CC BY
14
BELARUS - RUSSIA: PRESIDENTS' GAMES
Anatoly Pankovski
Summary
Belarus' multiple trade and economic conflicts with Russia, which continued in the first half of 2020, turned political. Tensions in the bilateral relationship continued to grow all the way to the presidential election and the crackdown on the first protest actions in Belarus (August 9-12, 2020). After the election, the Belarusian leadership lost its legitimacy inside the country, completely abandoned any dialogue with the West, and became critically dependent on Moscow, which largely reduced support for the Belarusian authorities. The preservation of Belarus' sovereignty and Lukashenko's full-fledged presidency were compromised.
Trends:
• Aggravated trade and economic disputes, and fewer reasons for Belarus to be part of integration projects;
• Degradation of political institutions of the two countries amid the increasing scale of the "presidents' games";
• Belarus' increased political, military and economic dependence on Russia; undermined national sovereignty of Belarus.
Alliance drama: the new beginning
The process of 'greater integration' started in late 2018 to resolve accumulated conflicts with a convergence of the regulatory framework for economic entities of Russia and Belarus was unsuccessful. It even worsened the terms for doing business.
The beginning of 2020 was marked by one of the biggest conflicts over supplies of Russian crude oil yet. For more than
four months, Minsk and Moscow had no framework oil agreement, as Belarus disagreed with Russia's tax policy. Russian oil supplies to Belarusian refineries declined to a minimum during that period.
After the Lukashenko-Putin talks held on February 7 in Sochi, Russia agreed to give independent oil producers, who were not part of the vertically integrated companies oligopoly, access to the Russian section of the Druzhba oil main. A contract was signed with Rosneft as late as mid-May to restore oil supplies to Belarus on the terms that reduced the benefits that the Belaru-sian oil refining industry had enjoyed.
The oil conflict was significant for Belarus' pendulous policy, which swung to the West. U. S. Secretary of State Michael Pompeo, who visited Minsk on February 1, stated that America was ready to fully meet Belarus' oil needs "at a competitive price."
The year 2020 was one of the rare periods in the history of Belarusian-Russian relations when Belarus resorted to procuring crude oil from sources alternative to Russia, in particular, in oil tankers via the ports of Klaipeda of Lithuania and Odessa of Ukraine.1 As a result, in the first five months of 2020, every fifth ton out of 5.4 million tons of oil processed by Belarusian refineries was purchased from alternative sources: Azerbaijan, Norway, Saudi Arabia and the U. S.
In addition to the oil supply problems, the disputes over some other strategic points arose in March-April, the natural gas price among them. As the spot prices of gas were falling in European markets, the contract price of Russian gas turned out to be 'unjustifiably' high for Belarus. Attempts to lower it produced a zero result. In late May, Belarus received an ultimatum presented by Gazprom head Alexei Miller, who stated that
1 «Альтернативная нефть и альтернативные инфраструктурные проекты.»
Belarus in Focus, 2-8 Mar. 2020, https://belarusinfocus.info/by/belarus-
rasiya/alternativnaya-neft-i-alternativnye-infrastrukturnye-proekty.
Russia was not going to revise the price under the contract in effect. Gazprom was willing to negotiate gas prices for 2021 only once Belarus had paid off its debt to the Russian monopolist, which, according to Gazprom, stood at USD 165.6 million at that time.2 Furthermore, Belarus' plan to lower the gas price through the tariff policy of the Eurasian Economic Union for the period to 2025 also failed.3
Minsk achieved a certain success in the revision of the terms of Russia's state loan for the construction of the Belarusian nuclear power plant, which had been a matter of talks for over a year and a half. Russia agreed in late April to consider Belarus' request to restructure the debt, extend the loan use period for two years, push back the date of the start of the principal debt repayment from April 1, 2021 to April 1, 2023, and apply the fixed rate of 3.3% per annum instead of the blended interest rate established before. Vladimir Putin ratified a draft protocol to the loan agreement on March 24, 2021.4
The COVID-19 response strategy was one more point of tension in the bilateral relationship. Russia followed the World Health Organization's recommendations and imposed quarantine restrictions, while Belarus chose to be a COVID dissident, criticizing the international community for its "inadequate" reaction to the pandemic.
