Breaking Relations with the East. I. Economies are Receding

I should start with a specification that in this case the East should be considered to be regimes that tend to be authoritarian and which exist somewhere in the east (historically it turned out this way) and we cannot identif…

I should start with a specification that in this case the East should be considered to be regimes that tend to be authoritarian and which exist somewhere in the east (historically it turned out this way) and we cannot identify such a situation and argue with geography – to get closer to the standards of democracy of the European Union of Ukraine, Moldova and Georgia that are also closer to the East of the Baltic States that participate in the Eastern Partnership programme.
People are talking about the geopolitical and mental heritage of the Soviet Union and one can find more testimonies about “cooperation gaps“.
In the public domain of Lithuania, we can also find more news about actual realization of the dictator ‘s of Belarus Alexander Lukashenko threat to direct Belarussian cargos off the Baltic States. We also wrote here (the text ‘What Are the Economic Threats of the Dictator of Belarus to the Baltic Nations Worth?” that Alexander Lukashenko announced last year in August about the intention to redirect the flows of the Belarussian cargos.
On 1 September when the dictator of Belarus visited Baranovichi town, he argued his intention to redirect the carriers of freights from the Baltic States to Russia, hoping to agree with Moscow. Lithuania, Latvia, and Estonia have imposed sanctions against Alexander Lukashenko and another 29 representatives of the regime because of falsification of the presidential election results and aggression against peaceful protestors.
On 5 October after Alexander Lukashenko heard out the report of the Chairman of the State Customs Committee of Belarus Yuri Senko, he again threatened to take care of transportation of cargos, this time from Lithuania and Latvia and announced as if about 40 percent of cargo trucks arrived from Lithuania and Latvia in 2020, thus Mink would close this channel, as a result of which only Lithuanian logistic centres would fail to make about one third of the planned revenue.
We should remind that last year just in Klaipėda port 14.1 million Belarusian cargoes were transhipped, they made 30.5 percent of all loads in 2019. In 2020 the company of Lietuvos geležinkeliai LTG Cargo transported about 2 million tons of oil and its products of the Belarusian exporter Belaruskaja neftianaja kampanija (BNK). The products were transported by railway from the plant in Mozyr in Belarus to Klaipėda – the closest seaport.
He did not limit himself only with talks. Last September redirection of oil flows was discussed during negotiations of the Prime Ministers of Russia and Belarus. Also, in September Alexander Novak, Minister of Energy of the Russian Federation at that time, announced that they discussed about a possibility to redirect oil flows from the Baltic States to the North – West ports of Russia (Ust- Lug, Vysotsk and Saint Petersburg).
At the beginning of September, it was announced that decided not to renew a long-term contract with LTG Cargo that was transporting its products to Klaipėda.
Accordingly, Russia and Belarus signed an intergovernmental agreement regarding export of products of Belarusian oil (fuel oil, gasoline, and oil) on 19 February via seaports of Russia. The document was approved by signatures of the Minister of Transport of Russia Vitaly Saveliev and Minister of Transport and Communications of Belarus Aleksei Abramenko. It provides for that Belarusian companies will redirect the cargo transit of over 9.8 million tons from ports of the Baltic States to Russia in 2023.
According to the Minister Vitaly Saveliev the agreement was signed for a three-year period, however its duration is almost unlimited, because it provides for an automatic renewal. Deputy Minister of Transport of Russia Dmitry Zverev added that the first shipments of the Belarusian oil products by railway should reach ports of Russia in March. This actually happened – at the beginning of March 3.5 thousand tons of Belarusian gasoline reached Leningrad oblast via the port Ust-Luga.
Actually, the East is threatening and trying to keep these threats and maybe will keep that promise to a certain extent. Is this the end to the Baltic nations?
However, with reference to the information of the port of Klaipėda, within two months of the current year 7.5 million tons of cargoes have already been stowed there, which is 10.6 percent more than at the same period in year 2020. The growth was registered in all groups of cargoes: bulk cargoes grew by 17.8 percent, liquid cargoes- by 7 percent, so-called general cargoes – by 2.8 percent. In January and February 1,063 vessels arrived in Klaipėda, which is 10 percent more than during the same period last year.
Director General of Klaipėda State Seaport Authority Algis Latakas in this regard mentioned cautiously that although the results of the last two months are excellent, so far it is hard to anticipate the growth of loads in the coming months. However, he still expects that the increase will compensate for potential uncertainty of the coming period.
There is no doubt that all ports of the Baltic States adhere to similar cautious philosophies, which are undoubtfully based on specific risk studies mentioned above.
