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Belarus–Latvia: waiting for changes

Today the Republic of Latvia, like all the Baltic States, is going through a difficult stage in its development. Due to the coronavirus pandemic, the expected reduction in financial assistance from the EU (due to Brexit) and the departure of Russian transit cargos, economic growth rates are slowing down followed by negative public sentiments.

In the current difficult conditions, Belarus and Latvia can help each other minimize the consequences of the complex realities of our time and create the basic conditions for establishing strategic cooperation.

The recent growth in contacts between the two countries opens up new opportunities for partnership. President of the Republic of Belarus Alexander Lukashenko during a meeting on 16 January 2020 with Prime Minister of the Republic of Latvia K. Kariņš said:

"...Unlike other Baltic states, the background of cooperation between our countries is good. I believe that we need to take advantage of this moment and seriously expand our cooperation..."

Building a constructive interaction with official Riga is possible around a number of strategic areas: transport and transit, energy and investment.

The transshipment of goods through seaports is an important component of the Latvian economy. Against the background of a decrease in the interest of Russian business circles in using Latvian transit, there is a growing interest in cargo flows from Belarus and the mediation of the Belarusian side in establishing contacts with China within the framework of the One Belt and One Road initiative.

In 2023, it is planned to complete the modernization of the railway corridor from Belarus to the ports of Latvia, which will create conditions for the access of Latvian transit to Orsha. The development of the Belarusian free economic zone — "Bremino- Orsha", which began in 2019, creates the preconditions for increasing trade between the states.

Latvia’s pragmatic position regarding the purchase of Belarusian electricity from the BelNPP can also become a guarantee of building constructive cooperation.

The Latvian side claims that after the imposition of an embargo by Lithuania on electricity supplies from Belarus, the country will face a shortage of electricity, and tariffs will rise. In August 2019, the Latvian government approved a message from the Ministry of Economy, in which it was actually proposed to launch electricity trade with non-EU countries.

In addition, Latvia can become a starting point for alternative oil supplies to Belarus from ports in the Baltic Sea. There are two possible ways of transporting hydrocarbon raw materials: via the Polotsk-Ventspils oil pipeline and by rail.

The first of them is attractive in terms of minimizing transport costs, but it is associated with a number of risks.

Oil pumping to Ventspils was stopped back in 2004, and since that time, oil has been supplied only to Belarus via the northern branch of the Druzhba main oil pipeline. In 2010, the Latvian-Russian company LatRosTrans began unloading process oil from the pipeline (about 150 thousand tons of oil worth about 50 million euros). The Belarusian company Polotsktransneft Druzhba and LatRosTrans are in court proceedings on who owned the technical oil from the mothballed oil pipeline. The final point in this litigation has not yet been set, which creates a negative background for the start of negotiations on the resumption of the operation of the pipeline branch. In addition, the pipeline also passes through the territory of the Republic of Lithuania — past the refinery in Mazeikiai, which is a direct competitor to the Belarusian refineries.

Transportation of oil by rail is associated with higher costs, including financial ones. In this regard, the Freeport of Riga, through which over 1 million tons of Belarusian oil products are handled per year, proposes to expand cooperation.

In June 2015, the Belarusian Oil Company and Latvian Woodison Terminal LLC at the Eastern Partnership forum signed an agreement of intent to develop joint activities. It was noted that it is planned to modernize one of the terminals in Riga. It should also be noted that the transport leg from Riga to Novopolotsk is shorter than the distance from Ventspils or Lithuanian Klaipeda and the village of Butinge.

For the Belarusian side, the constructive position of Latvia in building a dialogue between Minsk and Brussels and removing obstacles in the field of financial and investment cooperation with the EU countries is also important. In turn, Latvian business circles are showing interest in interaction with residents of the Great Stone Industrial Park. This "pearl of the Silk Road" can become a point of attraction for capital and services of Latvian business.

We should not forget about the cultural and historical experience of relations between the Belarusian and Latvian peoples. For example, in January 2017, the neighboring countries decided to join forces and hold a joint large-scale sporting event — the Ice Hockey World Championship.