On March 16, Russia shut its borders, including the border shared with Belarus, to prevent the spread of the coronavirus,
2 «"Газпром" заявил, что Беларусь должна за газ USD 165.57 миллиона. Минэнерго: никаких долгов нет.» Tut.by, 29 May 2020, https:// belarusinfocus.mfo/by/belarus-rasiya/pravitelstva-belarusi-i-rossii-vozobnovlyayut-peregovory-prodvizheniya-v-reshenii.
3 «ЕАЭС: стратегия есть, нет "тарифа".» Belarus in Focus, 18-24 Mar. 2020, https://belarusinfocus.info /by/belarus-rasiya/eaes-strategiya-est-net-tarifa.
4 «Путин подписал закон о реструктуризации кредита Белоруссии на строительство АЭС.» ТАСС, 24 Mar. 2021, https://tass.ru/ekonomika/10983689.
which the Belarusian leadership interpreted as a violation of the spirit of the Union. (During the pandemic, many EU countries shut their borders unilaterally without consent of their neighbors or allies.) Belarus began to severely criticize the Kremlin, saying, among other things, that Russia had ruined its health care system, and that the Russian political establishment was pandering to Western elites, rather than defending the interests of the nation.
Minsk's decision to hold the Victory Parade in Minsk on May 9, even though Moscow postponed it to a later date, added an emotional edge to the COVID-related conflict between the countries.
Middle of the story: standoff
The goals that Alexander Lukashenko and Vladimir Putin set themselves in 2020 were, at first view, supposed to promote political rapprochement between the two countries. The former was going to run for the sixth presidential term in August, and the latter was preparing for a referendum on constitutional amendments scheduled for July to extend his tenure. Things went a different way.
Independence and sovereignty were the core points of Lukashenko's election program, so the Belarusian authorities presented Russia as a hostile force that was encroaching on Belarus' sovereignty and directly interfering in the internal affairs of the country. Lukashenko's main contenders in the election were claimed to be agents of the Kremlin, who sought to destroy Belarus' statehood in the interests of "puppeteers" in the Russian ruling elite.
The Kremlin had to respond at the highest level to Lukashenko's claims that those running for president opposite him were
supported by Russian oligarchs. Putin's Press Secretary Dmitry Peskov paraded his erudition, defining "oligarch." He said that he was unaware of the presence of any oligarchs in Russia, not to speak of anyone pushing advantages in Belarus.5
Contrary to expectations voiced by some analysts, who believed that Moscow would somehow respond to the hostile takeover of Belgazprombank, which, in fact, belonged to Gazprom, and the appointment of an interim administration to the bank led by a person from the Lukashenko team, nothing like that actually happened. The Kremlin looked stoically indifferent when, at the June 19 meeting on support for the real sector of the economy, Lukashenko tried to spike media speculations about the possible transfer of the accounts of state-controlled enterprises from subsidiaries of Russian banks to Belarusian state banks. He assured that the Belgazprombank case was a separate matter.6 Finally, the scandalous detention of 33 soldiers of the Kremlin-affiliated Wagner Private Military Company in late July7 (who were released shortly without further consequences for both sides), in general, fits into a bigger picture of the Belarusian-Rus-sian relationship of that period. Minsk probably hoped that its standoff policy in relation to Russia would be understood and appreciated by the West, and, for this reason, the international community would turn a blind eye to what was going on in Belarus during the presidential election.
«Песков: в России нет олигархов, которые спонсируют оппозицию в Белоруссии.» Коммерсантъ, 10 June 2020, https://www.kommersant.ru/ doc/4376984.