Probably that’s why, taking geopolitical threats into consideration, the group of state companies of national strategic importance Lietuvos geležinkeliai () announced they were planning to start new activities – to manufacture train cars that they used to buy from two Russian companies. According to , thus they would reduce the risk to national security. In 2005-2016 Lietuvos geležinkeliai purchased over one thousand train cars from the East. After technological processes are prepared the company would be able to manufacture about 5,000 train cars by 2030.
Talking about a tendency in all post-Soviet space trying to escape from the influence of the Kremlin, the actual situation is that for instance, the export of Russia to Ukraine dropped by 35 percent last year, from the Commonwealth of Independent States – by 29 percent. A portion of Russia in the structure of foreign trade of Ukraine now makes 8.4 percent (export – 5.5 percent and import – 8.4 percent). The EU has become the main partner of the country, which takes 40.7 percent of the foreign trade.
Deputy Minister of Economy, Trade and Agriculture of Ukraine and Trade representative Taras Kachka calls such a situation a piece of news of economic geopolitics. The spokesman of the President of Russia Vladimir Putin agrees with him to a certain extent and on 26 February called the bilateral trade deplorable, absolutely pathetic, however not through the fault of Kiev. Purportedly, the Ukrainian government (fighting with aggression of Moscow for seven years – A.S.) actually renounces any communications and chooses a not very friendly, even antagonistic way. Although, according to Dmitry Peskov, the potential of economic and trade relations is simply tremendous.
Spokesman of the President of Russia put out ‘resentment’ on the day when people commemorated the day of resistance to occupation of Crimea. It is logical that on the same day the Ministry of Foreign Affairs of Ukraine once again encouraged the international community to increase a political and sanction pressure to Moscow and remind again about Russian militarization in Crimea, which poses a threat not only to Ukraine.
To tell the truth, what does/can the Kremlin and its satellites expect also in economy? The opposition leader of Belarus Sviatlana Tsikhanouskaya addressing the European Parliament on 15 December, encouraged to take measures against business relations of the companies of the EU with Alexander Lukashenko regime and his allies. According to the politician, here the tolerance should be equal to zero.
On 13 January the Minister of Foreign Affairs Dmytro Kuleba in his interview to the portal of Ukraine indicated that in the negotiations regarding regulation of the conflict in Donbas we can see a set of manipulations from the Russian side: aggression, chutzpah, and evasions. The position of the Russian delegation gave an association to the Minister with a patter of children – (the quote is given not in the original language) “The ships were navigating for a long time, however they did not succeed to go through.’
Dmytro Kuleba also prompted he had no doubt in success of his country and recovering a geopolitical justice when the destroying factor of Moscow is eliminated from the economic life of Ukraine and seeking to become a member of the EU and NATO. We are not talking about trade…
The East is getting diversified in an economic point of view in the way it knows and succeeds under the present geopolitical circumstances. Last year on 7 November the resolution signed by the Prime Minister of Russia Mikhail Mishustin established a decision of Moscow to close trade missions in Lithuania and Ukraine. The Ministry of Trade produced a proposal to close them in September as if for the reason the trade missions abroad had to be optimized.
In the explanatory note of the resolution of the government of Russia in regards to the trade mission in Lithuania it was stated that it was the only one in the Baltic States and trade volume with Lithuania was drastically dropping – in the first half-year of 2020 the volume was almost three times lower than a year ago and no significant bilateral economic initiatives between Russia and Lithuania have been seen. Besides, he also mentioned that the policy of foreign economy of Lithuania did not encourage development of trade relations with Russia. According to the government of Russia, since 2014 (when aggression of Moscow against Ukraine started) Vilnius stopped activities of the committees of bilateral intergovernmental trade and economic, scientific, and technical, humanitarian, and cultural cooperation.
The decision to close the Russian trade missions in Ukraine is grounded that the government of Ukraine in August 2020 revoked the bilateral agreement with Russia regarding trade missions.
Therefore, by the same decision the government of Russia assumed an obligation to open a trade mission in Syria by the end of 2020. Some information on this partner: a civil war has been going on in this country since spring 2011 where Russia is supporting the regime of the dictator Bashar al-Assad. Over 400 thousand people were killed and almost 12 million people had to leave their homes during that war.
Such are economic and value motives of the authoritarian East, correspondingly, priorities, too. It is logical that those, who chose a civilized life, try to keep away from them as far as possible.

Arūnas Spraunius

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Autorius: Voras Online