Interview of Foreign Minister Sergei Martynov for the Financial Times, 4 November 2008

FT: The reason we are interested in Belarus is sort of its outreach to the West. What’s driving that? Why is Belarus trying to improve ties with the European Union. What is behind that?

Sergei Martynov: It is not something that came out of the blue. Actually, it was our consistent position throughout recent years, when we emphasized to our European colleagues that the European Union and Belarus ought to have a different relationship. Fortunately so, as a result of those consistent efforts from both sides, there is now more understanding that we have to change the pattern of the relationship, the paradigm of the relationship. So this is part of our longstanding efforts, in fact.

Secondly, if you watch Belarus then you will see that being a country located in this particular geography, and having the economy we have, which is a manufacturing economy and economy dependent on foreign trade of exports and imports, we need to engage and secure traditional markets for us, which are Russia and the European Union, and we also have to seek new markets, which you may call the South. So we are working in parallel with what you call the West, with our traditional ally and partner Russia, and with our new partners in the South, like China, India, Vietnam, Iran, Gulf states, South Africa, Libya, Venezuela, where we try to establish our economic presence and secure our interests. The overall interest is that we want to balance the relationship, and not just to balance it between the East and the West, but we would like to have a stable foundation for our foreign policy, and, actually, independent existence of Belarus. We should have a kind of a triad – Russia, the European Union and the South.

So from this arrangement flow the efforts also with the West.

FT: As part of the design to balance out the huge influence that Russia has in Belarus, and the problems you are running to with the increasing gas prices, you need to find some sort of a balance on the West if you want to preserve Belarusian independence.

Sergei Martynov: The Belarusian independence is that this country is here to stay. For us independence is not a negotiable aspect. We are working to strengthen the independence and to strengthen the wellbeing of the country. In this work and effort to strengthen the independence and the wellbeing of the country we do not believe in a choice between Russian and the European Union. In our firm conviction, there is no such choice. It is a false assumption that we must make a choice. It’s not “either or”. For us it’s “and”. Russia and the European Union, the European Union and Russia, being situated as we are between these two economic and political giants.

So we are working on all vectors of our foreign policy to strengthen our independence and to provide for our economic wellbeing. It’s not us playing one player against other players. It would have been a futile exercise.

FT: A big issue in the past with the EU was the political nature of the regime here, which seems to improve with the release of political prisoners over the course of this year, and the process of parliamentary elections that were held last month. How important for the country is the lifting of the EU sanctions?

Sergei Martynov: First of all, it is not a regime, it’s a government at work. Secondly, it is of course important, because in the equation I tried to show you that we try to have a meaningful relationship with the European Union. Until very recently, that relationship was not meaningful enough, from our point of view.

Of course, the EU is one of our major economic partners. In terms of exports, the European Union is our number one partner. In terms of imports and general trade, Russia is our major partner. But in many other issues we have common challenges with the European Union, because we are in the same boat. We have common challenges in ensuring energy security and energy efficiency. As you may know, we are a very important energy transit country. We transport about 50 percent of Russian oil which goes to the West, and we transport about more than 30 percent of Russian gas that flows to the West.

Challenges in ensuring border security, fighting illegal migration and illegal trafficking in drugs, arms, human beings etcetera, labor migration, customs, environment, transit and transport at logistics corridors and networks. These are the areas where both the European Union and Belarus as an integral part of Europe face common problems and have common solutions to seek. So these are the areas where we not just ought, but must have a much more meaningful cooperation with the European Union than we used to have before. And today, by coincidence, with High representative from the European Commission we discussed much more in depth cooperation in these pragmatic nuts and bolts issues with the European Commission and the European Union.

Therefore, a much more meaningful cooperation with the European Union is very important for us.

FT: Who is making a more important stem in improving that relationship? Is it Belarus by making political changes or the EU wanting to…

Sergei Martynov: It is both. The two sides understood that we must work together, and we must find ways to work to be closer to each other.

