On April 1, 1996, Presidents Boris Yeltsin of Russia and Alyaksandr Lukashenka of Belarus signed an agreement uniting their states in a “community of sovereign republics,” or SSR, the old acronym for Soviet Socialist Republic. The Economist magazine promptly dubbed the union “silly.” The name of the new entity was later changed–it is now the Byelorussia-Russia Union State, its third name in five years–and perhaps with a nod to The Economist the founding document was postdated to April 2, the day after April Fools’.
Vladimir Putin and Lukashenka met in Moscow to mark the fifth anniversary of this inauspicious beginning. They chaired a session of the Higher Council of the Union State, the Union’s chief executive body. The Permanent Committee of the Higher Council, however, did not meet. Its director, Pavel Borodin, was quite literally detained in Switzerland (see above).
Outside the military sphere, where cooperation is close, the Union has little to show for five years of endeavor. Lukashenka has always seen the Union as a political device for securing Russian subsidies and protecting his own position. His demands for moving toward unification of the two states include:* concessions on Belarusan arrears for Russian gas,* Russian financing of joint industrial projects in Belarus,* Russian loans to stabilize the Belarusan ruble,* removal of Russian customs sheds on the Belarusan border and* shared jurisdiction for Belarus with Russia over Russia’s Baltic port of Kaliningrad.
Russia bought into the first three demands last year. Gazprom followed through with givebacks and price cuts, and Moscow has found funds for jointly owned TV and diesel-engine plants, but a currency-stabilization loan promised last November has never been disbursed. The last two demands are unanswered. Russian customs still enforces trade rules, and Russia still runs Kaliningrad with no help from Minsk.
Belarus has essentially no savings and no capital formation. Inflation is around 200 percent, and increasingly the Deutschemark and the U.S. dollar are replacing the Belarusan ruble in the country’s real economy. Cheap energy and other Russian subsidies keep Belarusan industry afloat. Moscow is unhappy with the drain on its resources, but the Kremlin will put up with it until after the Belarusan presidential elections this fall. The elections are rigged–Lukashenka has jailed, exiled, gagged and cowed his opposition–but from the Kremlin’s point of view, the less noise from Minsk, the better.