Russia and Belarus: 2023/24 Trade and Investment Dynamics

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By Emil Avdaliani
Amid the worsened relations between Russia and the European Union; Belarus has emerged as the country most profoundly hit by the imposition of sanctions on Russia. To this should be added Western sanctions targeting Minsk itself. Ever since, Belarus has pushed for closer ties with Russia as a balancing chip to offset losses from trade with the Western countries. Results have been mixed but mostly enabling Belarus to withstand dramatic changes. The two countries have worked on safeguarding their trade from external factors. For instance, in 2022 Minsk and Moscow signed an agreement on the allocation of a loan in the amount of US$1.5 billion to finance the import substitution program.


Russia is Belarus’ biggest trade partner. By late 2022, the share of trade with Russia in Belarus’ overall commercial turnover reached almost 60%. Yet the share of Belarus in Russia’s foreign trade turnover amounted to only about 5%, indicative of the sheer size and economic heft of the latter. In 2022, the trade turnover increased to a historic high of US$43.4 billion. However, this has been driven by re-exports. Russian exports decreased by 7.7%, to US$21.3 billion, while imports from Belarus increased by 41.2%, to US$22 billion. The trend follows earlier positive developments in bilateral trade. For example, the volume of trade in 2021 amounted to US$40.1 billion. Export from Belarus to Russia amounted to US$16.4 billion, while imports hit US$23.7 billion.

Throughout 2022 and early 2023 Belarus has experienced a significant drop in imports due to sanctions imposed by the West. Imports from Russia compensated for only half of the losses in Belarus’ trade. Moreover, though Russia helped Belarus establish alternative transit routes for exporting to other countries via Russian infrastructure, a 20% drop in Belarus’ exports has nevertheless remained in place. To improve the situation Belarus is hoping to implement a further reduction in tariffs for cargo transportation by rail from Belarus to Russia’s ports, however this will need approval not just from Moscow but also within the confines of the Eurasian Economic Union (EAEU) as both are members of this free trade area.

Also, Belarus is also seeking creation of a single gas market by the end of this year. In February 2023 the two sides reached an agreement on the price of gas for the next three years, which corresponds to the price from previous year – US$128.52 per thousand cubic meters.

Imports from Russia to Belarus mostly consist of mineral fuel, oil and oil products which constitute around 25% of all exports from Russia. In addition to fuel and oil, Belarus also imports ferrous metals, copper, aluminum, pearls, precious stones and metals, bijouterie, coins, electrical machines, sound recording equipment and so on. Fuel exports are of paramount importance for Belarus which produces various oil products from Russian oil such as fuel oil, diesel fuel etc. In 2022 Russia exported about 10 million tons of oil, which was 30% less than in 2021.

As for Belarussian exports to Russia, they mostly consist of various products such as milk, vegetables, popular meat products sold in supermarket chains under the title “Belarusian Products”. Their export is important for Belarus which earns US$6-7 billion per year. In 2021 alone Russia imported about US$1 billion worth of cheese from Belarus.

Belarus also sends various machinery and equipment to Russia. In 2022 BelAZ, which produces large-size trucks, exported US$800 million worth vehicles to Russia. The exports are expected to increase further in 2023 as Russia virtually becomes the only market for Belarus.

Another interesting case is “Gomselmash” which produces various harvester machines exports up to 70% of its products to Russia. In 2021 up to 1,071 units were exported to Russia.

The two countries work on expanding their trade and overall economic cooperation. In May the Council of Ministers of the Union State discussed the success and challenges of the economic integration of the two countries. Minsk is pushing for further transport coordination with the Russia to offset the fall in transit earnings. Indeed, until 2022 European transit has been an important source of income for Belarus bringing some US$4 billion on a yearly
basis, consistuting 5–6% of the country’s GDP. Most of the transit emanated from Russia. Yet with the sanctions imposed on both countries and the traditional trade routes through Russia now being challenged belarus has seen significant decline fron transit. For instance, Belarus' GDP in January-February slowed down to 3.6% from 5%.


Though heavily sanctioned, in 2022 Belarus has managed to attract US$7 billion in foreign investment out of which foreign direct investment amounted to US$6 billion. The biggest investor is Russia (56.1%) followed by Cyprus (14.7%, often Russian overseas investment capital), and the Netherlands (4.1%). Similarly surprising are Belarus’ investments abroad. Out of the overall US$6.3 billion Belarus invested abroad, Russia attracted 87% of these
investments. In 2022, investment increased by more than 15% in comparison with 2021. The positive trend is observable in the first quarter of 2023 too when 1.3% growth (compared to the same period of 2022) in foreign investments has been recorded with Russia again topping the list.

As to actual Russian investments, numerous Russian MNCs are present in Belarus. These include Severstal Belarus, others are Russian auto companies known under various trading subsidiaries such as AvtoVAZ, headed by Minsk-Lada, as well as a KamAZ service center inBrest.

Among the Belarussian companies investing into Russia BelAZ, Amkodor, MTZ are most well known and widespread across the country’s far-flung regions. For instance, the Belarusian machine-building holding Amkodor has two operating production sites in Bryansk and Petrozavodsk. The Minsk Tractor Plant is likewise present in Tatarstan, Vologda Oblast, and most recently in Krasnodar. Earlier this year the above-mentioned “Gomselmash” unveiled an assembly plant for agricultural machinery (combines, seeders and harvesters) in Krasnodar.

The two sides are also working on another important project such as the construction by Rosatom of the Belarusian nuclear power plant in the Grodno region. The project is financed through Russian loans. The plant consists of two power units. The first of which was unveiled in 2021, while the second is expected to go online in late 2023.

In March 2023 Minks and Moscow also announced the financing of two new projects in the field of microelectronics. Situated in Belarus the two plants will be built with Russian money amounting to almost 10 billion Russian rubles (US$104 million).

Ultimately, Belarus trade with Russia is somewhat hampered by its bordering both the EU and Ukraine, meaning it doesn’t have the same extent of import-substitution capabilities that say Georgia  has. However, Moscow is keen to keep Minsk close to its sphere of influence – a situation that is likely to continue.

Emil Avdaliani is a professor of international relations at European University in Tbilisi, Georgia, and is a scholar of the silk roads.

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