- Published on Wednesday, 12 April 2017 10:14
- Category: Articles and Commentary
- Written by Paul Hansbury
On April 3rd Russia and Belarus provisionally announced the resolution of their latest long-running energy dispute, signalling a reconciliation between neighbours who had fallen out over a range of issues during the past three years. Key details remain to be worked out, but the settlement ostensibly reached on Monday more or less freezes the status quo in the bilateral relationship by pledging continued subsidies for Belarus. This is an outcome Belarus longed for and Russia longed to change.
Russia has viewed recent development in Belarus, especially improvements in its relations with the West, through the prism of Ukraine. The protests that spread across Belarus from mid-February reaffirmed the Kremlin’s anxieties, although Russian officials kept conspicuously quiet about the unrest. While the protests were primarily a domestic issue, Russian policymakers – recalling Kyiv’s protests – connected them to Belarus’s alignment to Moscow. Behind the scenes efforts were being made by Russia to bring its wayward ally back into line.
Russia’s reasons for fighting to keep Belarus in its orbit are unambiguous. Belarus is strategically important territory for Russia, particularly so during its ongoing face-off with NATO. An allied Belarus strengthens Russia’s hand in Central and Eastern Europe, preventing the formation of a Baltic-to-Black Sea security belt – perceived in Moscow as anti-Russian. It serves as an important energy transit state and provides the greater part of the land-link to the Kaliningrad exclave where Russia’s Baltic Fleet is based. Belarus also hosts two Russian military facilities and Russia would like to add a third, although Belarus has stood firm against plans to establish an air base near Bobruisk since late 2015. In any case, the territory comprises a crucial component of Russian air defence capabilities.
It is also significant that many Russians do not consider Belarus a foreign country. Belarus’s strongman president Alexander Lukashenka – who came to power in a 1994 contest where both of the main candidates sought to strengthen ties to Russia – reciprocates by publicly calling Belarus and Russia “one people”. Until recently neither side controlled their shared border and no one could have foreseen the deterioration in the two sides’ relationship.
At the same time, Russians view the relationship as a parasitic one. Belarus’s economic and political model survives through Russian oil and gas rents and subsidies. The arrangement never much pleased Vladimir Putin who first announced the intention to shift hydrocarbon sales to commercial energy prices in 2004. Recently, as oil prices slumped and Russia’s economy languished, the arrangement came under increasing strain. In this context Belarus’s spiralling gas debt proved a source of acute frustration for Russia.
It is somewhat ironic that Russia’s unease with Belarus was compounded by street protests about a new law “on the prevention of social parasitism” – otherwise known as Decree No.3. The Belarusian authorities hoped to raise 85 million dollars, much-needed as energy rents diminished, by taxing people who have been out of work and unregistered for more than six months. The “anti-parasite” protests culminated in hundreds of arrests and beatings of protesters by OMON (special police) units on March 25th – technically the annual Freedom Day march, though it took on extra significance in light of the protests against Decree No.3. Although the size of the protests remained modest, gathering no more than a couple of thousand demonstrators, their persistence (the first was February 17th) and the spread to all the main regional centres has been unprecedented.
Officials in Moscow have been following closely. As Andrey Sushentsov, Program Director at the Valdai Club and head of the Moscow-based Foreign Policy Advisory Group, said on March 25th: “The Belarus government’s clash with protesters with a nationalist agenda is being compared in Moscow with the Maidan events of 2014 in Ukraine.” Russia blames Belarus’s recent efforts to decrease dependency on Russia and repair its relations with the West. Andrey Skriba, a research fellow at Moscow’s Higher School of Economics, explains that for many conservative Russians “all the problems in Russia and neighbouring countries can be reduced to the activities of Western funds, financing non-profit organisations in the post-Soviet space”.
