Posts Tagged Belarus-Russia Union

EU or EU

Twenty years ago the Soviet empire broke into independent pieces. It’s a very good moment for Putin – who considered the break-up “a geopolitical catastrophe” – to launch his Eurasian Union to relieve its phantom pains of the new post-Soviet states.

The Eurasian Union is presented as a purely economic integration project to unite the markets of Belarus, Kazakhstan and Russia, to begin with.

But there is nothing as political as an economic integration project with Russia. As Putin once put it: wars for land are pointless today, as you can just buy it.

The Union can look to its predecessors. The pilot version – the Union State of Belarus and Russia – got stuck somewhere between oblivion and non-existence. There is also the Commonwealth of Independent States, the Collective Security Treaty Organisation, the Eurasian Economic Community, Eurasian Economic Community of Belarus, Kazakhstan and Russia and – last but not least – the Customs Union of Belarus, Kazakhstan and Russia.

The Kremlin’s neo-imperial ambitions start and end with the immediate neighbourhood and have a strongly nostalgic flavour. The Eurasian Union looks like a set of crutches for three authoritarian regimes with different (and to some extent incompatible) economies to cling together for survival.

Russia’s main export is gas and oil. Its import is everything else. The most significant part of the Belarusian budget is exports of processed Russian oil. Russia is an important market for Belarusian products, but no Russian oil means no state budget. But considering popular protests around Belarus and Russia, economic stability is more than ever a necessity in these countries.

Twenty years have gone by and Belarus’ choice between the EU and the EU (the Eurasian Union) is not political but purely geographical as it still borders on three EU member states and Russia.

Brussels expects Belarus to embrace democracy before any integration can go ahead. The regime in Minsk has ignored Brussels’ unilateral offer to liberalise visas. Politically, the offer from Moscow looks unbeatable as it contains no uncomfortable conditions on structural reforms, liberalisation and respect of democratic values.

But the latest-model union means for Belarus an even tighter hug by the Russian bear. The common market excludes access to Russian gas and oil. And the formula for gas prices is always open to re-calculation and re-negotiation, depending heavily on the good political will of Moscow.

So the Eurasian Union, another integration project with Russia: It’s like a bad dream, not even a nightmare, because it’s all too familiar.

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Status Quack

And still I am not impressed. A media war between Russia and Belarus? It was to be expected after years of a “gas for kisses” policy and recent milk, sugar and hydrocarbonate border battles. At least now Minsk’s rhetoric is very clear: Belarusian foreign interests are purely economic, be it a brotherly neighbour or a God-given neighbour.

Of course, it’s not every day that Russian TV shows hastily prepared documentaries accusing the head of the neighbouring country of being affiliated to the forced disappearances of political opponents – in 1999-2000. It seems the Russian leadership doesn’t have (or doesn’t want to reveal?) any sleaze on Lukashenka.

By playing so openly, Moscow is putting up the ‘Love Over’ sign and exerting pressure before presidential elections in Belarus, pushing for more loyalty.

But you can’t beat Belarusian state media in Belarus.

The Russian documentaries weren’t shown in Belarus at all, first hand. As an immediate reaction there was an interview (very poorly prepared as well) with the Georgian president. This gave Saakashvili a chance to criticise the Kremlin and mock its politics. Soon afterwards there was an interview with another Russian ‘favourite’: Latvian president Valdis Zatlers. He didn’t talk about Russia, but praised the EU and was hopeful about the fruit of the EU’s Eastern Partnership, in which Belarus participates.

The power of the state controlled Belarusian TV channels is amazing: the masses tend to use quotes from the repeatedly aired news reports without noticing it. As a result, people believe that Russia deviously turned its back on Belarus and EU Commissioner Fuele visiting Minsk never raised the question of human rights as Lukashenka said. Russian reports are seen as propaganda and Fuele’s repudiation couldn’t possibly have a wide outreach.

It’s all because the Kremlin wants to topple Lukashenka, Western media reports. Sorry? Topple who? And to get who? If it’s true, it could only be a very long-term goal. Belarusians barely recognise cabinet members. To say nothing of political leaders or businessmen. Everything begins and ends with the same and only person. TV news is Soviet style – “all about Lukashenka and the weather forecast.” If Lukashenka goes, the whole system will have to be rebuilt – and that means towards a demonstrably democratic style.

As with any neighbour Belarusian stereotypes about Russia are clearly divided: Russian culture, Russian people, Russian leadership. For example: the Belarusian private sector is very positive about the EU. People prefer fair play and steady business rather than the Russian “clique is always right” style and rule by the strong.

