IS AN ECONOMIC CRISIS LOOMING IN BELARUS?

Reports circulated on May 12 that, three days earlier, Russian President Vladimir Putin had signed a decree on fundamental changes in Russia’s trade-economic and credit-financial policies toward Belarus. In turn, the Russian gas monopoly Gazprom reportedly plans a threefold rise in the price of gas it sells to the neighboring country in 2007, which currently stands at $46.68 per 1,000 cubic meters (Kommersant, May 12). What lies behind this apparent change of policy and how will it affect Belarus as Alexander Lukashenka begins his third term as president?

It may be coincidental that such statements closely followed an important meeting between Putin and German Chancellor Angela Merkel in Tomsk on April 26. Though Belarus was not the main focus of that meeting, it was evidently discussed and the talks coincided with the arrest of several prominent leaders who took part in the Chernobyl Way demonstration in Minsk, including the united democratic candidate for president, Alexander Milinkevich, who was imprisoned for 15 days (Belarusy i rynok, May 3). Germany remains the most important individual partner of Russia within the EU and arguably the country with the most influence on the Kremlin.

On April 28, Putin and Lukashenka held a meeting at Strelnya, near St. Petersburg, at which the Russian president, most unusually, drew attention to the disparate political forces in Belarus, and asked Lukashenka whether he would be able to unite them in order to resolve the most important problems of the state (Belarusy i rynok, May 3). In Minsk in mid-April, there were circulating accounts (that could not be corroborated conclusively) that the Russian president had berated Lukashenka for inflating his vote count in the Belarusian presidential election of March 19. Subsequently, Lukashenka did not appear in public for several days. All these recent events indicate a certain dissatisfaction in Moscow with the privileged position of the Belarusian government vis-à-vis Russia, but also with the political tactics of Lukashenka.

There are different ways of interpreting Russia’s moves and they may result from international pressure, particularly in view of Russia’s forthcoming chairmanship of the G-8 summit in St. Petersburg: the Russian government’s frustration at the way oil companies exploit the economic relationship with Belarus to re-export oil from Belarus without benefit to the Russian budget; Gazprom’s insistence that Belarus cannot continue to be subsidized with gas prices well below the market level and demands for control of Beltransgaz; the declining role of Belarus as a trading partner of Russia (it has slipped from second to sixth); and Putin’s frustration at the way Lukashenka has exploited the Russia-Belarus Union ostensibly for the benefit of Belarus but with little advantage accrued to Russia. The single currency has not yet materialized and the draft version of the Union agreement continues to be discussed.

Added to these factors, however, appears to be an uncertainty — perhaps exaggerated in Moscow — about the extent of political opposition to Lukashenka within Belarus and the degree to which it may affect Russia’s relations with its European partners. The united democratic forces have continued to develop beyond the purview of an election campaign. Milinkevich, Vintsuk Vyachorka (Belarusian Popular Front), and Syarhey Kalyakin (Party of Communists) were all released from jail last weekend. However, even in their absence, small protests took place on May 1, and the Political Council adopted several measures, including the formation of a regional initiative group to create a new movement called “For Freedom.” The focal point for this new movement is the regional headquarters of Milinkevich’s presidential campaign in Hrodna (Narodnaya volya, March 11 and 12).

The new policy was elaborated by Vyachorka, who noted that street protests would continue but be strengthened by preparatory work in the regions. The democratic movement would focus on entrepreneurs, young people, students, and those working in industries that rely on imported energy resources. Vyachorka maintained that the lack of structural reform in Belarus would hinder the government’s efforts to deal with the forthcoming energy crisis. Therefore the united opposition would develop its own anti-crisis policy (Belapan, May 12). Evidently it can also solicit support from small entrepreneurs. One of the leaders of the latter movement, Alexander Makayeu, commented that “a significant portion of businessmen understand that the economic situation cannot improve without political changes” (Narodnaya volya, March 12).

The opposition’s new focus on the economy is logical, since a stable economy has long been Lukashenka’s main trump card. The question remains, however, to what extent Russia is prepared to weaken the position of the Belarusian government and whether it would contemplate seriously an alternative to Lukashenka. Clearly Belarus’s present privileged position is coming to an end as a result of a combination of factors, including pressure from the Russian government on Minsk, EU (German)-Russian discussions, and Gazprom’s demand for an end to what in effect are gas subsidies to the Union partner.

There is little evidence that Russia has any support for the democratic opposition; rather it would prefer a reduced and more compliant Lukashenka regime that is less visible internationally than over the past few months; and at least pays lip service to democratic principles and human rights. But the changing nature of the partnership offers at least a glimmer of hope to the For Freedom movement led by Milinkevich.