Why China Is Investing Big Time In Belarus
Beijing is making infrastructure investments in and around Minsk that no one else is prepared to make. It may be a gateway to business in both Europe, and Russia.
MINSK — The Chinese ambassador in the Belarusian capital is enjoying a special status. That’s because it’s unlikely any other country is prepared to make the kind of infrastructure investments here that China is planning.
There are, for example, the Minsk International Airport, hidden behind the trees, and a highway that connects Minsk with Moscow in one direction and with Berlin in the other. High-speed rail is also planned, and there are rumors that 600,000 Chinese people will be migrating to Belarus.
It’s not clear where the Chinese companies plan to market their wares, now that they will have a foothold just 300 kilometers from the EU and Russia — which has a Customs Union with Belarus. But anything is possible: China is interested in expanding to any market that its products can reach.
A village against the technopark
The blue gas pipe in the town of Bykachino, 20 kilometers from Minsk, arrived in the fall. Most of the work was done on the pipeline at around the same time that the residents in this and 13 other small towns were preparing to see their homes destroyed, to make way for the largest construction project under Belarus President Aleksandr Lukashenko — the Belarusian-Chinese Technopark.
Electronics, machinery, chemistry, biotechnology and manufacturing — it will all be there, spread out over 90 square kilometers, most of which is now forest. Technopark tenants are promised major benefits: complete tax amnesty for the first 10 years and a 50% tax cut for the second 10 years. Of course, the residents who are being forced to move aren’t getting anything like that.
There is some discussion about what “residents” means in these towns. Irina Kozel, for example, was born in Bykachino and her mother lives here, but Kozel lives in Minsk, where she works as a teacher. She and her husband built a house in Bykachino 15 years ago out of a desire to get back in touch with the land.
There are many people like her who live in Minsk but have houses in the country, and it was via the media that they discovered their property could be destroyed, with minimal compensation. After collective outrage, the government changed its mind about destroying the houses, but the general plan for development didn’t change.
“Now they say they won’t touch us for 15 years,” Kozel says. “That means we’re basically on a reservation. Then they promised to give us new land. Then what? Build from scratch again? Everyone is outraged now.”
Residents in these small villages, lost in the forest, have a guerrilla relationship with the press. They beg the media to tell people “what is being done to us,” and they claim to have gathered hundreds of signatures against the industrial park’s construction. But at the local meetings about the project, there were 299 people who showed up in support of the technopark. And only two who opposed it.
“The truth is, I don’t understand where they got that number from,” says Victor Obmetko, a local resident. “We haven’t seen any government representatives here. Everything we know about the project development, we’ve learned from the newspapers.”
Information vacuums generally breed fear — about environmental harm and the possible migration of 600,000 Chinese people to Minsk. No one knows where that number comes from, but there are genuine reasons to be worried about the environmental impact of the technopark.
The area is home to many underground lakes, which is why it was not developed during the Soviet Union. There are also two wildlife sanctuaries, several animal burial grounds, and the Petroviski reservoirs, which provide water for much of Minsk.
People are equally worried about demographic changes. “If there is a mass immigration of Chinese people, I don’t even know what language we’ll all be speaking here in a couple of years,” says Obmetko.
At the moment, though, the most concrete fear is of massive clear-cutting. “We are proud of our forest,” says Kozel, whose father helped plant the forest after the war. “No one has thought of the consequences for Minsk or for the country.”
As a last attempt to stop the massive project, Kozel and others tried to build an Orthodox church six months ago because village residents thought it would scare off foreigners. They quietly gathered signatures in support of the church, without attention from the press. But the local authorities looked over the proposal — and denied it.
A window to Russia?
There were several major presentations in China about the new technopark over the course of 2013, and they all emphasized Belarus's Customs Union with Russia and Kazakhstan — which means a location in Belarus would allow unprecedented access to markets in both of those countries.
“The government is obviously not counting on selling the goods produced in the technopark in Belarus,” explains Yaroslav Romanchuk, a former presidential candidate. “They are only thinking about how potential residents can sell on the Russian market.”
Romanchuk thinks the technopark is like a hole in the fabric of the Customs Union. “The union requires working together on questions of trade, customs and macroeconomic policies,” he says. “The technopark is an example of one country creating favorable conditions for a third country that is outside of the union, which could create problems if the project is too successful and starts to squeeze out products from Russia and Kazakhstan.”
But Romanchuk thinks there are other things that might get in the way of a successful technopark. “It's hard to consider a country where the government can’t handle inflation, and where there is no clear monetary policy, as a reliable place for long-term investment.”
For China, the project in Belarus is an attempt to expand the network of Chinese technoparks to a third continent, after Asia and Africa. It’s no secret that China has acquired a number of European companies, mostly in the PIGS (Portugal, Italy, Greece and Spain) countries, as the European Union and the International Monetary Fund have insisted that those countries privatize key state companies and industries. It’s possible that the project in Belarus will serve as a model for the red dragon to spread its wings throughout all of Europe.