June 21, 2018

Economic Diplomacy: Effective Tool For Bilateral Trade Promotion

By Mr. Andrei Prokopchuk, Trade and Economic Counsellor of the Embassy of the Republic of Belarus in the Kingdom of the Netherlands.

Economic diplomacy is getting more important within the frameworks of the diplomatic community. All diplomatic representations are trying to be active in this significant area of cooperation. Belarus Embassy in the Hague is not an exception from this tendency. Nowadays, in the day to day business diplomats are more involved in trade, economic and investments relations trying to bridge companies, agencies, and business people.

Among the tools for promoting economic diplomacy could be named meetings on a high level between officials particularly in charge for the development of foreign economic relations, business forums and seminars, trade missions, bilateral and multilateral commissions, linking of the companies based on their interests.

Economic section of the Embassy is trying to apply a maximum of these tools aiming at the achievement of the practical results. Our philosophy in the Embassy in a relation of trade and investment promotion is to bridge the Dutch companies with their potential partners in Belarus using the knowledge of the economic system of Belarus as well as the market possibilities and leading branches of the economy.

The above approach led to the result that today all major well-known Dutch companies operate in Belarus where they implement a number of joint projects: production of pharmaceutical products based on blood plasma (Imres), assembly of milking robots and other agricultural machinery (Lely Industries, APH Group), agricultural production (Adama, Bejo Zaden), LED (Philips), beverages (Heineken) as well as in the field of logistics and construction.

The importance of economic dimension in our bilateral relations with the Netherlands could also be outlined by the statistic indicators.

The Netherlands are traditionally among top-10 trade and investment partners of Belarus. In 2016 bilateral trade turnover was 1,15 bln USD. Export of Belarus amounted to 924 mln USD. This indicator stated that the Netherlands became our 4th largest export partner after the Russian Federation, Ukraine, and the United Kingdom. The historic record in terms of trade was fixed in 2012 when the bilateral turnover reached 8 bln USD and the Netherlands became the second major trading partner of Belarus after the Russian Federation.

In 2016 the Netherlands became the 4th largest FDI investor (followed by the Russian Federation, Cyprus, and Lithuania) to Belarus. The total volume of Dutch investments for the last five years (2012-2016) to Belarus amounted to 4,5 bln USD.

As of January 1, 2017, there are 114 entities registered in the Republic of Belarus with the participation of Dutch capital (39 are joint ventures, 75 are foreign representative offices), the share of Dutch investors in the statutory funds of these organizations is 270 mln USD. In 2016, the authorized capital of organizations was increased for 52 mln USD. As of January 1, 2017, the total amount of cumulative foreign investments from the Netherlands in Belarus amounted to 640 mln USD (5th place after the Russian Federation, Cyprus, the United Kingdom and Turkey).

The Belarusian-Dutch economic relations also lie on formidable legislation, such as agreements on facilitation and protection of investments, on avoiding double taxation, on air communications and on international automobile communications.

To the addition of the above foundational agreements, the Government of Belarus is also constantly amending legislation aiming at creation the most favorable conditions in the region for the international companies to do business in Belarus.

Belarus success in this area is proved by the World Bank ranking. Belarus jumped to the 37th standing from No. 50 among 190 countries in the World Bank Doing Business-2017. The position of Belarus is one of the strongest among CIS countries. In the sub-ranking of the above report, Belarus took the 5th place by Registering Property index, the 31st place by Starting a Business index and the 30th place by International Trade index.

I would like to conclude that 25 years which have passed since the establishment of diplomatic relations between Belarus and the Netherlands allowed to set up, develop and enrich bilateral economic contacts as well as to build mutual trust.

I have no doubt that the next quarter of the century will be marked with further boosting of bilateral economic relations including the implementation of new remarkable projects which will lead to the new level of partnership between Belarus and the Netherlands.

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