Belarus Trapped Into Eurasian Integration
Russian oil and gas pipelines
The Ambassadors of Poland, Lithuania and Sweden have returned to Minsk and their colleagues are on the way to the Belarusian capital. It seems that EU-Belarus relations have broken the deadlock, but they remain difficult and the EU has few carrots to offer its restive authoritarian neighbour. Unlike countries like Moldova and Armenia, Belarus is increasingly integrating into the Eurasian Economic Union without any serious interest in European integration.
The reason for this is oil and its financial dependence on Russia. If the EU wants to establish democracy in Belarus, it should offer a comprehensive package of assistance in reforms. But even if Belarus decides to take European path, it will take at least 3-4 years to reach the same level of relations as exists with Georgia or Ukraine. And there are plenty of obstacles: from WTO membership to an obligation to secure permission from the yet to be established Eurasian Commission.
Changed Environment
The planned return of all EU ambassadors to Belarus marks the end of the worst EU-Belarus political conflict since it regained its independence. Swedish Foreign Minister Carl Bildt says that the EU is ready to restore the status-quo in its relations with Belarus that existed before the notorious presidential election in December 2010.
return to the year 2010 is no longer possible because Belarus increasingly integrating into the new Eurasian Economic Union Read more
Unfortunately such a return to the year 2010 is no longer possible because Belarus is increasingly integrating into the new Eurasian Economic Union advanced by Russian president-elect Vladimir Putin. He offered significant discounted oil and gas supplies to Belarus which helped the country survive the economic crisis that began in April-May 2011. Recently Standard & Poor's has even revised the outlook on Belarus from "negative" to "stable" despite pessimistic forecasts of local analysts.
Russia managed to obtain the main Belarusian gas pipeline tranpsortation system (Beltransgaz) in return for assistance in hard times. Moreover, approximately 70% of all enterprises in Belarus are still state-owned. The country plans to privatise 133 of them with the total amount of $2.5bn this year. And guess who will own most of them soon? That's right — their big neighbour to the east.
Locked In the Eurasian Union
At the same time the majority of Eastern Partnership countries, in particular Moldova, Georgia, Armenia and Ukraine, conduct negotiations with the EU under the Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA or Free Trade Agreement).
The Free Trade Agreement is key to understanding why Ukraine does not want to participate fully in the creation of the Customs Union with Russia, Belarus and Kazakhstan. This type of agreement implies progressive liberalisation of bilateral trade through lifting tariff and non-tariff barriers. It also extends to legislative and administrative regulation of trade. As a result these countries should approximate to the EU standards as closely as possible, as if they were Norway or Switzerland.
The Free Trade Agreement is the main "carrot" of the Eastern Partnership as it opens the EU Single Market for Eastern Partnership countries. Their advantages are obvious, because the EU GDP by purchasing power parity is almost seven times greater than the GDP of the Russia-led Customs Union.
And economic integration is more beneficial with prosperous countries, not with oil-rich backward Russia and Kazakhstan which want to protect themselves from foreign competition. If Ukraine is a member of the Eurasian Economic Union, it would have to pay high levels of compensation for its trade partners outside the Union as the country has lower import tariffs under its WTO obligations.
a member of the Eurasian Economic Union does not have a right to conduct separate trade negotiations with any countries Read more
What is more important, a member of the Eurasian Economic Union does not have a right to conduct separate trade negotiations with any countries. Instead, it should ask for permission of the supranational Eurasian Economic Commission and take into account economic interests of all member states. It means that in practice Belarus can not launch negotiations with the EU on Free Trade Agreement without Russian consent even if all political prisoners are free.
Why Belarus Chose Eurasian Integration?
petrochemicals amount to more than 65% of Belarusian export to the EU countries Read more
As many other Eastern Partnership countries, Belarus has at least 25% EU share in its trade balance. As opposed to them, petrochemicals amount to more than 65% of Belarusian export to the EU countries. Only Azerbaijan surpasses Belarus with its 99.5% share of oil and gas in export to the EU. Whether it is a coincidence or not, both countries are authoritarian and are not WTO members.
However, while Azerbaijan has its own oil, Belarus mostly relies on Russian oil producers. In January 2012 its export to the EU increased fourfold from $439m to $1.74bn as compared with the previous year due to favourable conditions of oil supplies from Russia.
EU-Belarus relations on a political level may make Russia angry and thus put an end to its oil paradise Read more
But the significant improvement in EU-Belarus relations on a political level may make Russia angry and thus put an end to its oil paradise. Benefits from reduced import tariffs in trade with the EU will not cover losses from a decrease in the amount of oil refined in Belarus. The reason for Eurasian integration is very simple: Belarus is badly dependent on Russia.
Belarusian Authorities Live For The Moment
Another reason for choosing the Eurasian integration is the unwillingness to undertake any significant reforms. Belarusian authorities would like to maintain the existing political and economic status quo for as long as they can. Most of the Eastern Partnership countries on the contrary intend to improve their administrative and legislative systems according to European standards in order to attract foreign investments.
It clearly illustrates the dilemma that the Belarusian ruler faced in 2010. On the one hand, he could follow the path of modernization and liberalisation. It was a sound strategy, but it demanded large sums of money and could have caused social and political instability. On the other hand, he could restore deteriorating relations with the Russians and reinstate their generous support in exchange for promises of future concessions.
Finally, Lukashenka prefers short-term benefits over long-term advantages and is unwilling to invest money in the democratic future of Belarus.