The EU is also a very attractive destination for education. Amazingly, after all these years of abstention, Lukashenka has tasked the government with starting the procedure of making Belarus a participating country in the Bologna Process.

Belarusian future development and economic benefits are now contrasted with Moscow’s potential economic pressure and the EU’s diplomatic pressure. The choice is pretty limited: a more or less pro-Western or pro-Russian Lukashenka. Still not a zero sum game.

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Tug-of-Gas

Ooh, exciting! What do you understand better – Star Wars or the gas wars? The latter, you said? Are you from Gazprom?

I don’t understand much about the gas wars. But one thing is very clear: it’s all politics and has nothing to do with economic relations.

On Wednesday Belarus authorities suddenly broke silence. The First Vice Prime Minister came into the spotlight to explain who owes what and why. Now Belarusians understand more about national gas transit matters than their own monthly utility bills.  But there still a lot of why’s left.

To cut a long story short: Moscow gave Belarus five days to pay back the difference between what it was paying since January 2010 and the price that Russia expected for its gas. After five days and no money Gazprom started cutting the gas off.

After a couple days (and a 60 percent cut in gas supply) Minsk announced (whoops!) that Russia owes almost the same sum for transit: Gazprom did not pay for Belarusian services since November 2009 and Belarus itself started cutting off the gas going to Europe…

Why couldn’t they have settled these matters long ago? Why did Minsk keep silent over its position for so long? Why was Moscow suddenly so harsh and decisive? And Minsk so carelessly and bravely pro-active?

On Wednesday the Vice Prime Minister announced that Belarus has paid its dues and gave Russia 20 hours to do the same. Moscow sent its money on time. The tug-of-gas is over for now.

It’s interesting that the sums of the debts don’t square up: Gazprom wanted $192 million and got $187 million, Belarus demanded $260 million and received $228 million. Where does the difference come from? From politics. The contracts have formulas, and presidents meet to bargain and negotiate these formulas. Then afterwards they still believe they can pay what they see fit and then hope to persuade each other that the new price is OK.

And everyone was satisfied with the set-up until the day came they couldn’t agree.

The main stumbling block is the Customs Union of Belarus, Kazakhstan and Russia. Minsk has a lot of problems with this creation, but the biggest is oil: there will be customs and duties for the Russian oil coming into Belarus (but not to Kazakhstan!). And we just can’t agree to it – duties are out question for the Union State of Belarus and Russia, they can’t be imposed.

There are a lot of things to discuss now (gas price, transit price, Customs Union) and any of them might be sensitive for Belarus on the eve of presidential election.

One more thing is clear: the Belarusian style of leadership is useful for the Kremlin. It’s unpredictable and hard to deal with. But it won’t be invited to join the EU or Nato any time soon. So it’s worthwhile having it on a short leash of not-really-market but not-really-brotherhood relations.

It’s the end of the gas war, but only for the EU (and only for now?). There are still a lot of why’s and what-comes-nexts for Minsk and Moscow, which might see the beginning of a new war of nerves. And a break-away story for Belarus?

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Don’t Stop the Flow

It’s the New Year! Time to negotiate new oil and gas contracts!

Every year people hope that the consumers of Russian gas and oil will agree with Moscow on new deliveries. But same old, same old. We don’t even know the true nature of the political and economic deals that underlie the negotiations every December and January. Official information is very scarce.

If you go to a shop for a bottle of cognac, you look at the price and take out your wallet to pay. The energy problems are the result of lack of transparency, of the triumph of geopolitical considerations over mathematical formulas in calculating energy prices and of the desperate dependence of a number of countries on Russian supplies.

I get the impression that the Kremlin considers the annual hydrocarbon disputes to be mere lovers’ tiffs: “Hey, no harm done, we’re still neighbours.”

One year ago Ukraine, and later a large chunk of the EU, suffered shortages of Russian gas. The year 2010 started with the Belarus-Russia oil row. Funnily enough, the oil dispute arrived at the same time as the new Customs Union of Belarus, Kazakhstan and Russia, which came into existence on 1 January. Moscow and Minsk are now continuing talks on a new oil agreement, following a spat over transit tariffs.

Russia says oil deliveries to Belarus were stopped on 1 January and resumed three days later. Belarus says that oil is being delivered continuously. But it has threatened to cut electricity supplies to Russia’s Kaliningrad enclave due to the lack of a tariff agreement. Lithuania, which was forced to close its Ignalina nuclear plant at the end of last year is watching nervously.

