two countries’ top diplomats consecutively met in Minsk and Riga. In April 2013, July 2017 and July 2019, the Latvian foreign minister visited Belarus.

On July 26, 2019, President Lukashenka met in Minsk with the foreign minister of Latvia, Edgars Rinkēvičs. The focus of the meeting was on the bilateral agenda as well as the development of Belarus’s relationship with the European Union.[18] In addition, the meeting de facto marked the first day of preparations for the official visit of the Belarusian president to Latvia, which was initially planned for April 2020 but then postponed because of the COVID-19 pandemic.

Consultations at the level of deputy ministers and heads of ministry departments and units are held between the foreign ministries on a regular basis. In 2014–2019, consultations centered on political, consular and legal issues, pan-European cooperation and the Eastern Partnership, security cooperation within the framework of international organizations, Eurasian integration issues, engagement with Asian countries, participation in the “17+1” cooperation format, and the North-South transport corridor.[19]

The recent (since roughly summer of 2019) conflict between Belarus and Russia over energy supplies provided a new impetus to Riga, in its communication with Minsk, to try to secure the Latvian route for Belarus’s non-Russian oil imports. In January 2020, Latvian Prime Minister Krišjānis Kariņš visited Belarus and held negotiations with President Lukashenka and Prime Minister Syarhey Rumas. Besides oil transit, they discussed direct supplies of electricity to Latvia from Belarus.[20] At present, the only route for electricity to arrive in Latvia is through Lithuania, which plans to stop buying Belarusian electric power after the Astravets plant becomes operational; if Vilnius goes through with this pledge, it will cause problems for Riga as it wants to secure balanced electricity imports. Latvia currently imports a small amount of electricity from Belarus—8.6 million kW/h in 2019. But preserving this transit route is a matter of principle for Riga. In light of these incentives, economic cooperation between the two countries is likely to intensify in the nearest future.

Meanwhile, military cooperation is actively developing as well. December 2016 saw the first official visit of the Belarusian minister of defense to Latvia. In December 2017, the Latvian defense ministry head paid a return visit to Belarus. The two countries’ ministries of defense signed multiple agreements focusing on cooperation and exchange of air traffic information. Annual action plans have been implemented to further bilateral cooperation. The chief of the General Staff of the Armed Forces of Belarus paid his first ever official visit to Latvia in September 2018. And in August 2019, the commander of the Latvian National Armed Forces made an official visit to Belarus.

Belarusian-Latvian military cooperation is part of a Minsk’s broader strategy aimed at building a regional system of confidence and security measures. Belarus consciously seeks to develop such ties with all neighboring states, including NATO members.

Finally, Belarus and Latvia collaborate within the framework of several programs and initiatives of the European Union—including the Eastern Partnership; the Latvia, Lithuania and Belarus Cross-Border Cooperation Program; and the “Country of Lakes” Euroregion. Special attention is paid to the joint implementation of projects to improve border and customs infrastructure as well as ensure the harmonization of digital markets, environmental efforts, energy efficiency and regional development.

Estonia

Since Estonia does not border Belarus and is the smallest of the Baltic States,[21] its weight in Belarus’s foreign trade and politics is far less significant compared to Lithuania and Latvia. Nevertheless, positive trends have also been observed in bilateral Belarusian-Estonian relations over the past several years.

Economic Cooperation

 

Belarusian-Estonian Trade in 2014–2019 (USD mln)

  2014 2015 2016 2017 2018 2019
Trade 154.2 101.2 105.7 112.8 180 139.8
Export 97.4 76.1 64.4 84.6 144.3 107.6
Import 56.8 25.1 41.3 28,2 35.7 32.2
Surplus 40.6 51 23.1 56.4 108.6 75.4

 Source: Belstat[22]

 

Belarus’s principal exports to Estonia include strong alcoholic beverages, salt, oil products, coke and oil bitumen, as well as potash fertilizers. From Estonia, it imports cattle, frozen fish, cocoa paste, special-purpose machines and mechanical devices, communication equipment. In 2019, Estonian investments in the Belarusian economy amounted to $45.6 million, including $42.3 million in FDI.[23]

When it comes to Lithuania and Latvia, the proximity of these countries’ Baltic seaports enable Belarus to use them to deliver its exports around the world; as a result, Belarus’s two-way trade frequently exceeds $1 billion per annum. In contrast, Estonian seaports are farther away and are mostly used to engage Scandinavian countries, which are not Belarus’s foreign trade priorities.

