Lukashenko’s Arab tour – waste of time and budget money

The Belarusian leader is facing more and more problems: the economy is stagnating, the budget is empty, with foreign donors not keeping their promises to help with money. Things are so bad that Alexander Lukashenko has asked the European Commission to give him at least $500mn, so, he can repay Gazprom’s debt by winter. The Belarussian prime minister claims that all problems with Russia have been solved but the debt is still there. In this light, Lukashenko’s recent tour of the Middle East was all but a surprise. The Belarusian leader has made one more attempt to get money from his Arab friends.

The official goal of Lukashenko’s visits to the United Arab Emirates and Qatar was to stimulate business activities and to enlarge contacts but the true goal was to get money and fuel. In Qatar, the Belarusian leader signed memoranda on cooperation in healthcare, science and banking and discussed joint projects in trade, woodworking and food supplies. None of these documents has any value. Lots of similar papers have been signed since 2001 but the trade turnover between Belarus and Qatar has never been higher than $20mn. And the only serious investment made by the Qataris in Belarus so far was the construction of a hotel and sports complex in Minsk.

In the UAE, the results were no better: “specific directions for potential investments,” “joint ventures in Belarus,” “cooperation in the high-tech sector, logistics and tourism.” But the aggregate sum of these “potential” projects is just tens of millions of US dollars. The only achievement of the visit was the contract on deliveries of Belarusian offroad vehicles to the UAE. Here too things are moving quite slowly: over the last seven years, the Minsk Wheel Tractor Plant has exported to the UAE just a couple of dozens of vehicles. In Jan-June 2016, Belarusian exports to the UAE made up just $11.75mn, with the Arabs having invested no more than $29mn in the Belarusian economy and banking last year. This is a drop in the ocean compared to Russia’s investments.

And even though Lukashenko has achieved certain results they are far from what he planned. Qatar and the UAE are keen to diversify their economics and to make them less dependent on fuel prices but Belarus with its weak economy and unfavorable investment climate is not on the list of their potential partners. Lukashenko was well aware of this, so, the key goal of his tour was to show the Russians that he would always be able to find an alternative to them.

This is why before the tour Lukashenko hinted that he is strongly committed to diversify his country’s fuel imports. He said that Iran was seriously interested in the Belarusian oil sector and that Azerbaijan had sent a tanker of oil for the Mozyr Oil Refinery. History has shown that none of Lukashenko’s alternative oil or gas projects have been realized so far – mostly because of their dubious profitability. Until now Lukashenko has been able to sponsor his political games but today he has no more resources for this. And this is why they in the Kremlin are showing to reaction.

The ultimate goal of Lukashenko’s tour – to borrow money from Arab sheikhs – has not been achieved. Neither Qatar nor the UAE is going to lend him money. And there is nothing he can offer in exchange – even though his oil refineries and Belaruskali are still profitable, they are the key sponsors of his budget. The rest - except, perhaps, the defense industry - can hardly attract anybody in the Middle East. As far as defense is concerned, the only time Belarus supplied arms to the UAE was the delivery of one BTR-80 armored vehicle in 2001, with the only purchase by Qatar being reportedly arms for Libyan Islamists and ISIL fighters.

Some experts suggest that Qatar and its neighbors can use (or are already using) Belarus as a “scrapheap” – a place where they can launder their money cheap. In this light, Lukashenko’s tour makes sense. This friendship is giving his country no profits but just proves that the Belarusians remain servants to political rulers acting in their personal interests only.