Can Belarus punish Lithuania for its position on the Astraviec NPP?

Klaipeda Port, Lithuania (photo: Wikimedia Commons)

On 7 December, the head of the Russian Railways stated that his company can provide a large enough discount to Belarusian companies to allow them to cease transporting cargo through the Baltic States. At the same time, Latvian officials continue to pitch their ports to the Belarusian government.

So far, Belarus primarily uses Lithuanian ports, but Russia and Latvia may take advantage of the cooling relations between Minsk and Vilnius – connected with Lithuania's criticism of the Belarusian nuclear power plant – to promote their interests.

Belarusian officials have hinted several times that Lithuania benefits significantly from the transit of Belarusian goods, so the Lithuanian government should soften its position on Astraviec. Nevertheless, it seems that Belarus will continue to use Lithuania as a transit country – as this remains an economically expedient option – but will also try to diversify supplies.

No more love between Minsk and Vilnius

The dynamics of the Belarusian-Lithuanian relationship often differ from the relationship between Belarus and Europe. Even in 1996, when Lukashenka’s regime was still consolidating, Lithuanian President Algirdas Brazauskas met with the Belarusian ruler. In 1997, Lithuania blocked a resolution of the Baltic Assembly criticising the Belarusian authorities for human rights violations.

Lithuanian politicians, such as the president Dalia Grybauskaite, frequently sought to improve relations with Belarusian authorities. This was the case not only during times of Belarusian-European dialogue in 2008-2010, but also following the brutal crack-down on demonstrators in December 2010.

In 2011, the Lithuanian President stated that although the Belarusian opposition keeps asking for more and more money, she cannot heard in their words that Belarusian independence is a priority for them. Later, in 2013, Belarusian Prime Minister Mikhail Miasnikovich visited a Belarusian-Lithuanian economic forum in Klaipeda.

Thus, Belarusian-Lithuanian relations were sometimes warmer than Belarusian-EU relations, and sometimes on the same level. This is no longer the case. Harsh criticism from Lithuania regarding the future Belarusian nuclear power plant, along with statements that the construction of the NPP is like an atomic bomb against Vilnius, raise doubts about whether Belarus and Lithuania can cooperate at all.

Currently, Lithuania is working to create an international coalition to restrict the supply of electricity from Belarus to Europe after the launch of the NPP. On 27 October, Estonian President Kersti Kaljulaid declared that 'in Astraviec, there is clearly a problem if all the costs, including environmental costs and risks, are not factored into the price scheme. In that case Europe should not accept such energy on its market.'

What Belarus can do

It comes as no surprise that such statements by Lithuanian politicians annoy the Belarusian authorities. Back in May, Belarusian Foreign Minister Uladzimir Makei hinted that 'cooperation between the countries remains in Lithuania’s best interests, as the transit of Belarusian goods through Lithuanian ports contributes to the development of the Lithuanian economy.'

According to some media estimates, Belarusian companies account for one third of the capacity of the Lithuanian port of Klaipeda and the transit of Belarusian goods makes up about 2 per cent of Lithuania's GDP.

On 7 December, head of Russian Railways Oleg Belozerov said that his company was prepared to offer a 50 per cent discount to Belarusian refineries for the transportation of their goods. In doing this, the Kremlin means to punish the Baltic countries for their stance on sanctions against Russia; Russian leadership also wants Belarus to take part.

Latvia suffers from Russian foreign policy in this regard, but unlike Lithuania, it has warmer relations with Minsk and may use the cooling between Minsk and Vilnius to its advantage. In September, Uladzimir Makei met in New York with Edgar Rynkevich, the Latvian Minister of Foreign Affairs; in October, the Latvian Transport Minister Uldis Augulis visited Belarus. In November, the Belarusian Prime Minister met with the Latvian Minister of Economy in Minsk. All these meetings involved discussion of the transit of goods, among other topics.

So far, the results of these negotiations remain unknown, but few will be surprised if they result in greater use of Latvian ports by Belarusian companies. Nevertheless, a complete reorientation of Belarusian goods remains unlikely. Belaruskali, a Belarusian potash producer, owns 30% of Biriu kroviniu terminals (BKT), one of Klaipeda's terminals. Moreover, VKT is currently investing €8 mln in the development of the terminal, indicating that Belarus has no plans to curtail its activities in Lithuania.

As Vytis Jurkonis, a Lithuanian political scientist, told Belarus Digest, 'as long as transit through Lithuania remains economically feasible, the Belarusian authorities will take advantage of it, as they lack the luxury to choose more expensive transit roots'. The problem, however, is that Latvia and Russia appear willing to propose conditions beneficial enough for Belarus to stop relying on Lithuanian ports.

No time for cooperation

The conflict surrounding the nuclear power plant and the possible reorientation of Belarusian goods are not isolated cases. Instead, they reflect a trend in Belarusian-Lithuanian economic cooperation. The Belarusian and Lithuanian authorities seem reluctant to look for opportunities for new joint economic projects.

Trade in goods between the two countries decreased for the fifth year in a row, while imports from Lithuania fell for the fourth consecutive year. During the first 9 months of 2016, the trade turnover fell by almost 20% compared to the same period in 2015, according to the Belarusian Statistical Office.

Investment cooperation became less optimistic than before, and the authorities of both countries are paying less attention to it. If in 2013 and 2014 the prime ministers of both countries attended Belarusian-Lithuanian economic forums, in 2015 and 2016 the level of representation decreased. The Belarusian delegation in 2016 was headed by the Deputy Minister of Economy.

The conflict surrounding the Astraviec NPP became a poison to Belarusian-Lithuanian relations. It seems that as long as Minsk and Vilnius continue to fight about the Belarusian nuclear plant, economic cooperation will not be a priority.

Ryhor Astapenia is a Development Director at the Ostrogorski Centre, and editor-in-chief of Belarusian internet magazine Idea.

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