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Opinion: Will Putin allow Belarus to play a balancing act?
28 January 2020

With Pompeo due in Minsk this week, and the Belarus presidential elections on the horizon, Moscow and Minsk have some difficult decisions to take. Benyamin Poghosyan discusses the state of Russia-Belarus relations in this op-ed for commonspace.eu

Relations between Russia and Belarus are one of the hotly debated issues among pundits dealing with the politics of the post-Soviet space. Till recently bilateral relations were focused on economic cooperation, and more particularly, on the price of Russian gas and oil delivered to Belarus. In 2019 the accent   shifted towards the practical implementation of the 1999 Union State treaty. The looming power transition in Russia in 2024, when President Putin fourth Presidential term expires, has inflamed the debate on the possibility of President Putin becoming the President of the Union state after 2024. This scenario was discussed as a possible way for President Putin to extend his power beyond 2024. Meanwhile, as elsewhere in the world,   in Belarus - Russia relations geopolitics and geo-economics are often intertwined.

In recent years Russia has provided oil to Belarus with zero export tariffs. This situation allows Belarus to buy cheap Russian oil, refine it in its two main refineries and then sell the oil products to Europe with market prices thus securing billions of USD profits. Meanwhile, in 2014 the Russian State Duma adopted a special law on the so called 'Tax maneuver" which envisaged the decrease of oil export tariffs from 30 to 0 percent in the period of 2019-2024, and simultaneously raising the oil extraction tax for the same amount. These changes automatically deprive Belarus of the possibility to receive cheap Russian oil. Starting with the 2015 launch of the Eurasian Economic Union Belarus has demanded that Russia sell gas and oil to Belarus at Russian domestic prices, a demand vehemently rejected by Russia. Moscow made an alternative suggestion: if Belarus wants oil and gas with Russian domestic price, it should accelerate the establishment of the Union state.

The Russian and Belarusian Presidents reached a tentative agreement on oil and gas delivery issues in April 2017. The new agreement stipulated that Belarus would receive 16 million tons of oil annually to refine for the needs of its internal market, while excess petrochemicals could be exported. Like previously, the agreement stipulated that Belarus could keep up to $1.5 billion of export fees in its budget. As for the price of gas, the agreement fixed a 129 USD price for 1000 cubic meters of Russian gas in 2018 (from 143.54 USD in the second half of the 2017) and 127 USD for 2019.  In comparison, another Russian ally and CSTO and Eurasian Economic Union member, Armenia, was receiving Russian gas for the price of 150 USD per 1000 cubic meters in 2017-2018, and 165 USD in 2019. However, due to the 'Tax maneuver" amendments Belarus lost 300 million USD in 2019.

Russia - Belarus economic relations are not confined only to oil and gas. Another joint project is the construction of the Astravets nuclear power plant with two VVER-1200 reactors by Rosatom, at a location very close to the Lithuanian border and less than 50 km. from Vilnius. Despite Lithuanian concerns that the plant does not correspondent to international safety standards and poses a threat to Lithuanian national security the first unit will be operational in mid 2020.

Meanwhile, since the 2014 Ukraine crisis Russia has started to put more attention on bilateral security cooperation. Belarus is a member of the CSTO and has a close defense partnership with Russia.  This was emphasized during the large scale,   week long, joint "West 2017" military drills launched in Belarus in September 2017. However, Belarus rejected a Russian suggestion to establish a Russian military air base in Belarus back in 2015, thus hinting that despite close defense and security partnership, Minsk was cautious not to be fully driven into the Russia - West geostrategic competition.

The culmination of disagreements in bilateral relations came in 2019. Russia offered 31 road maps for furthering the integration process and implementing the 1999 Union treaty. The Road Maps were discussed by the Prime Ministers and then submitted to the Presidents at the beginning of December 2019. However, two meetings between Russian and Belarusian Presidents held on December 7 and 20, 2019 in Sochi and Saint Petersburg have not resulted in a breakthrough. Even before meeting with his Russian counterpart, President Lukashenko stated that Belarus would not sign integration roadmaps with Russia if they run counter to its constitution or threaten its sovereignty.

As a result of the deadlock no long term agreements were signed regarding the price of Russian oil and gas for Belarus in 2020. On December 31, 2019 Russian Gazprom signed an agreement with Belarus fixing the gas price for Belarus only for January - February 2020, simultaneously agreeing that the volumes of the Russian gas delivery as well as the transit through Belarus for 2020 will be kept at the level of 2019. Meanwhile, Russia has significantly reduced oil deliveries to Belarus starting January 2020.

Belarus is in frantic quest to find alternatives sources for oil. Minsk managed to buy 80000 tones of oil from Norway, and according to Belarusian President, Minsk is looking for other sources including Kazakhstan, Azerbaijan, Saudi Arabia and the US. However, the key for Belarus is not the quantity but the price. Buying oil by market prices will cost Belarus billions of USD lost profits. Meanwhile, President Lukashenko publicly stated that the so called "Tax maneuver" was implemented by Russia only to harm Belarus and emphasized that, despite Russian pressure, he was not going to give up on Belarusian sovereignty.

Simultaneously, Belarus is seeking to develop relations with the West and China seeking to counterbalance Russian influence. In September 2019 the US and Belarus decided to restore full reciprocal diplomatic missions more than 10 years after ambassadors in Minsk and Washington were recalled over the deterioration of human rights in Belarus. Secretary of State Mike Pompeo will visit Minsk on February 1, 2020 to underscore the US commitment to a sovereign, independent and stable Belarus. In December 2019 Belarus reached an agreement with China to receive a 500 million USD loan.

Meanwhile, Belarus is preparing for the Presidential elections in August 2020. In this context, two main scenarios for the development of the Russia - Belarus relations are possible. The first scenario stipulates the continuation of the current situation, with Russia conditioning the cheap oil and gas delivery on the signature of the integration road maps. In case of rejection Russia will raise the price of these energy commodities harming the Belarusian economy, but will not intervene in domestic politics and will not seek to thwart Belarusian efforts to develop relations with the EU, the US and China. In this scenario, Belarus will continue its membership in the CSTO and the Eurasian Economic Union, but will balance its relations with Russia through cultivating partnerships with other geopolitical players.

The second scenario envisages tough Russian actions to prevent Belarus from developing deeper ties with the EU and the West and push Minsk towards a quick realization of the 1999 Union treaty through the approval of the integration road maps. In this case Russia will make efforts to create a serious alternative for Lukashenko in the upcoming Presidential elections, and seek to trigger a "Colour revolution type" post elections developments in Belarus. The maximum gain for Russia will be the election of a more Russia friendly President in Belarus, while the minimum achievement will be a significantly weakened Belarus more susceptible to the Russian pressure.       

source: Benyamin Poghosyan is the Founder and Chairman of the Center for Political and Economic Strategic Studies in Yerevan.

photo: Russian President Putin and Belarus President Lukashenko at a recent meeting (archive picture/TASS)

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