FT: On Belarus’ relation with Russia. Why have you not recognized Abkhazia and South Ossetia?

Sergei Martynov: This is of course a very important issue. The emergence of two new states and their recognition by our major ally and friend and partner Russia is a very important factor of new realities. These decisions and these new realities have to be analyzed and thought through in a thorough manner, which takes time, first of all, and then important decisions must be taken in our country by the parliament.

As you have mentioned yourself, we recently had parliamentary elections. The new parliament is just setting itself in place. And as soon as it is ready to consider the issue, it will consider the issue. I have to add that we have had longstanding for decades relationship with the peoples of South Ossetia and Abkhazia.

FT: The Russians would be obviously keener to have a fast reaction on the part of Belarus…

Sergei Martynov: Well, you have to ask Russians about that.

FT: You mentioned this is going through the parliament. There was disappointment in the elections last month that the opposition did not win any seats in the parliament. Why do you think that result came out?

Sergei Martynov: The result is what it is. The opposition was not in a position to convince the voters, to convince the public that it has to support them in such a fashion that they have a chance to be in the parliament. This is the main fact that the opposition for the better or for the worse does not have enough public support.

FT: So, it was nothing to do with the procedures that were criticized by the opposition?

Sergei Martynov: Absolutely. Even if you would like to look at the criticism contained in the OSCE report, you will see that they would, even according to their figures, two thirds of international observers had no problems whatsoever in full observation of the counting process. Two thirds had no problems. And the OSCE report does not speak about any misconduct of the counting, because it never happened. So the opposition’s troubles do not have any relations to the counting process.

FT: Despite the observers’ report, the EU seems determined to improve the relations with Belarus. There was criticism, but is does not seem to affect the warming ties overall.

Sergei Martynov: As we discussed the matter with the European Union, it was an understanding that of course the EU would have liked to see probably a different terminology in the OSCE assessment. But at the same time there was a progress from the point of view of the European Union in the way how the country approached the election, how the election was conducted. Therefore, the European Union thought it possible to take the decisions it took.

FT: I would like to ask you about the search for western investments. Is that desire is not to rely on the Russian capital, why the call for western investors, to take a second look at others?

Sergei Martynov: It is not a call specifically for western investors, if you have a closer look at Belarus. It’s a call for investors.

FT: So, Russian or Western, it does not really matter…

Sergei Martynov: Yes. In our view, the view of the government, the economy is now ripe for accepting and accommodating foreign investment. Until very recently we were hesitant to engage a foreign investor in a sizable manner for one simple reason. The economy was still emerging from the havoc of the post-Soviet crush. And for any investor it was an easy game to come in and to buy half of the enterprises, half of the plants of Belarus. We did not want it to happen.

Now, as a result of the 15 years of hard effort by the government the economy is very much on its feet and running very well. You may know that for the last 10 years or so Belarus has consistently recorded a very high rate of GNP growth from six to ten percent, annually and consistently. And for the last three years we have been growing about 10 percent annually, all the time.

So the major assets of the economy the market value of which was say several million dollars a decade ago, they are now in hundreds of million.

And this is the right point for foreign investors to come and to do their job they always do to diversify the economy, to make it probably more effective, to modernize certain branches. Therefore we are opening up the economy. And this is one element: the economy is ripe for accommodating a foreign investor. The second thing is that trying to provide for that we are now rapidly liberalizing the economy, in favor of any investor, be it a Belarusian investor, a Russian investor, a UK investor, or a Malaysian investor.

And we have put ourselves a very ambitious goal. We would like Belarus within say one-year time to be within top twenty five countries of the world in terms of investment climate. We understand that we have to do a lot to achieve that, and we already did a lot. You may have noticed that in one of the recent World Bank’s reports Doing Business 2009 Belarus was in the top ten reforming economies of the world, and in these ten we were number four, so actually we did it to top five. We jumped up thirty positions in the ratings of the investment climate within several months, and we intend to continue liberalization.

