Publication: Eurasia Daily Monitor Volume: 4 Issue: 10

On January 12, Belarus and Russia signed an agreement resolving an impasse over oil transit that had led to the closure of the Druzhba pipeline (the main conduit of Russian oil to Europe) for three days. The Belarusian side agreed to pay a tax of $53 per ton on oil imported from Russia, and also accepted a tariff on exports of products from Belarusian refineries that are produced with imported Russian oil (BBC News, January 13). The oil dispute followed wrangling over the price of Russian gas, with Belarus agreeing to raise its payment from $46.68 per 1,000 cubic meters to $100 in 2007, while forming by July a joint company that will divide the Beltransgas enterprise over the next four years.

The division with Russia, in the words of President Alexander Lukashenka, was heated and dangerous, but ended peacefully (Belorusskoe telegrafnoe agenstvo, January 14). However, there are many questions being raised internally as to the significance of the energy crisis for the future of the Russia-Belarus Union. On January 14 Lukashenka criticized Gazprom’s proposal to build a pipeline under the Baltic Sea to Germany, scheduled to be commissioned by 2010, as “the most stupid” program in Russian history (Itar-Tass, January 14). He blamed Moscow for undermining the principles of the Union State and commented that the two countries have very different perceptions of what that state should entail. Belarus believes that it must be based on “the principles of equality.” However, Russia is again seeking to integrate Belarus into the Russian Federation (Interfax, January 14).

Several analysts have offered their opinions regarding the impact of the two crises on the Lukashenka administration, the Union, and the economic situation within Belarus. The former head of the National Bank, economist Stanislau Bahdankevich, believes that there could be heightened inflation and a devaluation of the Belarusian ruble. However, he predicted that no crisis would occur in the national economy for at least a year (Narodnaya volya, January 5).

Narodnaya volya correspondent Vyacheslau Orhish asserted that December’s gas crisis was not resolved by the last-minute agreement on December 31. For the first time in many years, the Belarusian regime has suffered a strategic defeat. Ostensibly, Lukashenka emerged from the negotiations with some credit. However, the important factor is that the Kremlin opted to mount a serious attack on the policies of the Belarusian leader. He has constructed an economic policy based not on market competition and free entrepreneurship, but on a quasi-Soviet model: an administrative-command system of economic management. Belarus has used Russia as a source of cheap energy resources and to cover the losses of its unprofitable companies. The notion of an “economic miracle” has suffered an irreversible blow, and the only logical egress is to transform the economy into a market system. But that would require political democratization as well (Narodnaya volya, January 4).

Political analyst Alexander Feduta, discussing the energy conflict in an interview with the newspaper Belarusy i Rynok, declared that it signified that there would be no fourth term for Lukashenka, and the concept of a union state has been buried definitively. Within four years, Belarus will experience a sharp drop in the standard of living and the president will be unable to offset popular discontent. The country might adopt the Albanian variant, i.e. a quasi-Soviet state isolated and opting to go its own path, while its young people choose to emigrate. The chairman of the United Civic Party, Anatol Lyabedzka, thinks the crisis could be potentially beneficial to the political opposition and has created new opportunities for public protests. The opposition must now develop its actions in two directions, in his opinion: mobilize the public for mass protest actions, and offer a positive form of alternative state development instead of the disastrous choices provided by Lukashenka (Belarusy i Rynok, January 8-15).

Lukashenka’s strategy of relying on benevolence and subsidies from Russia, long regarded as the natural ally, is over. Possibly Moscow was irked by the patriotic content of Lukashenka’s 2006 election: a platform of “For Belarus.” The Kremlin may also be concerned by the close links between the Communist Party of Russia and the Lukashenka regime with a Russian parliamentary election in the offing. Analyst Andrei Suzdaltsev remarked that Belarus is a cordon sanitaire that divides Russia from the West: it excludes Russian business, the joint defensive system is a myth, and Belarus can freely confiscate Russian transit goods. “Lukashenka has exhausted the trust of the Russian leaders” (RIA-Novosti, January 11). Lukashenka has become, from Moscow’s viewpoint, expendable.

The government of Belarus is clearly at a crossroads. The national television program Panorama, which reflects the government’s perspective, lashed out at the opposition for its apparent lack of concern about ways to respond to the actions of “oil and gas monopolies.” Neither Alexander Milinkevich, nor Syarhey Kalyakin, nor Vintusk Vyachorka had appealed to their friends in the West to help Belarus in a difficult time. On the contrary, “the opposition, like a whore, makes eyes at the Kremlin cavaliers” (BT, January 9). The failure of the opposition to back the president or to contest effectively the local elections on January 14 seems a secondary issue, given the government’s new disaffection with its former friends in the Russian Federation.