Nonetheless, as it builds on its export and transit diversification policies, Minsk has become increasingly interested in expanding the transshipment of Belarusian commodities through Estonian seaports as well. In May 2019, the Belarusian ambassador to Estonia, Viačaslaŭ Kačanaŭ, met with Port of Sillamäe supervisory board chairperson Tiit Vähi and port administration representatives. The meeting explored possibilities for increasing Belarusian export supplies through Sillamäe as well as the inclusion of Estonian business in the implementation of various Belarusian-Chinese projects, including those based at the Great Stone Industrial Park, just outside Minsk.[24] The Port of Sillamäe is the EU’s closest major seaport to Russia. It is the European bloc’s easternmost deep-water port, capable of working with any major ships entering the Baltic Sea through the Danish Straits.

Political Relations

Since 2014, Belarusian-Estonian dialogue has consistently intensified. In the course of the 22nd Ministerial Council of the Organization for Security and Cooperation in Europe (OSCE), held in Belgrade on December 3, 2015, the foreign ministers of Belarus and Estonia held a bilateral working meeting. Inter-ministerial consultations are now regularly held to address political, trade, economic and consular issues, as well as to discuss foreign policy analysis and planning.

In April 2015, a group for cooperation with the parliament of Belarus was officially registered in the Estonian national legislature; subsequently, Estonian members of parliament visited Minsk on three occasions. Deputies of the House of Representatives of the National Assembly of Belarus, in turn, paid a return visit to Estonia on October 29–November 1, 2017. Moreover, on October 5–6, 2017, a Belarusian delegation led by then–First Deputy Prime Minister Vasil Maciušeŭski visited Estonia. During the trip, Maciušeŭski met with Estonian Prime Minister Jüri Ratas.

During the Estonian Presidency of the Council of the EU (second half of 2017), representatives of Belarus took part in Eastern Partnership–related events organized by Estonia. Specifically, they included the meeting of the justice ministers of the EU and the Eastern Partnership (July 2017), the EU and Eastern Partnership foreign ministers’ summit meeting (September 2017), the EU and Eastern Partnership transport ministers’ meeting, the e-Partnership Conference, the second Eastern Partnership Ministerial Meeting on Digital Economy (October 2017), the Eastern Partnership Civil Society Conference, the 9th Annual Assembly of the Eastern Partnership Civil Society Forum (October 2017), and the Fourth Eastern Partnership Business Forum.

An important area for Belarusian–Estonian engagement is to ensure constructive dialogue with Tallinn in order to promote Minsk’s interests in the EU and implement projects within the Eastern Partnership initiative.[25] Work is underway on a continuous basis by concerned ministries and agencies of Belarus to implement international projects within the scope of the Eastern Partnership with the participation of the Estonian Center for Eastern Partnership.

Finally, as Belarus seeks to develop its image as an IT-state, Estonia could be interesting for Belarusian officials as an exemplary post-Soviet success story in the sphere e-commerce and e-governance.

Conclusions

For Belarus, the Baltic region has strategic importance. Due to the proximity of Baltic ports, the three Baltic States (in particular Latvia and Lithuania) serve as a transit channel for Belarusian goods—mainly fertilizers and oil products—to third countries as well as a possible route for alternative (non-Russian) oil imports. The significance of this direction for Belarus will be ever greater as Minsk proceeds with diversifying its exports and foreign policy in general following the series of its repetitive trade disputes with Russia.