Belarus buys Russian oil for internal purposes as well as for refining and selling it on to Europe. To get a share of Belarus’ oil incomes, Russia imposed a reduced duty – around one third of the levy applied to other countries – on crude oil sold to Belarus. This arrangement expired last year, with Minsk claims that crude oil should be supplied free of duty within the Customs Union. Moscow offers no reductions. But could think of some 5 million tons of oil that Belarus will be getting duty-free for its internal needs.

Meanwhile frosts, expectations of an improving economy and the Minsk-Moscow dispute have catapulted crude oil prices to their highest close in nearly 15 months, hurdling $81 a barrel.

And it remains highly symbolic that the commercial situation around the oil pipeline, which is called Druzhba (the Russian word for “friendship”), is as messy as the broader efforts to create a Russia-Belarus strategic partnership. Russian deputy prime minister Igor Sechin assured that talks on oil deliveries would be continued due to the pair’s “exclusive” bilateral relations. And the talks are still going on…

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Medvedev Goes West

Russian President Dmitri Medvedev has given his first ever interview to Belarusian journalists from state and independent media. Nothing special, you might say? You’d be right.

The invitation to Moscow came out of the blue. Why? Why now? What would be his message? Was he going to spank Lukashenka, the Belarusian president, in Lukashenka’s own usual manner? Lukashenka has a tradition of inviting several dozen representatives of Russian regional media to first impress them with tales of enterprises in local villages and then to follow-up with three hours of harsh anti-anything rhetoric on national TV and radio.

Medvedev was highly diplomatic and discreet though. No sensations.

The Russian President called on Lukashenka to restrain himself from making “politically incorrect remarks” about the Russian government.

He assured that Russia had never tried to interfere in Belarusian internal affairs.

For instance, Medvedev said he had never, personally or officially, asked his Belarusian counterpart or other Belarusian officials to recognise the independence of Abkhazia and South Ossetia. He said it would be good for Russia, but that this is an internal affair of Belarus. And that it was Mr Lukashenka who had himself repeatedly assured the Russian leader that Belarus would consider this issue favourably.

Medvedev said he plans to hold regular meetings not only with Belarusian journalists, but also Belarusian politicians and probably even with the opposition. When foreign representatives come to Moscow they also meet with Russian opposition: It’s normal, he said.

The Russian president calculated that Russia has invested about $50 billion in the Belarusian economy since 1991. During the last two and a half years Minsk received loans from Moscow worth almost $3 billon. Next year Russia will sell natural gas to Belarus at a rate that is 30-40 percent cheaper than for other countries in the region.

He even underlined that Belarus should be pronounced “Belarus” not “Belorussia,” as most Russians say it.

In a contradiction of the same message, the news editor of the biggest Belarusian portal, TUT.by, found herself sitting in front of a sign which said TYT.ru. Freud would have loved it! As if psychologically, the Russians do not see any other domains in the region but their own, even internet domains.

It was also interesting that Belapan, the news agency I work with, managed to win over the Kremlin in bargaining about the conditions of the media invitation.

The Russian press-service originally asked us not to report that we had been invited, refused to say who else was coming, what would be the length and format of the meeting and requested three our questions in advance. All this would be OK, I suppose. But they also told us that any articles would have to be based on the Kremlin’s official transcript of the discussions and could only be published after a date that they would reveal down the line.

An hour after Belapan sent an email explaining the reasons why it was forced to refuse the invitation, the Kremlin press-service called the office to inform us that they had changed the conditions for Belarusian journalists. The Belarusian media even got a 30-minute head start on the publication embargo.

So why was Medvedev talking to the Belarusian press, which actually enjoyed his witty and self-assured manner?

Russian experts say: It’s much ado about nothing. His messages have anyway lost their value. Only time will show what it was all about.

Belarusian experts say Medvedev is trying to rattle the nerves of his Belarusian counterpart. It’s in the Russian tradition: As relations with Minsk officials get less friendly, they try to mend ties with opposition. Or: It was another way for Medvedev to show he is an independent political figure who might run against Vladimir Putin in 2012.

Lukashenko reacted in his usual manner. He said it was a “meaningless” exercise. He wondered why the Kremlin invited journalists who “hate the Russians’ guts”. They could have asked his advice about how to handle the media, he said.

On 27 November Medvedev will be in Minsk for a regional meeting. We will probably learn more in Chapter 2 of this political tale.

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Warm-Warm-… Hot?

Today they say it’s today: the transit of Russian diesel oil through Belarus to Latvia will be resumed. A week ago Minsk ordered to stop the flow through the Belarusian section of the pipeline owned by a Russian company demanding to fix hundreds of defects.

