Union of great prospects

02 April2024
Union of great prospects

April 2, the Day of Unity of the Peoples of Belarus and Russia, is not only a landmark event that has recently acquired particular relevance, but also a good reason to evaluate the effectiveness of the Union State, its ability not only to survive, but also to ensure its progressive development in the conditions of unprecedented sanction pressure from a number of unfriendly countries.

What are the results and how will the Union State (US) develop further? This question was answered in the newspaper “RESPUBLIKA” by Candidate of Economic Sciences, economic analyst Georgy Grits.

Today we can state with complete certainty: thanks to the fateful decision of the Belarusian and Russian leaders to create a community of Belarus and Russia on April 2, 1996, which was later transformed into the SG, and the legislative and, most importantly, practical framework developed over almost a quarter of a century, we managed to defend and economic and national sovereignty.

On January 30, 2024, a meeting of the Supreme State Council of the Union State (SSC) was held in St. Petersburg at the Konstantinovsky Palace, the main topic of which was summing up the implementation of the “Main Directions for Implementing the Provisions of the Treaty on the Establishment of the Union State for 2021-2023” and discussing projects new integration agreements, which should determine the main vectors of economic cooperation between the two states for 2024-2026.


On the eve of the Supreme State Council, Alexander Lukashenko noted that “the measures of the union Belarusian-Russian programs to deepen economic integration have been completed by almost 80 percent.” The practical implementation of the overwhelming number of programs, and most importantly, the level of cooperation between the Belarusian and Russian governments that has developed over the past two years can definitely be considered a landmark event. And the achievement of high indicators in 2023 is largely the result of the implemented measures, within the framework of which not only a number of fundamental decisions were made, but also impressive results were achieved.

Firstly, during 2022-2023, two new SG bodies were formed - a supranational tax committee and an interstate center for coordinating work on customs risk management. In the financial sector, agreements were signed to harmonize currency legislation and control; combating money laundering and terrorist financing; unification of accounting.


Four important intergovernmental agreements have been adopted: on a unified industrial policy, on the recognition of technological operations, the development of microelectronic technologies and the machine tool industry. General standards for access to government procurement and uniform rules of competition have been developed, and the free movement of goods, works and services has been ensured. Uniform working conditions have been created in the field of transportation and in the communications market, work has been completed on the integration of national information systems for traceability of goods, transport control, veterinary and phytosanitary control. As a result, the foundation was laid for the implementation of a unified macroeconomic, monetary, industrial and agricultural policy.

Secondly, last year the GDP growth of the Belarusian and Russian economies significantly exceeded the world average and amounted to +3.6 and +3.9 percent, respectively (world - 2.7; EU - 0.5, USA - 2.5) .

Thirdly, the historical maximum of trade in goods and services between our countries has been updated - $54 billion. Belarusian exports to Russia in 2023 increased by 9.1 percent compared to 2022, amounting to a record $25 billion. The increase in supplies to Russia made it possible to replace the loss of Belarus's shortfall in exports to unfriendly countries by more than 80 percent. And this is not the limit - the Belarusian Government in ­2024 is faced with the task of ensuring the growth of domestic exports to the Russian Federation by 7 percent compared to last year and maintaining the share of our goods in Russian imports at a level of no less than 9 percent.


Fourthly, an important element of bilateral relations is direct investment. In 2023, foreign investors invested about $7.7 billion in the real sector of the Belarusian economy. Russia took a stable first place with a share of 66.7 percent. In turn, domestic business entities sent $5.7 billion abroad in the form of investments last year, 91.2 percent of this amount went to Russia.

Fifthly, interregional cooperation is intensively developing: 81 agreements have been concluded with 73 Russian regions and about 450 agreements between the Belarusian regions and the city of Minsk and Russian regions and municipalities. An effective tool for implementing bilateral relations are joint business cooperation councils and cooperation working groups created with 80 regions of Russia. Approximately 80 assembly plants producing Belarusian equipment have been created in almost 40 regions of Russia. And in large cities of Russia, 16 of our trading houses are registered, and there is a network of branded national Belarusian stores and dealer centers.