Increasingly dissatisfied by its neighbour’s policies, Russia wanted to see signs of instability stamped out and its ally fall into line. The protests only exacerbated its reluctance to persist with the economic model. Russia’s broader wish list is not too difficult to guess. Lukashenka’s latest flirtation with the West is deemed to have gone too far, Belarus is expected to recognise the annexation of Crimea, accept the “economisation” of oil and gas prices, and ultimately agree to Russia’s planned air base. Russia has studied its options should it perceive the situation in Belarus to be unstable or unfriendly. The possibility of military intervention exists, although for the moment Russia expects Lukashenka to restore order. Commenting on March 25th, Sushentsov remarked: “If Moscow’s analysis is correct, Belarus’s government will maintain the initiative and clashes will not lead to a major destabilisation.”
The causes of Russia’s perceived need to bring Belarus back into line can be guessed at, even if the deterioration in the relationship was as unexpected as it was rapid. To Russia’s chagrin, Belarus adopted a deliberately ambiguous position during the Ukraine war. By hosting peace talks it has managed to present itself as neutral, even if its UN voting record and Lukashenka’s public statements are more closely aligned to Moscow than Kyiv – a point wilfully overlooked by many Western journalists and diplomats.
The two states have been wrangling over the gas debt and energy supply prices for months. The debt had grown to more than 700 million dollars according to the Russian side. Belarus argued that Russia should supply gas at 73 dollars per thousand cubic metres, while Russia was asking for 132 dollars. The price has a significant effect on both states’ budgets, though for Lukashenka continued subsidies are essential to the maintenance of the domestic political system. It was during meetings in the end of March that the breakthrough came and a meeting between the two heads of state swiftly arranged to announce a settlement. While the sides appear to have agreed terms for repayment of the debt, an agreed price remains contingent on those repayments.
The two allies also fell out regarding the Eurasian Economic Union where Belarus accuses Russia of protectionism. Lukashenka pointedly skipped a St. Petersburg summit in December 2016 and has not yet signed the Union’s Customs Code. He also missed a summit of the Collective Security Treaty Organisation held the same day. On its part, Russia was riled by Belarus’s re-export to Russia of goods imported from the European Union – products banned by Russia as part of its counter-sanctions introduced as a reprisal to EU sanctions on Russia.
Time for sticks
Russia started putting the screws on Belarus. In mid-2016 it began cutting the supply of oil to Belarus for refining – ordinarily Belarus’s largest source of export revenue – and made additional reductions in January of this year, when supplies were reduced from 4.5 to 4 million tonnes, and were explicitly linked to Belarus’s gas debt. This further debilitated the ailing economy, which the IMF predicts will contract for the third year in succession. Russia threatened import bans on a range of Belarusian food products.
In a further signal of dissatisfaction with Western-leaning aspects of Belarus’s foreign policy, Russia took the controversial measure of re-establishing controls along the previously open Russia-Belarus border. Then, in early March Russia’s Prime Minister, Dmitry Medvedev, stepped up rhetoric around the gas dispute. “If some countries participating in the Eurasian Economic Union had not joined it, they would have to buy gas at European prices.” To Belarusian ears this was blackmail. Russia knows Belarus’s options are limited. As Skriba notes: “Belarus is too deeply integrated into the Russian economy and has too illiberal a model to make any quick reorientation to the West.”
Yauheni Preiherman, director of the Minsk-based Liberal Club, claims that Russian banks operating in Belarus are being used to exert pressure on the financial sector. He says: “Belarusian branches of major Russian banks are not lowering interest rates in line with the National Bank of Belarus’s decision to loosen monetary policy, thereby undermining the official Belarusian position.” He has written that Russia threatened to pull funding from Belarusian projects.
At first Belarus took a softer stance on the protests, granting rare approval for an action on March 15th. This was compatible with the thaw in its relations with the European Union, which could have been jeopardised by repression of the kind seen during 2010 electoral protests. Freedom Day rallies in Brest and Hrodna were also sanctioned, although not the Minsk march. However, over the weekend of March 10th-12th, dozens of arrests signalled a changed approach. Then, in what many consider a pre-emptive effort to justify the crackdown on March 25th, the Belarusian authorities made a series of sensational claims. On March 20th, Belarusian state TV played footage of a vehicle carrying explosives allegedly speeding through a border checkpoint from Ukraine. On March 21st Lukashenka claimed the KGB had uncovered a plot to overthrow him and arrested tens of people allegedly trained in camps in Belarus and Ukraine.
