Cooperation with the Republic of Latvia has always been among top priorities of Belarus’ foreign policy. Diplomatic relations between the countries started in 1992. Embassies in Riga and Minsk opened, a year later, and in 1994 consulates-general appeared in Daugavpils and Vitebsk. Diplomatic missions play a major part in supporting and strengthening good neighborly relations and cooperation in such a crucial area as foreign trade. It is a powerful incentive for developing production, expanding into new markets and integrating into the European economic space.
Searching for a common ground, mediating between public and private sectors, hunting for investors, spearheading awareness-raising and education campaigns, promoting the home country and its progressive ideas and mechanisms – this is the “daily grind” of a diplomatic mission. Marina Dolgopolova, Ambassador Extraordinary and Plenipotentiary of the Republic of Belarus to the Republic of Latvia, relates about the current situation, results, plans and outlook for the future.
- Please, tell us about the trade and economic cooperation between the Republic of Belarus and the Republic of Latvia.
— First of all, I’d like to emphasize an overall positive trend in the Belarusian-Latvian relations.
Speaking of trade and economic cooperation, Latvia is traditionally one of Belarus’ top 10 trading partners and investors. In 2015, the volume of mutual trade in commodities and services exceeded USD 800 mln. Export to the Latvian market is significantly diversified and includes more than 400 commodity items. As far as investments are concerned, 3,150 joint projects have been implemented so far.
Transport and logistics is one of the most important areas of cooperation. Latvia is the largest transit corridor for the Belarusian export to third countries: Belarusian cargos rank second in the total volume of the Latvian railway transportation. Last year more than 10 mln tons of Belarusian cargos were transported across the Latvian border with the total volume of bilateral railway freight traffic exceeding 30 mln tons.
We are delighted to see that not only transport, but also computer, communication, information, and business services demonstrate exponential growth. In 2015, their share increased by 36.8%.
Intensive contacts between state and regional authorities and business community contribute to the development of multilateral cooperation in trade and economics. Ongoing commited dialogue enables us to respond to market changes and find new forms of collaboration.
It must be noted that Vitebsk region and Latgale have extremely close contacts. For example, in May 2016, a Latvian delegation participated in the 5th International economic forum “Innovations. Investments. Prospects” that took place in Vitebsk. The delegation included representatives of the local authorities, business community, Ministry of Environmental Protection and Regional Development of Latvia, and the Investment and Development Agency of Latvia. Later, on June 2, 2016 a delegation from Vitebsk region of Belarus attended the 4th International East Baltic business forum “Latgalian economic zone – business opportunities of Daugavpils”.
As you can see, Belarusian-Latvian relations are on the rise.
- In the recent years, Belarusian Universal Commodity Exchange has been developing other forms of e-trade along with traditional exchange instruments. How popular is this area in Latvia?
— I would say that Latvian companies are clearly interested in using BUCE’s electronic trading platforms to buy Belarusian commodities. BUCE promotes its services through workshops and presentations held jointly with the Embassy and the Latvian chamber of commerce and industry. Besides, we should not forget about BUCE’s representative office in Latvia – its client base comprises more than 270 companies originating from the Baltic and Scandinavian countries, and their number is growing.
Today, besides trading traditional exchange commodities like timber, metal and agricultural products, we do our best to expand this list and, together with the exchange and the representative office, promote the industrial and consumer goods.
- What are the instruments for promotion of Belarusian exports in Latvia that you consider worth mentioning?
— First and foremost, it is the activity of the Belarusian-Latvian intergovernmental commission on economic and scientific-technical cooperation. Its meetings have been held annually since 2005. The current status of the bilateral trade and economic relations, as well as measures to bolster the mutual commodity turnover are the main issues for discussion.
The commission’s broad agenda covers cooperation in transport, logistics and transit, industry, energy, agriculture and forestry, ICT, tourism, science and technologies, education, healthcare, and cross-border cooperation.
What is more important, the commission values the opinion of the business community. The latter traditionally holds the meeting of the Council for business cooperation simultaneously with the meeting of the commission.
I cannot but mention the role of close contacts between the regions and capitals of Belarus and Latvia. Contractual and legal framework underlying this cooperation includes 56 agreements on fraternal and partner relations. In 2015, the 3rd Belarusian-Latvian forum of partner cities took place in Orsha, Belarus. The contacts between the authorities of both capitals have become regular and business-focused. For example, one of the main reasons for holding the Days of Minsk in Riga, as well as the Days of Riga in Minsk, is to promote economic cooperation.
International specialized exhibitions, visits of business delegations, thematic workshops and presentations, business forums, sectoral business meetings and B2B talks contribute to the development of mutually beneficial contacts laying the groundwork for sustainable trade and economic relations and effective promotion of Belarusian exports.
Businesses in Belarus and Latvia need regional, bilateral or multilateral platforms for cooperation and economic forums in this context are just what the doctor ordered.
