Fighting Windmills "

The regulatory authorities went with checks on large retail chains, and the authorities promise to take up imports, recalling such a popular policy of manual control of trade flows as import substitution. Moving from words to action bodes little good for both market players and consumers. But it is extremely difficult to limit the demand for imported products and consumer goods, as well as to close their paths from a producer somewhere in Europe or China to a buyer from Belarus. We are investigating whether consumer imports create problems for domestic producers and what to expect if protectionist measures are taken.

Photo: Reuters

A new round in the fight against imports or intimidation of business?

At VNS Alexander Lukashenko made a complaint against retail chains that they are not actively presenting Belarusian goods to please imported ones. One of these networks, according to him, has already begun to be “cut out”. At the same time, it became known about the arrival of regulatory authorities in the Green hypermarket chain. Apparently, it became the first in the inspection of large retail chains announced by the State Control Committee, initiated in order to “understand the influence of large retail chains on the growth of imports of consumer goods and the efficiency of domestic producers in producing competitive products.”

In the context, I recall the statement of Alexander Lukashenko that “in the next five-year period we will more actively focus on import substitution”.

These reports from the authorities make one wonder whether they will undertake to regulate the import of consumer goods. Moreover, protectionism and import substitution can be considered as possible ways to increase the share of domestically produced goods in retail turnover to 75% in 2030, prescribed in the National Strategy for Sustainable Socio-Economic Development until 2030. By the way, in the same document it was planned to bring this figure to 70% by 2020, and in fact last year the share of Belarusian goods in retail was 59.8%.

There is a possibility that the announced intentions to combat imported products on store shelves are connected not so much with a return to import substitution and protection of the domestic market, as with the desire to assess the loyalty of private business. And this check will take place under the guise of fighting against imported goods. But one cannot exclude the option of real protection of the interests of local producers by means of restrictive measures for imports. After all, the struggle for space on store shelves for domestic goods began a long time ago. For example, last year, MART recommended that trade increase the number of domestic products to 85% of the total assortment.

What is the situation with imports and Belarusian products on store shelves

At the same time, the share of domestic food products in retail turnover is indeed declining, and this did not start last year or this year. Over ten years, the decline was almost 6 percentage points. In total, the share of domestic goods in retail trade has decreased by 10 points over the decade.

At the same time, imports of food products by the end of the year also decreased by 10%, and its share in the total volume of imports is unlikely to play a large role in the size of the economy. Food accounts for 8.2% of total imports, while consumer goods account for 25.4%.

In general, the dependence of the Belarusian economy on imports has been growing and decreasing with varying degrees of success over the years. The import intensity of GDP in January-October 2020 was 55.7%. In the same period of 2019, it was 65.2%. For comparison, in 2014 it was lower - only 51.9%. The main role in imports is played by goods that domestic companies purchase for further production (61%), including energy.

- If you look at consumer imports as a whole, then there is no need to say that this is a new challenge and that it is seriously growing. Overall, it has been stable, plus or minus, over the past six years. My opinion: in general, there are no problems in consumer imports, taking into account the income growth that has taken place over the past three years, says Dmitry Kruk, senior researcher at BEROC.

The economist points out that the peak in physical volume of food imports fell in 2017, and in the last three years it has been declining.

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