Sixth, against the background of tightening sanctions, work on import substitution has become one of the most important priorities of union building. At the beginning of 2022, the share of foreign added value (roughly speaking, the share of imported components) in the US economy was estimated at about 20 percent, but in the manufacturing industry it reached 40. In some sensitive industries, the share of imports exceeded half: textile industry (74.8) , pharmaceuticals (53), electrical equipment (57.6), auto (56.3), computers (68.9), software (95). This objectively created a threat to the functioning of both economies.

In 2022-2023, the Ministry of Industry and Trade of Russia and the Ministry of Industry of Belarus agreed on the implementation of 23 import substitution projects with a total investment cost of 105 billion Russian rubles, of which 74 billion are Russian state loans. Currently, loan agreements have been concluded with banking institutions for 13 projects, and contracts have also been signed under which equipment will be supplied. The first five projects will be completed in 2025. Nine more projects, the amount of which amounts to almost 25 billion Russian rubles, have been sent to the relevant Russian department for approval.


Belarusian enterprises and organizations also consider import substitution as one of their priorities. Last year, the output of import-substituting products amounted to about $29 billion. By 2024, it is planned to produce such products in a volume of more than $30 billion.

In January of this year, at the Supreme State Council, the presidents of Russia and Belarus approved the strategy for the scientific and technological development of the Union State until 2035. Its main goal is to achieve technological sovereignty, the transition to innovation-oriented economic growth, and the accelerated development of import-independent Union projects and programs.


Seventhly, union target programs are another format of cooperation within the framework of the SG. According to their purpose, the SG programs are a set of joint measures to strengthen the security of the participating states, solve major socio-economic problems that cover the humanitarian sphere, industry, space, medicine, healthcare, agro-industrial complex and more. Since January 2008, when the Union Council of Ministers launched this project, ­82 ­programs have been implemented with a total amount of over 65 billion Russian rubles.

Almost half of the SG budget is spent annually on financing union programs. For example, for the current year in the SG budget the planned revenues are 6.97 billion Russian rubles ($78.4 million), expenses are 5.7 billion Russian rubles ($64 million), including the allocation of 2.632 billion Russian rubles for union programs rubles ($29 million).

One fundamental fact should be noted in this part. In 2024, however, as in previous years, the income of the Union budget was traditionally generated through contributions from the budgets of the two countries: contributions to Russia amounted to 4005.27 million Russian rubles (65 percent), and to Belarus - 2156.68 million Russian rubles ( 35 percent). As a consequence, the question arises about the involvement in the circulation of SG property that was acquired or created as a result of the implementation of SG programs, subprograms, projects and activities.

The task of forming a legal framework for unified accounting of SG property is one of the most important on the current integration agenda. It is expected that specialists from the Belarusian relevant departments, represented by the State Property Committee, and the Russian ones, represented by the Federal Property Management Agency, will introduce a special union legal act regulating issues of union property already this year. This will not only increase the revenue side of the Union budget, but also radically increase the efficiency and practice-oriented nature of Union programs.

Eighth, on February 19, 2024, the Ministry of Industry of Belarus and the Ministry of Industry and Trade of Russia signed a Cooperation Plan within the SG for 2024-2026. The relevant departments plan to consolidate the possibility of providing mutual non-discriminatory participation in national subsidy programs, preferential leasing, as well as in procurement at their own expense. After the development of the appropriate regulatory framework in each state, industrial products produced on the territory of the Republic of Belarus will be considered Russian and vice versa. Domestic scientific and industrial enterprises are given the opportunity to gain equal participation in a number of Russian import-substitution projects aimed at creating their own lines of new systemically important products with trillions of dollars in resources.

Just one of these projects. On February 28, 2024, Vladimir Putin signed a decree approving the Concept of Technological Development of the Russian Federation. This document focuses on the creation in Russia of its own lines of new system-forming products in 20 technological areas. The volume of financing of the concept's mechanisms is estimated at 3 trillion Russian rubles (55 percent of budgetary and 45 percent of private funds).

And in conclusion. The modern format of the SG, the principles underlying the bilateral relations of both countries, not only form the basis for the progressive development of the participating countries, but can also become the basis for the formation of a new world order that will take into account the interests of all participants in international relations, without losing its sovereignty.

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