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Lukashenko as disintegrator of Eurasian space

“No one is forced to remain in EAEU,” Prime Minister of Russia Dmitry Medvedev told his Belarusian counterpart after the latter complained of problems in the bilateral relations. Perhaps, it was the first time that Russia responds to Belarus’ blackmail in such a manner. The last word rests upon Vladimir Putin, of course, but prime minister’s statement was a serious signal that the patience has come to an end.

What could lead Russia to public finger-pointing? Why did that happen just now? To better imagine what is happening behind the scenes in the political field, let’s recall where the prime ministers exchanged their caustic remarks. It is the Bishkek meeting of the Intergovernmental Council of the Eurasian Economic Union (EAEU). “Why the difference (of gas price inside Russia and for Belarus – the author’s note) is higher threefold after the establishment of the EAEU, meantime it was to decrease gradually,” Belarusian Prime Minister Andrey Kobyakov complained. In fact, Belarus still enjoys preferential terms of gas supply i.e. $150 per 1,000 cubic meters. Inside Russia, gas price is about $60-$70 per 1,000 cubic meters. After all, Russia spends money on exploration of gas fields, recovery and transportation. By the way, it already sells gas to Poland for $180 per 1,000 cubic meters.

Belarus is cunning. That is, in the beginning of 2014, when the exchange rate of US dollar was 32/33 rubles per 1 dollar, gas cost $165 or 5,5 thousand rubles for Belarus. Now, when the exchange rate is about 60 rubles per dollar, it is about $140 or almost 8.5 thousand rubles. Even in such case, there is no threefold growth. Meantime, Minsk insists that gas for Belarus must be calculated in rubles and it must be below $90. Why should Russia and the Russian budget face exchange rate problems? Although a single market is planned, it does not exempt Minsk of its previous contractual liabilities. The current debt of Belarus to Gazprom has reached $600 million.

Russia’s economic assistance to Belarus goes beyond de-facto subsidized gas price. Russia had supplied about 20 million tons of oil annually to Belarus with several years, since 2011. Those supplies to oil refineries of Belarus filled the Belarusian budget with currency. Such assistance cost Russia over $22 billion. It was not the only preference Belarus enjoyed and still enjoys. The key sales market of Belarus’ agricultural sector, mainly meat and dairy products, is Russia. There were also other, though less decent stories, such as fraudulent schemes of re-export of sanctioned foodstuffs, and many others.

The ongoing discrepancies with Belarus that like before have financial reasons, are, in fact, deeper, as they go beyond bilateral relations and touch serious geopolitical processes. Belarus is actually disintegrating the Eurasian space now. Alexander Lukashenko who once “invented” such integration project and Union State now opposes rapprochement of economies of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan within EAEU. Last December, he undertook an open demarche and did not travel to Saint Petersburg to sign the EAEU Customs Code, though presidents of four countries waited for him there. Such an open act of defiance could not go unnoticed. This time, the big political intriguer has miscalculated Russia.

What makes once integrator oppose integration? In fact, when suggesting Boris Yeltsin the project of Union States at the time, Lukashenko inherently claimed exclusive and permanent preferences from Russia. In the Soviet years, Belarus was the assembly shop of the USSR i.e. it issued final products assembling components made by allied suppliers throughout the Soviet Union. Due to Lukashenko’s economic policy, the economy of present-day Belarus still has a status of Russia’s satellite. Lukashenko managed to keep rather high level of social guarantees for his citizens thanks to Russia’s cheap energy resources. Meantime, he provided no serious support to Russia’s initiative on the international arena, at the same time insisting on such unreasonable payment for its “friendship” with Russia. Minsk has traded its special relations with Russia with the West until recently. However, Belarus proved no longer unique for Russia, after the global economic crisis and the West’s sanctions war against Russia, when Armenia and Kyrgyzstan joined EAEU and most of the projects that were implemented within the Union State of Russia and Belarus have extended over entire EAEU. Belarus has vanished with the Eurasian integration.

To keep its special status, Belarus will have to either wait for another chance to bite Moscow or return to forgotten projects of integration within the Union State. To recall, it is establishment of single political, economic, military, customs, currency, legal, humanitarian and cultural space. It is not just economic integration, but a common labor market, goods, services and capitals, education, medical service and pension provision for the citizens in the territory of the Union State, as well as single foreign and migration policies, defense, currency and judiciary. The Union State in its final form is a kind of confederation of Russia and Belarus. And it is evident who will be the leader in that confederation.

I think, the problem is not Belarus’ creditworthiness. At least, not only it. It is not about tactics, but strategy. They could ask money from Russia again or borrow it from the Eurasian Development Bank. However, the president of Belarus has no arguments to trade with Russia any longer. The crisis of the Belarusian economic model is evident. Belarus has no choice but confederation. Lukashenko went to the limit by trying to undermine EAEU. In his usual dispute with Russia, he no longer relies on Europe, as the latter has more serious problems than Belarus. This time Lukashenko hopes to find allies among leaders of the other EAEU countries. Therefore, he demonstratively calls the current form of the Eurasian integration project unfavorable for all the member countries, except Russia. He tries to press the EAEU countries with his rich experience of integration projects with Russia. I think, it is a slap in the face. It high time for Russia to stop offering its cheeks and start learning lessons.

…Yet, maybe Lukashenko is just bargaining more comfortable terms for further existence, for instance, the right to presidency-for-life.

Igor Shatrov, deputy head of the National Institute of Modern Ideology Development, for EADaily

Permalink: eadaily.com/en/news/2017/03/08/lukashenko-as-disintegrator-of-eurasian-space
Published on March 8th, 2017 08:10 PM
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