Diversification of Lukashenko’s Foreign Policy: China, Kazakhstan, India, Iran

Summary

In the context of Russia’s war against Ukraine and ensuing Western sanctions, Minsk sought to bolster its foreign policy, particularly towards Asian and Middle Eastern nations. However, it is necessary to distinguish between rhetorical foreign policy diversification and the one that delivers tangible results.

Analysis of bilateral relationships with China, India, Iran, and Kazakhstan indicates that the main task of offsetting foreign economic losses has been only partially achieved. At the same time, structural issues such as the unfavorable trade balance with China, insignificant trade volumes with Iran, and the capped bilateral trade with Kazakhstan remain unresolved.

Trends:

• Attempts to circumvent sanctions and gain access to new markets;

• Prioritization of political factors and declarations in foreign policy agenda over achieving favorable trade volumes;

• An increasing involvement of Belarus in Eurasian projects and organizations, including the SCO.

China: Declarations of an “All-weather” Strategic Partnership

In July 2022, as Russian troops were withdrawn from the north of Ukraine with a significant part of them also leaving Belarusian territory, Minsk announced its application to join the Shanghai Cooperation Organization (SCO). With this move, Lukashenko attempted to captivate Beijing’s attention and reinvigorate contacts between the two countries.

In September, Lukashenko attended the SCO summit in Samarkand, initiating the formal procedure for considering Belarus’ application. In the context of a reduction in Russian air attacks from the territory of Belarus, the European Union began to apply a more differentiated approach to Minsk which was considered a positive signal by Beijing.

At the SCO summit, Lukashenko and Xi Jinping signed a declaration, establishing a comprehensive and all-weather strategic partnership.1 This partnership was further solidified in March 2023 during Lukashenko’s visit to China and the subsequent adoption of the «Joint Statement of the People’s Republic of China and the Republic of Belarus on the further development of all-weather and all-round strategic partnership between the two countries»2 along with twenty-seven intergovernmental, inter-agency, and interregional agreements. This visit by Lukashenko can be viewed as the most significant foreign policy event for Belarus since the onset of Russia's war in Ukraine, with Belarus officially supporting China’s peace plan for Ukraine.

Despite these developments, a closer look at the Belarusian-Chinese relations reveals an embellishment of accomplishments and an omission of potential issues. For instance, an agreement on trade in services and investment, envisaged as a key document for future bilateral relations, is likely to clash with Belarus’ obligations within the Union State and the customs regulations of the EAEU. This conflict may consequently delay the signing of the agreement.

Belarusian propagandists often highlight the growth of trade with China, a claim that is difficult to analyze due to classified statistics. Generally, in the pre-crisis era, China was the third biggest trade partner of Belarus; today it is positioned as the second biggest trade partner.3 Although the bilateral trade between the countries is growing, this growth is not substantial (Table. 1), indicating no significant breakthroughs in exports.

Experts also highlight that in recent years, China has reduced credit and investment cooperation with Belarus. In addition, Minsk’s severe political conflict with the EU and Western sanctions have called into question the advantages of Belarus' role as a transit route for Chinese goods, further fueling Beijing’s concerns about the future of its economic relations with the country.4

Kazakhstan: increased trade to circumvent sanctions

Bilateral Belarusian-Kazakh relations are officially termed as a strategic partnership, a designation based on political rather than economic considerations. Kazakhstan has never been a priority trade partner for Belarus. Despite Belarus’ ambitions to achieve $1 billion in bilateral trade, a goal declared for many years, it has not been realized. The discrepancy in exports, geographical distance, and Russian interests continue to limit the growth of cooperation between Belarus and Kazakhstan.

However, in 2022, official Kazakh statistics reported a significant increase in trade: between January and November of 2022, bilateral trade reached $915.6 million, marking an increase of 13.4% compared to the same period in 2021. As before, a trade surplus is noted: Belarusian exports amounted to $707 million.5

This growth is primarily attributed to Belarusian state companies and enterprises using Kazakhstan to export their products, circumventing existing sanctions. In April 2023, the Belarusian Research Center published a report noting that certain Belarusian private and state-owned companies continue to export sanctioned goods, like plywood and heating pellets, to Europe through companies in Kazakhstan and Kyrgyzstan.6

Kazakh media have reported cases of European goods being transferred to Belarusian carriers before their final delivery to Kazakhstan. In April 2022, the European Union imposed sanctions on Belarusian and Russian truckers. In retaliation, Belarus banned the movement of trucks with European plates within its territory. This action led to the trans-shipment or transfer of cargo at specific points within Belarus. However, Astana objected to these practices, viewing them as direct violations of both the EAEU customs code and Kazakhstan’s national legislation.