There is no evidence to suggest Russia directly influenced the decision to crackdown on protests, but some in Belarus think the Russians were having words in Lukashenka’s ear. The use of force to disperse protesters sent a welcome signal to Moscow officials wary of another Maidan. Andrey Porotnikov, the founder of the Belarus Security Blog, agrees that the repression likely pleases Moscow. “They are very pleased, but they still won’t give Belarus any money,” he commented on March 26th. And without alternative sources of revenue, even if the current wave of protests subsides, new grievances can be expected among ordinary Belarusians.
It is too early to tell whether the tougher crackdown on March 25th will enervate or invigorate anger towards the authorities. The protests appeared to be gaining momentum and the opposition has a rare opportunity to marshal a broader anti-government movement. Tatsiana Karatkevich, who stood against Lukashenka in the 2015 presidential elections and is a member of the oppositional “Tell the Truth” campaign, concedes that the mood on the streets is subdued and says “Tell the Truth” “needs to help transform this mood and the protests into other forms of political expression” so as to be heard.
Anna Kanopatskaya, one of only two deputies in the Belarusian parliament who is not a Lukashenka loyalist, comments: “My position on Decree No.3 remains unchanged. The decree must be repealed entirely.” Her party, the United Civic Party, plans to continue organising marches in May against the new tax in coordination with other campaign movements.
Deals are made behind closed doors
The precise details of the deal struck behind closed doors will probably only be drip-fed to us over the coming weeks. Russia’s Deputy Prime Minister Arkady Dvorkovich says that oil supplies to Belarus will be resumed as early as mid-April. Continued Russian gas subsidies to Belarus are promised for 2018 and 2019. These concessions outweigh Belarus’s recognition of the debt, which it had refused to do until now. Nonetheless Russia appears satisfied, which suggests Belarus has conceded more than just liability for a rapidly escalating debt.
Russia wields tremendous influence in Belarus. Unlike Ukraine, it would be a mistake to assume that the opposition is pro-Western or anti-Russian. Even if they were inclined to be so, there are other factors that militate against this. Survey data collected by the Belarusian Analytical Workroom in December found that 65 per cent of Belarusians wanted to be in a union with Russia, while only 19 per cent preferred alignment with the EU. Thus, if Russia wanted to take further action against Belarus its options are wide-ranging. Over recent months analysts at the Minsk-based Centre for Strategic and Foreign Policy Studies repeatedly claimed Russia could use forthcoming Zapad-2017 military exercises to occupy Belarus. Others have discussed the possibility Russia might overthrow Lukashenka and replace him with a more pliant leader, although at present there is no obvious pro-Russia placeholder.
Wild speculations do not impress others in Belarus. Porotnikov thinks: “At present there are no signs Russia is preparing to use force against Belarus. I consider that discussions about Russian aggression plays into the hands of the regime, allowing it to explain internal repression by the threat of external provocation.” For others speculations as well as the protests are part of Lukashenka’s gamesmanship. By portraying Belarus as a victim of Russian aggression he seeks succour from the West. Or perhaps, seeking succour from Russia, he deliberately threatens it with a repeat of the Ukraine scenario.
At Monday’s press conference Vladimir Putin declared that Russia and Belarus “don’t have differences remaining”. Perhaps, but neither the agreement ostensibly reached on Monday nor the anti-parasitism protests have resolved the problems inherent in Belarus’s economic dependency. The Russia-Belarus bilateral relationship is based on an unsustainable model and it is difficult not to see troubles ahead. Moreover, a revised gas pricing structure remains unconfirmed and will be conditional on Belarus’s debt repayments – which, given the precarious state of Belarusian finances, should not be taken for granted. As Sushentsov remarks, Moscow viewed the recent protests with concern, “seeing the potential for destabilisation of an allied government.” He did not specify who the agents of such destabilisation might be. The ambiguity resonates.
Paul Hansbury has degrees from Birkbeck, University of London, and St Antony's College, University of Oxford. His research focuses on Belarus's international relations.