To Support Reforms In Belarus
Belarusian authorities are forced to rely on Russian support to survive, but Russia may soon get control over all strategic assets in the country for cheap. Thus participation in the Eurasian Union poses a threat to Belarusian sovereignty. But it also has at least one positive consequence – Belarus will be forced to become a WTO member and this will consequently encourage authorities to make economic reforms.
Russia does not guarantee that it will keep its oil and gas discounts for a very long time. Sooner or later Belarusian authorities will face the prospect of the collapse of their economic model. At that moment the EU should be ready to offer Belarus a comprehensive package of financial and technical assistance in reforms and enter into a dialogue with authorities and businessmen on the future development of the country.
The Echo of Chernobyl
26 April is a very sad day in Belarusian history. On 26 April 1986 a disastrous accident took place at a nuclear power plant in Chernobyl, just across the border in Ukraine. It became one of the most horrible man-made disasters ever. Belarus suffered from the radioactive fallout more than any other country.
Since the disintegration of the Soviet Union Belarus has had to handle the whole array of social, economic and demographic repercussions of the disaster. The lack of financial resources makes it a difficult task. As a result, the Belarusian authorities try to minimise the scale of the problem.
As Germany is moving away from the use of nuclear power, Belarus started building its own nuclear power plant and considers adding one more in the future.
Belarus Suffered the Most
Over 50 million curies of radioactive material were released as a result of the accident. Its fallout encompassed a population of 17 million people, including 2,5 million children under the age of five. Even though the nuclear power plant was in Ukraine, the winds brought most of the radioactive fallout to Belarus. It quickly contaminated 23% of the country’s territory.
Thousands of inhabitants of the polluted area had to leave. Thousands of rescuers who worked at the disaster’s site suffered from immediate radiation sickness. Hundreds of thousands of people still suffer from the aftereffects of the accident.
Smaller areas in southern and south-eastern parts of the country became completely unsuitable for any human activity and still pose a threat of radiation spread. To monitor and research the situation there the authorities created Polesie State Radiation and Ecological Reserve.
According to international scientists, the increased cancer and infant mortality rates in Belarus suggest that the deadly effects of the Chernobyl disaster are still lingering.
Struggle with the Repercussions
After Belarus gained independence in 1991 it immediately faced the burden of financing numerous rehabilitation programmes. Some estimates said that every fourth rouble of the state budget had to be spent on those programmes. It became a real challenge for the newly independent republic and its weak economy.
One of the core questions that the Belarusians face is what to do with the contaminated territories. According to independent researchers, the polluted lands will remain highly radioactive for hundreds of years. Therefore, they cannot be turned back into agricultural and industrial use.
However, according to the Belarusian Academy of Sciences, the polluted territory has decreased 1,6-fold since 1986. In their opinion, now 14,5% of the Belarusian land remains contaminated and about 1,2 million inhabitants reside there. They think that the level of contamination is not critical and, therefore, recommend to intensify economic activities on these lands.
The government follows the recommendation of the Academy of Sciences. More and more products from contaminated areas appear in shops across the country. Moreover, Belarusian universities send their graduates to contaminated regions for post-graduation mandatory work.
Helping the victims of Chernobyl
Those who took part in the rescuing operations in Chernobyl and the inhabitants of the contaminated areas became entitled to a number of social benefits. For example, the rescuers became entitled to a 25% bonus to their pensions. Those who became physically disabled as a result of the accident got the right for free or discounted medicine and a free medical rehabilitation course every two years.
In 2007 the government announced its plans to trim the benefits package for those who suffered from radiation. It provoked an outburst of resentment and protests among various Chernobyl organisations. But the authorities ignored the demands of the NGOs and victims of the Chernobyl catastrophe and limited the benefits.
In the aftermath of the tragedy numerous international donors started to initiate rehabilitation programmes in Belarus. They included provision of medication and medical equipment, technical assistance in the restoration of the contaminated territories and summer programmes for children from polluted areas. Foreign aid has been crucial in assisting the Belarusian government and society in their struggle with the repercussions of Chernobyl disaster.
However, due to political reasons the authorities have been very selective in their cooperation with foreign donors on Chernobyl-related projects. In many cases foreign funds and NGOs have been suspected of connections with the opposition. On such grounds the authorities restricted their possibilities of working in the country. As a result, people in the contaminated territories have lost considerable amounts of funding.
Plans for New Nuclear Power Plants Despite Lingering Fears
Public opinion surveys clearly show that the Belarusians still have a lingering fear of atomic energy. This is no surprise given the human and financial losses that the Chernobyl tragedy incurred on the nation.
However, in 2008 the political leadership started talking about the prospects of constructing a nuclear power plant in the country. Alexander Lukashenka then declared that atomic energy is very cheap compared to the prices of Russian oil and gas. In his opinion, a nuclear power plant will ensure Belarus's energy independence.
After numerous NGOs started to publicly protest against the government's plans the authorities launched a PR campaign to popularise the idea of a power plant. But, as is usually the case in present-day Belarus, the government's campaign was very formal and did not really listen to the public opinion.
Later the authorities asked for a Russian loan to construct the plant. In November 2011 the loan agreement was signed. Moreover, at the beginning of April in his talk with the Director General of the IAEA Lukashenka announced that Belarus could consider constructing a second nuclear power plant.
Thus, Belarus is about to enter another nuclear era even though the wounds from the Chernobyl disaster are still bleeding.