That said, the importance of each individual Baltic State to Belarus differs sharply. While political relations with Lithuania remain the most problematic among all of Belarus’s neighboring states—mostly due to the dispute over the construction of the Belarusian Nuclear Power Plant—bilateral economic and trade cooperation have, for the most part, continued to develop smoothly. The Port of Klaipeda is the main sea gateway for Belarusian exports; although more recently, the situation has started to shift somewhat in favor of Latvian transit routes. Unlike Lithuania, Latvia had always refrained from putting sensitive political issues at the top of the bilateral agenda with Belarus. And this has resulted in more stable and constructive relations compared to those between Minsk and Vilnius.

Estonia stands outside of the main focus of Belarus’s regional policy, as the countries do not share a common border and their mutual trade is significantly less intensive than Belarus has with the other two Baltic States. However, Minsk recently started to consider Estonian ports as an additional perspective transit route within its broader trade diversification plans.

The case of the relationship with Lithuania proves that Minsk carefully calculates the economic costs and benefits of its international partnerships as it formulates its policy toward foreign states. When it comes to Lithuania (though other examples also exist), Belarus tends not to mix political relations and trade. This suggests that it is unlikely Minsk will switch its import-export transit routes from the Baltics to Russian ports out of political considerations or because of pressure from the Kremlin. Either way, Belarusian authorities can be expected to continue to seek additional alternative possibilities to ensure that Belarus avoids becoming dependent on a small handful of states—no matter which ones they are.

 

Notes

[1] “Foreign Trade,” National Statistical Committee of the Republic of Belarus, accessed May 10, 2020, http://www.belstat.gov.by/en/ofitsialnaya-statistika/real-sector-of-the-economy/foreign-trade/.

[2] “D. Grybauskaitė: padėsime Estijai” (D. Grybauskaitė: we will help Estonia), Lietuvos nacionalinis radijas ir televizija, June 5, 2017, http://www.lrt. lt/naujienos/kalba-vilnius/32/175229/d-grybauskaite-padesime-estijai.

[3] On June 7, 2017, an IAEA inspection team concluded a SEED mission (Site and External Events Design Review Service) and published a report on the Belarusian NPP, saying that “appropriate steps were followed to adequately address all necessary aspects of site safety and site specific design parameters for the Belarusian NPP for relevant external hazards,” https://www.iaea.org/sites/default/files/documents/review-missions/seed_mission_report_belarus_2017.pdf.

[4] Isolation of Belarus did not succeed – Nauseda, https://reform.by/izoljacija-belarusi-ne-opravdala-sebja-nauseda/.

[5] “Nauseda: Lithuania is ready to help Belarus with an alternative to Russian oil,” Reform.by,  https://reform.by/nauseda-litva-gotova-pomoch-belarusi-s-alternativoj-rossijskoj-nefti.

[6] “Šaukiamas URK posėdis su klausimais ministrui L. Linkevičiui dėl galimai apleistos Lietuvos pozicijos atstovavimo Europoje ir JAV,” TS-LKD, accessed May 25, 2020, https://tsajunga.lt/aktualijos/saukiamas-urk-posedis-su-klausimais-ministrui-l-linkeviciui-del-galimai-apleistos-lietuvos-pozicijos-atstovavimo-europoje-ir-jav/.

[7] Linas Linkevičius, “Užimtumas mažina nusikalstamumą,” Delfi, May 5, 2020, https://www.delfi.lt/news/ringas/politics/linas-linkevicius-uzimtumas-mazina-nusikalstamuma.d?id=84200367.

[8] Communication of the Belarus’s MFA, July 26, 2019, http://mfa.gov.by/press/news_mfa/f811fa3d4dbb3069.html.