«"Кукловоды" не торопят события.» Belarus in Focus, 15-21 June 2020, https://belarusinfocus.info/by/belarus-rasiya/kuklovody-ne-toropyat-sobytiya.
«Последствия громкого разоблачения.» Наше мнение, 30 July 2020, https://nmnby.eu/news/analytics/7172.html.
5
Happy end: deviation from non-interference policy
After the forceful suppression of protests on August 9-11 amid the continuing political awakening of civil society, Lukashenko began persistently seeking Putin's support. The propaganda weathercock made a U-turn from the anti-Russian to the sharply anti-Western rhetoric. Although the Kremlin recognized Lukashenko's victory right away and decided to deviate from its non-interference policy, assistance was provided in an unhurried manner, especially when it was coming to money.
Putin said on August 27 that Russia formed a reserve of law enforcers to help Belarus at Lukashenko's request, which agitated many. According to Putin, the reserve would not be applied until the "extremist element" starts "setting cars and houses on fire."8 As of early September, Russia's real assistance was limited to the deployment of propaganda 'troops' - Russian political technologists and journalists-to replace Belarusian media workers who resigned as a token of protest. This seemingly insignificant aid turned out to be essential: in many respects, thanks to the Kremlin, Lukashenko stayed in power.
Lukashenko's first foreign visit to Russia after his self-reelection for the sixth term in office resulted in limited support from the Kremlin based on the 'small-but-precious' principal. After fourteen-hour talks in Sochi, Putin promised Belarus a USD 1.5 billion loan in three tranches (two in 2020 and the third in 2021), which was the main result of the negotiations apart from moral support.
Both the size and the terms of the loan that was partly intended for refinancing Belarus' debts to Russia can hardly be
«Путин заявил о создании резерва силовиков для Белоруссии.» РБК, 27 Aug. 2020, https://www.rbc.ru/politics/27/08/2020/5f478b809a7947e 8079f1cb7.
described as a bailout. Experts called it a "credit of (dis)trust."9 In exchange, Putin asked Lukashenko to take steps to resolve the political crisis in the country and (as it seemed to him) received the latter's promise to conduct constitutional reform in the near future.
Later on, the Kremlin continued to insist on constitutional reform and nationwide dialogue in Belarus, having finally determined its policy towards the Belarusian leadership based on peacemaking and sharing of political risks. Formally, the Kremlin insists on nearly the same (although with different accents) as the EU does, thus demonstratively disagreeing with the EU's position. The "nationwide dialogue" the Kremlin keeps talking about must be controlled by political elites, in particular the Russian ones.
Eager to show that he is neither weak, nor fainthearted, Lukashenko predictably responded to the threat to "constitutional sovereignty" by making no significant steps towards constitutional reform, the content of which remains a mystery to everyone, including, by all appearances, to Lukashenko and Putin themselves. As the protests in Belarus have faded out by winter 2020/2021, Lukashenko was less and less willingly speaking about constitutional amendments, and more and more willingly about a threat from the West, trying to sell the idea of an anti-Western alliance to the Kremlin instead of initiating the transit of power.
The end of the year was much more boring and prosaic than its beginning and middle. Contrary to the experts' forecasts, oil and gas agreements for 2021 were signed without scandals on the terms set for 2020, although Belarus considered them inadequate, being Russia's closest ally.
9 «Кредит (не)доверия. РФ обещает Беларуси рефинансирование с неизвестными условиями» Экономическая газета, 18 Sep. 2020, https://neg. by/novosti/otkrytj/kredit-nedoveriya.
Belarus derived virtually no benefits from its presidency of the Eurasian Economic Union and the Collective Security Treaty Organization in 2020, but Lukashenko, nevertheless, continued making plans for the new CIS presidency with keen optimism. At the meeting with Chairman of the CIS Executive Committee Sergei Lebedev on December 19, Belarusian Foreign Minister Vladimir Makei promised that a special emphasis would be placed on the conjugacy of integration processes in the CIS and EEU and projects in knowledge-intensive industries.