The problems sound conomic but they are political. Latvia is not getting its diesel oil because of the complexities in Belarus-Russia relations.

Minsk is losing the dearest – its reputation of a reliable transit country and the advantage over Ukraine it gained in the ‘gas wars’ – as an outsider, of course. Stable political relations with Russia guaranteed EU predictable relations with Minsk. It seems to be no longer the case.

There were quarrels over Belarusian milk, sugar, meat, agricultural machinery exports and gas and beer imports from Russia. This time it’s diesel oil. It used to concern only bilateral relations but this time it affects Latvia as well.

The experts notice that the transit of Russian diesel oil was stopped after a senior Russian official left Minsk. What have they failed to agree on? Nobody says.

Then Belarusian MFA warned in a statement that entry into Abkhazia and South Ossetia is only allowed from the Georgian municipalities, entry from all other areas without a special permit of the Georgian authority is penalised under the Criminal Code of Georgia. Belarus hasn’t recognized those two countries, but the statement is no accident. As a result Georgia hailed the statement… and a reported illness prevented Moscow governor Luzhkov to come to Belarus to open the long-awaited House of Moscow.

On July 28 Belarus FM will come to Brussels for a Troika meeting. But it’s unlikely that Minsk is complicating its relations with Russia in order to thaw them with Brussels. It is the same as cutting off your nose to spite your face.

But the tensions with Russia are getting dangerous.

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Bitter Friends

The whole week-end is the first ever Milk Festival in Minsk. A logical choice after a week of cold milk war between Belarus and Russia.

Any ministry could be used as a foreign policy instrument in any country. This time Russia’s federal consumer rights watchdog Rospotrebnadzor banned the import of some 1.000 titles of Belarusian dairy products. Almost all Belarusian dairy products have been placed onto ban list as they don’t have the necessary permits in accordance with Russia’s food standards in effect since December 2008. Now just three Belarusian companies are allowed to deliver dairy products to Russia.

Right, the necessary permits. But the scandal is bigger and started as Russian Finance Minister Kudrin questioned Belarus` worthiness of getting a $500-million loan from Russia.

In return Mr. Lukashenka questioned his mental health. Then he invited Russian journalists to express his point of view on the situation, but only four dared to come. They could publish some fascinating stuff: for e.g., that Moscow blackmails Belarus with this loan over Abkhazia and South Ossetia recognition.  And that Russian oligarchs wanted to buy Belarusian dairy factories for a mere song.

During the same days Belarus reaches an agreement with IMF to increase its loan by $1 billion. It looked like: hello, Moscow, you are no fun any more, the West has better loan conditions anyway!

But no comments followed from either side.

Meanwhile Belarusian exporters process their stocks of milk into butter and freeze it. And organise festivals in hope that the capitals will solve all the problems and open up the Milky Way to the huge neighbouring market.

And everyone understands that economically we can’t do without Russia. Russia knows that it needs Belarus. We are doomed to be together, as Lukashenka once put it.

Oh, Lord, life would be so much easier if people could take it easier and be more diplomatic and polite…

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Russian Bread Crumbs

It’s very likely that from now on the movement of Belarusian authorities towards Brussels’ requirements will be even more visible. The Belarusian president was furious about yesterdays’ remarks of the Russian finance minister Alexei Kudrin who publicly cast doubt on the Belarus’ ability to default on its debt by the end of the year due to the dire state of economy. He warned it was too early to say whether Belarus would receive any further loans from Moscow.

“The future of Belarus can no longer depend on Russia… The days of Minsk bowing down to Moscow are over… Belarus needs to look for its happiness on a different part of the planet.”– announced Lukashenka. And underlined that he was saying this in public consciously.

The escapade came a day after his talks with the Russian Prime Minister Vladimir Putin in Minsk. Putin who travelled together with Kudrin played a “good cop” and expressed hope that Belarusian-Russian trade kept increasing in the period of the global crisis.

Lukashenka in contrast expressed outrage that Kudrin’s comments had been agreed with Putin and commented that the Russian minister had also fully consolidated with the Belarusian opposition which lived on Western grants and tried to teach the authorities to work. (That’s probably the worst you can say about someone: he is with the opposition!)

The stakes according to Lukashenka are high: “If we don’t stand tall… we are going to be running in a sweat to the right and the left in the hope that someone is going to throw us a piece of bread from the table.”

He mentioned no alternative to Russia. But we have two strong neighbours. And if we don’t bow down to Russia, the movement towards EU could become more visible. The problem is that this visibility is nothing new. So there’s little hope this movement is going to be more effective this time.

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