In the summer of 2022, Astana lifted restrictions for Belarusian carriers (initially until 2023, and subsequently extended to 2024),7 but in early 2023, it introduced a ban on their registration in Kazakhstan. This action is only a partial solution as it does not fully address the issue of evading sanctions: in 2022 alone Kazakhstan registered several thousand trucks and transport companies from Russia and Belarus.

In the West, discussions are intensifying about the possible introduction of secondary sanctions against Central Asian countries, which are perceived as avenues for circumventing existing sanctions. If such measures are implemented, the recent surge in Belarusian-Kazakh trade could face a similarly sharp decline.

India: the limited market for potassium

Deputy Foreign Minister Sergei Aleynik’s visit to New Delhi in August marked the highest level of bilateral contact in Belarusian-Indian relations after February 2022.8 Although Lukashenko and the Indian Prime Minister attended the SCO summit in Samarkand, a bilateral meeting did not take place. That said, bilateral contacts are likely to intensify, as India is set to chair the SCO in 2023.

The extent to which sanctions have affected Belarus’ trade with India remains unclear due to the lack of open statistical data. Nonetheless, in early February 2022, the media reported that the Indian side planned to purchase 1 million tons of potassium, intending to pay in rupees to avoid sanctions.9 This volume is noticeably less than the usual annual import volume of 4-5 million tons. Subsequent information about increased Indian procurement of potassium from Canada, Israel and South Korea suggests that alternatives to Belarusian fertilizers are being explored.

Iran: a new old ally

Belarusian-Iranian relations have seen substantial pauses. The early 2000s experienced a surge in contact, promising significant growth. However, as international sanctions against Iran intensified in 2007-2008, cooperation was halted. Renewed mutual interest has arisen due to Belarus’ increasing involvement in Eurasian projects and organizations such as the EAEU, the Belt and Road Initiative, and the SCO, especially in the context of Russia’s war in Ukraine and EU and US sanctions.

In March 2023, after a long hiatus (the last visit being in 2007), Lukashenko visited Iran. Given Iran’s arms deliveries to Russia for the war in Ukraine, this visit drew significant global media attention. The US State Department viewed the visit as a move to deepen Iran-Russia relations to circumvent sanctions and bolster military-technical cooperation.

Following the talks, Iranian President Ebrahim Raisi and Aleksandr Lukashenko signed a road map for comprehensive cooperation for 2023-2026. While the full text of the document remains classified, areas of potential cooperation include transit of goods (particularly potassium fertilizers), construction of railway infrastructure within the North-South transport corridor, and trade in medicinal products and technological equipment.

During the visit, an ambitious target was set to elevate trade and other forms of economic cooperation to $1 billion. This goal stands in stark contrast to the 2022 bilateral trade figures of merely $100 million, and a slightly higher figure of $150 million in 2017.10 On average, Belarusian-Iranian bilateral trade does not exceed $50-70 million per year, and no clear prerequisites for the declared ten to twenty-fold increase in trade are evident.

Conclusions

In light of Russia’s large-scale war in Ukraine and Belarus’ involvement in it, coupled with the sectoral sanctions from the European Union and the United States, the importance of Asian and Middle Eastern foreign policy for Minsk has significantly increased. Despite certain achievements, however, full compensation for foreign trade losses could not be achieved.

During the war, traditional partners like Kazakhstan became means to circumvent sanctions, which largely explains the growth in trade and the establishment of branches of Belarusian companies in these nations.

China, despite its status as an «all-weather strategic partner», has not become a highly profitable partner. A continuing trade deficit marks the economic interactions between the two countries, potentially leading to future conflicts with Russian interests within the Union State.

India stands as a substantial market for numerous Belarusian products, with potassium fertilizers being paramount. However, the exact details of these transactions remain obscure. Some indicators suggest a significant decline in Belarusian exports with no signs of a breakthrough in trade and economic relations.

The overemphasis on the Middle East direction, particularly in the cooperation with Iran, stands out. Belarusian-Iranian relations illustrate the significant weight placed on political factors, despite the minimal volume of mutual trade and investment.