Bilateral trade statistics aside, I’d like to point out that the delegation of the Belarusian business community, which took part in the 3rd Eastern partnership business forum in Riga in May 2015, was one of the largest ones.
Our operation requires extensive use of resources of business organizations, including their online infrastructure, which enables us to post commercial offers of our exporters on the websites of the Society for the Promotion of Latvian-Belarusian economic relations, Latvian Investment and development agency and Latvian chamber of commerce and industry.
Commodity distribution networks established by our exporters ensure long-term consolidation of our positions in Latvia and provide easier access to the EU market. .The advantages of this business model are demonstrated by companies that make up the distribution networks of “Belneftekhim” and “Belgospischeprom” groups. Due to their activity, Belarus holds 30% of the hard liquor market in Baltic countries and 50% of the industrial salt market in Latvia and Estonia. What is more, a joint venture formed by Minsk Tractor Works and its Latvian partner controls 35% of the country’s tractor market.
Single-channel market scheme allows to ramp up sales and increase export revenues by centralizing and simplifying customs clearance of commodities, by optimizing transportation and warehousing costs, and by promptly responding to changes in demand and prices. This helps attract credit resources of Latvian banks and use them to finance the export. It also facilitates participation in tenders and cooperation with large retail networks. It is and effective solution for promotion of light industry products on the markets of Baltic and Scandinavian countries.
- You have mentioned transportation and transit. How efficiently do Belarusian exporters use the Latvian logistics infrastructure?
— Our exporters see Latvia as a regional distribution center. Both western and CIS enterprises see Riga as a central logistics warehouse for convenient distribution of commodities all over the Baltic region.
Latvia’s transport and port infrastructure is used to export a wide range of timber, wood, chemical, metal, automotive and food products manufactured in Belarus.
We seek to improve export logistics, as it can make Belarusian products more attractive compared to similarly priced goods of our competitors.
The Embassy’s contacts allow developing optimal logistics schemes for any Belarusian cargos. Thanks to constructive dialogue, Latvia is a top-priority transit channel for Belarusian oil products. Thus, Belarusian Oil Company is involved in co-development of an oil-loading terminal in Riga free seaport.
We implement joint projects designed to attract cargos from third countries, e.g. “ZUBR” container train. Involvement of Belarus and Latvia in large-scale Chinese projects like “Silk Road Economic Belt” and “the 21st-century Maritime Silk Road” will help improve our image and promote further cooperation.
Systemic dialogue between transport departments of our countries, including the dialogue during Belarusian transport week, regular business meetings of railway administrations, meetings of the mixed commission for international road transportation are the basis for positive evaluation of our prospects in transportation and transit. Moreover, this year the Belarusian-Latvian working group on transport begins its activity.
- In your opinion, what are the most promising areas for intensification of bilateral cooperation?
-The potential for our bilateral cooperation is yet untapped, especially in the service sector.
Belarus’ initiative to harmonize digital markets of the EU and Eastern partnership countries gave a new impetus to the development of Belarusian-Latvian cooperation. Currently, the associations of information and communication technologies of Belarus and Latvia are working on its contents – specific joint projects.
Interaction with Latvian engineering companies in construction technologies and architecture creates a favorable environment for collaborative entry into construction services markets of CIS and European countries.
Another urgent topic is the promotion of our products in African and Asian countries via Latvian partners. For example, in 2015, Latvian company “Kombainserviss” established a joint venture in Mauritania and already supplied 50 Minsk Tractor Works, Minsk Automobile Plant and Amkodor vehicles to the Mauritanian market.
Taking into account the growing consumer demand on the Latvian market, we belive that cooperation with large retail networks may be extremely fruitful for our exporters. Thus, this year “Jysk” (a group of companies from Iceland) launched a large-scale project to sell a wide range of Belarusian home improvement products. These products are to be sold via 30 shops in Baltic countries. What’s more, the project provides for the establishment of “Jysk” retail network in Belarus.
We should pay serious attention to the development of exchange logistics and cargo surveying to increase the exchange transactions volume. It’s important not only to offer the commodity, but also to guarantee its quality and offer a cost-effective delivery scheme.
All these issues will be discussed with the BUCE’s Board of Directors within the framework of the 7th Belarusian-Latvian business forum. It will be held on September 16, 2016 in Riga and devoted to 4 critical topics: transport and logistics, information and communication technologies, commodities trading, finances and lending.
The event will be supported by the Latvian Investment and development agency, the Society for Promotion of Latvia-Belarus economic relations and the Embassy of Belarus in Latvia. It is planned that the officials of Belarus and Latvia, branch associations and companies, credit and financial organizations shall take part in the business forum. Let me use this opportunity to invite your readers to the forum in case you are interested in cooperation with Latvia and the Baltic region. You need to fill in the registration form on the website of the Society for Promotion of Latvia-Belarus economic relations.
— Thank you for a comprehensive dialogue. By the way, Belarusian Universal Commodity Exchange is actively preparing for the forum and promoting it among its clients and partners. So, see you there!