29 March 2024, Friday, 13:49
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Regime Loses Revenue From Transport Services

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Regime Loses Revenue From Transport Services

The industry continued to bring in a lot of money even during the covid lockdown.

One of the main natural advantages of Belarus is its geographical location. We make active use of this advantage by providing transport services ourselves or allowing companies from other countries to transport goods through Belarus. So let's have a look today at the benefits this brings to the country and the consequences of losing a reliable source of currency, writes the Nashy Hroshy telegram channel.

Transport services have long been the main driver of Belarus' total export of services, accounting for an impressive 43% in 2021. The export of transport services has always brought the country very large and, importantly, stable hard currency revenues due to the constant surplus of exports over imports in this sector.

It was certainly evident how the crazy projects of our main economic partner and the global turmoil affected the figures: after the "Crimeaisours" we dropped markedly, losing about a billion dollars a year in exports, and were recovering for several years.

Even during the covid lockdown, the industry continued to bring in a lot of money. Moreover, in 2021, exports of transport services, reaching a record $4.4 billion, essentially "drove out" the country's overall export performance.

Another aspect should not be forgotten. It was our geographical location that made international companies eager to provide lucrative loans for transport infrastructure construction. Those loans were the reason why the roads in Belarus started to be upgraded on a regular basis. It will be easy to see: the time for such loans is over, let's see what will happen to the roads in the years to come.

What is happening now and what will happen soon?

Statistics show that the transport services sector is starting to plummet - the economy in this sector shrank by 7.8% between January and April and this is only the beginning, by all accounts. Obviously, this will affect the profitability of the export of services in principle and hence the export/import balance, which the Belarusian authorities have managed to keep in the "plus" until now.

It is quite possible that the export of transportation services will be the straw that will break the back of the camel, known as the "Belarusian economic miracle".

However, this is only a part of the consequences.

In the coming years, the quality of roads will rapidly and noticeably deteriorate, and there is a very high probability of the "bridge fall", which has already become a habitual phenomenon in our country. Judging by the sanctions, the country's car fleet will get worse and worse, and given the poor quality of the roads, the cars will be breaking down much faster. Add to this the fact that very soon the fleet of trucks allowed to move goods across the EU will start to shrink, with nothing to replenish it with. And even if we imagine a certain positive scenario, and assume that in a year or two the EU borders will be opened for Belarusian vehicles, it may turn out that there will be practically no vehicles to go there.

Finally, a few words about the nonsense that is being broadcasted from propaganda channels, like "we can substitute!" Reorientation of the economy is a long and complicated process, and in the Belarusian case it is not promising either. We used to trade with Europe not because somebody forced us to, but because it was profitable to deliver services there.

Just look at the statistics and you can see that the EU gives us the overwhelming share of foreign exchange earnings from the export of transport services. In terms of automobile transportation, the EU accounts for 71%, compared to 12% for the Eurasian Economic Union. In the rail transportation, the EU accounts for 58%, whereas the EAEU accounts for only 22%. It is not even necessary to add anything here, the figures speak for themselves.

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