So the economy is ripe, and we are opening it up, and we are making the rules hopefully comfortable for investors, be it national or foreign.

FT: Is there a risk that the economic crisis can have a negative impact on the prospects of attracting foreign investments to Belarus?

Sergei Martynov: The crisis is important, but it is not forever. Important investment decisions are not being made in a blink of an eye. So we invite investors, in particular, to this London Investment Forum on Belarus with the view to them taking important strategic decisions to come to Belarus when the crisis is over. And everybody, including us, hopes that by springtime, probably, the economy in Europe will be bottoming out and growing up. And that will be a good time to come to Belarus.

Of course, everybody would have loved not to have crisis. But this is not a bad time to speak about the future.

FT: Is there a danger for the government which has built its position on a much higher level of social equality than in other former Soviet countries, if you open up to foreign investment, you create a local class of wealthy investors not that much interested in taking upon themselves social burdens, which in turn will create political and social problems?

Sergei Martynov: One of the very important goals of this government has been what we call a socially oriented economy, not the socialism, but society oriented rather. The goal of the government is not to provide for the greedy few, but rather to the majority, as far as we can. And we are inviting foreign investors to come, fully understanding that there probably will be an impulse to some people becoming richer than other people. But at the same time we expect that a modernized economy and economy with even larger pace built in, because we have already a fast pace, will have an important effect of bringing up the wellbeing of other people. It will be like a local motive.

FT: Are you trying to reduce tariff barriers between Belarus and the European Union as well as to reduce visa restrictions which impede traveling?

Sergei Martynov: On the economic barriers we have as you probably know an ongoing effort within the Eurasian Economic Community where we have six countries-members. Three of them, three largest economies – Russia, Belarus and Kazakhstan – are forming a customs union. So we are working now to harmonize our customs tariffs, including of course with the European Union, and create a full-blooded customs union.

But the level of tariffs is not that high, and tariffs as such are basically not a problem in out trade with the European Union. Now we are discussing with the EU as a matter of a fairly close perspective to have arrangements whereby we will be in a position in a mutually advantageous manner to lower certain things, to provide for more trade between Belarus and the European Union, including in an assimetrical manner to do that, taking into account a larger economic capacity of the EU.

So it’s something which is on the agenda along with the customs union, which is very important.

On visa travel, I have to tell you that it has been our consistent position throughout the years that there should not be visa barriers in the way of people’s travel. Even now, when we are discussing with the European Union, we emphasize to our European partners that the current visa regime for Belarusian citizens in the European Union is way too complex, bureaucratic, expensive and slow. This is a barrier to free people’s travel. We are all in favor of free travel. Even as the European Union introduced Schengen visas for Belarus, we responded, being a middle-size European country and not the wealthiest country in Europe, we responded by much cheaper visas for the Europeans, especially our neighbors than the visa fee which was introduced for our citizens.

But, again, we are looking forward to more cooperation with the European Union for facilitation of visa regime.

FT: Is there a big impact on Polish-Belarusian border?

Sergei Martynov: It is no as much about words, it’s about people traveling. Of course it affected it negatively. The number of EU visas issued on both sides has gone down quite significantly. So this is an obstacle, and we want it to be removed. What is very important is that our neighboring countries like Lithuania, Poland are among the countries we are most vocal in the European Union for facilitating the visa regime to make it much cheaper and much faster. Especially that the Belarusian side is a partner of excellence, I would say, of the European Union in fighting organized crime, illegal trafficking, etc.

So, the security concerns have to be taken and taken care of by justice and internal ministries’ cooperation

FT: What is Belarus’ position on missile defense systems the Americans want to build in Poland and the Czech Republic?

Sergei Martynov: We don’t see the military point for having these systems in those countries. The establishment of new military infrastructure so close to our neighbors creates concerns for us. We believe that this part of Europe and Europe as a whole would be better off without those systems.