Thursday, July 25, 2013

Belarus: Many Belarusians Jittery Over Massive Chinese Industrial Park

RFE/RL Copyright (c) 2013. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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Many Belarusians Jittery Over Massive Chinese Industrial Park

By Claire Bigg and Inesa Studzinskaya

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July 24, 2013

China is pressing ahead with plans to build a vast industrial park in forests outside Minsk, amid growing public anxiety in Belarus.

The $5 billion manufacturing hub, a pet project of President Alyaksandr Lukashenka, will specialize in electronics, aircraft-related industry, pharmaceuticals, and biotechnologies.

Dubbed in marketing documents as "a new international city in Eurasia," it will also include research centers, conference halls, a recreation zone, and accommodation for as many as 155,000 people.

Chinese and Belarusian authorities have hailed the future complex as a unique joint venture that will give China its first manufacturing beachhead in Europe while breathing new life into Belarus's deeply depressed economy.

Construction work is scheduled to begin in December.

"The Chinese-Belarusian Industrial Park is like the nest of the phoenix from the famous Chinese folk tales," said Gong Jianwei, China's ambassador to Belarus. "It is meant to unite companies all over the world and benefit not only Belarus and China but all countries under the sun."

But Belarusians are worried.

The size of the complex, which will stretch over 80 square kilometers just east of the Belarusian capital, near its international airport, has raised concerns.

Many Minsk residents say they fear that the complex will attract thousands of Chinese workers and feel uncomfortable about the prospect of a "Chinese city" on their doorstep.

'No Ethnic Undertones'

Kiryl Karatseyeu, a former economy minister who manages the Belarusian side of the project, insists such fears are unfounded.

"There are no ethnic undertones here," he told RFE/RL. "Local employees are going to be needed to build this complex, then they will be needed for investors' projects. There are Chinese shareholders, there are Chinese funds, and there may be Chinese investments. But we are not building a city for the Chinese. What we are building, together with Chinese companies, is a manufacturing infrastructure."

The biggest concerns, however, are environmental. The territory earmarked for the project is home to pristine forest, hundreds of dachas -- or summer cottages, and a reservoir that supplies drinking water to Minsk. The reservoir doubles as a popular bathing spot in the summer.

Aksana Zelyaneiskaya, a member of a local dacha association, believes the industrial complex will cause irreparable damage to the environment. "Dacha owners don't want this park to be built here. This is one of the last clean places near Minsk," she says. "It will be an environmental catastrophe for the city. Many share this view, including government officials involved in this project. But as always, they say they are afraid of voicing their opinion publicly."

A dozen villages will be razed to make way for the park.

Those whose homes will be spared from the wrecking ball say mass construction will spoil the landscape and block access to the reservoir. Many have put their property up for sale since the scheme was unveiled last year, despite plummeting land prices in the area.

Defending 'Our Forest'

Dacha owner Anzhela says logging has already begun. "Our dachas are in the forest. Our forest is our wealth. We want to defend it," she says. "When we first came here in spring we saw piles of logs from our forest. This is just the beginning. Soon there won't be anywhere to relax. The Pyatrovitsky Reservoir, where at least 1,000 people come to bathe on hot days, will no longer exist."

Karatseyeu says the master plan for the project has been approved and confirms that trees are currently being cut down to install power lines.

The first stage is scheduled to be completed by 2020, the second stage by 2030.

To soothe concerns, Belarusian authorities have launched a public consultation online. But local residents say information on the park remains scarce and accuse the government of deliberately scheduling the closing discussion with officials for 3 p.m. on July 24, when most people will still be at work.

Zelyaneiskaya dismisses the whole exercise as "pointless."

"We tried to make sense of these colorful pictures, but it's difficult to understand anything. There are no explanatory texts, no figures, no detailed information about what kinds of products will be manufactured there and what emissions there will be," she says. "It's a pointless discussion."

Tax Breaks, Incentives

Regardless of the outcome of the online discussion, Belarusian authorities appear determined to go ahead with the park.

With Belarus's economy in shambles, Lukashenka appears to be placing his bets on China. His iron-fisted policies have deepened the country's political and economic isolation, and both the International Monetary Fund and Russia, which have contributed more than $6 billion in bailouts to Belarus since 2009, are increasingly reluctant to help.

For China, too, the scheme could be highly lucrative. The industrial park would place Chinese exporters within reach of the European Union and give them access to a cheap and educated local workforce. Belarus has a literacy rate of almost 100 percent and an average monthly salary of under $600.

In addition, Belarus is offering significant tax breaks at the future park, including a 10-year waiver on profit and property taxes for companies investing in an "advanced sphere" such as electronics or biomedicine.

The company running the project is 60 percent-owned by China' state-run National Machinery Industry Corp. and 40 percent-owned by the Belarusian government.

Mutually Assured Attraction

Barry Bosworth, an economist and China expert at the Washington, D.C.-based Brookings Institution, says the industrial park fits into China's global economic strategy.

"China wants to broaden out its space for exporting to other countries. At present, China tends to exports things that are largely branded by companies of other countries, and there are limits to how far you can expand on that basis," Bosworth says. "This is just an alternative to its prior efforts to purchase Western companies as a way to participate in the market. I can see the attraction to both sides."

The park would also give China tax-free entry into Russia and Kazakhstan, which share a customs union with Belarus.

This week, just days after Lukashenka ended an official visit to China, the Chinese Geely automobile group announced it had signed an agreement to establish a car factory in Belarus.

The plant will supply Geely vehicles to the former Soviet Union and particularly to Russia, whose automobile market is predicted to grow into the fifth-largest globally by 2020 owing to its rapidly emerging middle class.