[9] “Lukashenko: ‘Yesli Litva ne ochen’ khochet s nami sotrudnichat’, nado delat’ upor na Latviyu,” TUT.by, September 18, 2018, https://news.tut.by/economics/608402.html.

[10] “Lithuanian, Latvian presidents admit differences on Belarusian nuclear power imports,” Energy Central News, October 3, 2019, https://energycentral.com/news/lithuanian-latvian-presidents-admit-differences-belarusian-nuclear-power-imports.

[11] MK lemj par turpmāko rīcību elektroenerģijas tirdzniecības organizēšanai ar trešajām valstīm, Ministry of Economy of Latvia, August 13, 2019, https://www.em.gov.lv/lv/jaunumi/25474-mk-lemj-par-turpmako-ricibu-elektroenergijas-tirdzniecibas-organizesanai-ar-tresajam-valstim?fbclid=IwAR0LGLGSE6Nh7ZMaBuFrMZR7ETxlDSE0aGuRuHhILZfCKn63YpJuK9RYFE4.

[12] “SSHA mogli by postavlyat’ toplivo dlya BelAES – zamministra energetik,” Interfax.by, October 7, 2019, https://interfax.by/news/policy/vneshnyaya_politika/1265516/.

[13] “Foreign Trade,” National Statistical Committee of the Republic of Belarus, accessed May 10, 2020, http://www.belstat.gov.by/en/ofitsialnaya-statistika/real-sector-of-the-economy/foreign-trade/.

[14] Prime Ministers of Latvia and Belarus sign a number of cooperation agreements, Cabinet of Ministers of Latvia, February 8, 2018, https://www.mk.gov.lv/en/aktualitates/prime-ministers-latvia-and-belarus-sign-number-cooperation-agreements.

[15] Denis Paraskevich-Kishinevskiy, “Morskaya konkurentsiya Litvy i Latvii vyshla na novyy uroven’,” Novaya Gazeta Baltiya, April 12, 2019, http://novayagazeta.ee/articles/25241/.

[16] This port on the Gulf of Finland, at the mouth of the Luga River, is located about 30 kilometers north of Narva, Estonia.

[17] Since 2019, the framework is 17+1, with the addition of Greece.

[18] “Meeting with Minister of Foreign Affairs of Latvia Edgars Rinkevics,” Press-service of the Presidential Administration of Belarus, July 26, 2019, http://president.gov.by/en/news_en/view/meeting-with-minister-of-foreign-affairs-of-latvia-edgars-rinkevics-21637/.

[19] “Belarusian-Latvian Relations,” Embassy of the Republic of Belarus to the Republic of Latvia, accessed May 27, 2020, http://latvia.mfa.gov.by/en/bilateral_relations/.

[20] “Belarus’ prorabotayet s Latviyey vozmozhnost’ pryamoy postavki elektroenergii—Rumas,” Belta, January 16, 2020, https://www.belta.by/economics/view/belarus-prorabotaet-s-latviej-vozmozhnost-prjamoj-postavki-elektroenergii-rumas-376122-2020.

[21] By area, Belarus is more than four times bigger than Estonia and has more than seven times the population.

[22] “Foreign Trade,” National Statistical Committee of the Republic of Belarus, accessed May 10, 2020, http://www.belstat.gov.by/en/ofitsialnaya-statistika/real-sector-of-the-economy/foreign-trade/.

[23] “Trade and economic cooperation,” Embassy of the Republic of Belarus to the Republic of Estonia, accessed May 27, 2020, http://estonia.mfa.gov.by/en/bilateral_relations/trade_economic/.

[24] More Belarusian export via Estonian port Sillamae possible. Accessed November 17, 2019, https://www.belarus.by/en/business/business-news/more-belarusian-export-via-estonian-port-sillamae-possible_i_0000098599.html.

[25] “Political relations,” Embassy of the Republic of Belarus to the Republic of Estonia, accessed May 27, 2020, http://estonia.mfa.gov.by/en/bilateral_relations/political/.