Trade exchanges
In 2020, the Belarusian-Russian trade turnover in monetary terms dropped by 17.3% due to the global economic recession, COVID-19 pandemic impacts, and secondary effects of the political crisis in Belarus. The good news was that Belarusian exports fell not as much (down 4.0%) as imports (down 25.6%). The trade deficit stood at USD 3.255 billion (Table 1). This is a significant achievement compared with 2019, which was largely thanks to a reduction in oil procurement.
The trend observed in the past 10-12 years continued: the share of food supplies to Russia increased, while exports of products of Belarus' major GDP generating enterprises were in decline. According to the Belarusian embassy in Russia, Belarus' leading export items in 2020 were:
• cheese and cottage cheese - 7.6% of total exports to Russia
(up 0.7% from 2019);
• butter - 2.7% (no change year on year);
• trucks - 2.6% (down 2.9%);
• tractors and truck tractors - 2.6% (up 0.2%);
• condensed and dry milk and cream - 2.5% (up 0.6%);
• parts and accessories for cars and tractors - 1.9% (down
0.3%).
Table 1. Dynamics of Belarus-Russia foreign trade in commodities in 2014-2020, USD million10
2014 2015 2016 2017 2018 2019 2020 % against 2019
Trade turnover 37,371 27,533 26,114 32,424 35,561 35,552 29,519 82.7
Exports 15,181 10,398 10,948 12,898 12,986 13,569 13,132 96.0
Imports 22,190 17,143 15,306 19,599 22,619 21,982 16,387 74.4
Deficit -7,009 -6,745 -4,558 -6,701 -9,633 -8,414 -3,255
The top imports from Russia were:
• crude oil, including gas condensate - 21.0% of total imports of commodities from Russia (down 8.9% from 2019);
• petroleum gases and other gaseous hydrocarbons - 15.4% (up 3.4%);
• passenger cars - 3.5% (down 0.8%);
• ferrous waste and scrap - 1.7% (up 0.3%).11
Russia accounted for 47.9% of Belarus' total trade turnover: 45.2% of exports (41.5% in 2019) and 50.2% of imports (55.8%). The objective to ensure an even distribution of trade flows has been just a pious hope for years now, and Russia basically remains Belarus' non-alternative trading partner.
«Data from the interactive informational/analytical official statistics system.» National Statistics Committee of the Republic of Belarus. 29 Apr. 2018, http://dataportal.belstat.gov.by/AggregatedDb.
«Об итогах внешней торговли Беларуси с Россией в 2020 году.» Посольство Республики Беларусь в Российской Федерации, http://embassybel. ru/trade-relations/.
10
11
Conclusion
In 2020, the collapse of the post-Soviet imperial complex centered in Russia was given an extra impetus, and the political crisis in Belarus is only a part of this process. Last year, Armenia and Azerbaijan unleashed a war again, and Kyrgyzstan was engulfed in a political crisis (one more revolution). Protests continued in Russian Khabarovsk, and mass rallies in support of Alexei Navalny in Russia began in early 2021. Only one of the five EEU members - Kazakhstan - remains in a state of relative dynamic equilibrium.
Apart from internal processes, Russia showed no or little fervor towards unrests in the post-Soviet countries, demonstrating reluctance to pay money for loyalty, or intervene with military force or political authority. This concerns Belarus as well, considering that support for Lukashenko in the crisis situation did not exceed the amount of regular assistance in the previous relatively stress-free years. This trend will highly likely continue, although the upcoming 2021 elections to the Russian parliament may bring surprises.
December 8, 2021 is the 30th anniversary of the Belovezha Accords, which ended the USSR and gave a start to the CIS. Time will tell what the upcoming CIS summit in Belovezhskaya Push-cha will result in.
