Russia and Belarus clash over oil revenues – Belarusian state press digest
In December 2018, Alexander Lukashenka and Vladimir Putin held a series of tense meetings about compensating Belarus for Russia’s latest oil tax reform. The Russian tax “manoeuvre” foresees a decrease in export duties on oil and an increase in tax on the extraction of natural resources.
The manoeuvre will inevitably result in the Belarusian refineries receiving raw materials at world prices. According to the Belarusian finance minister, Maksim Yermalovich, Belarus expects to lose about $293m in 2019 due to the tax manoeuvre. Moreover, Belarus might lose from $8-12bn by 2024 unless the Russian government provides compensation.
While the Belarusian state press downplayed the increasing tension between Lukashenka and Putin, the frank remarks made by the President of Belarus spoke for themselves. Lukashenka emotionally criticised Russia for abandoning its key ally and attempting to destroy Belarusian sovereignty. Although Lukashenka’s press secretary, Natallia Eismant, described the talks with Russia as “constructive”, there remains little clarity over the compensations.
Mid-December: Talks fail, Lukashenka outraged
On 14 December, BELTA reported that the Belarusian side expected compensation equal to the losses accruing due to the tax manoeuvre. However, the negotiations between the two states’ prime ministers, Dmitry Medvedev and Siarhei Rumas, had failed to provide any tangible results the day before with Belarus and Russia possessing very different views on the matter.
According to the Belarusian deputy prime minister, Ihar Lyashenka, the Belarusian demands for compensation are fully grounded in the Eurasian Economic Union Treaty, which stipulates equal conditions for the member states. Lyashenka emotionally inquired:
If compensation applies only to Russian companies, and if the tax manoeuvre is implemented, how will we, the government, be able to look into the eyes of our citizens?
Lukashenka displayed even more emotion over the failed talks with Medvedev. Instead of providing analytical comment, the Belarus Segodnya newspaper printed expressive quotes from the Belarusian president regarding his country’s position on the compensation. In particular, Lukashenka strongly criticised Russia for creating “problems out of nowhere” and effectively dumping its major ally:
Why create problems when the whole world is against us, Belarusians and Russians? Amid chaos and trade wars, we must unite and stand up to the external pressure. If you do not sell us an additional five billion cubic meters of gas, then what will you do with this gas, given the fact that many states frantically abandon hydrocarbons? There must be equal conditions, and you cannot worsen the economic situation of Belarus. Why destroy your only ally?
Lukashenka also stressed that the loss from the tax manoeuvre would constitute a “giant hole” in any future economic and financial integration with Russia. Moreover, the President of Belarus maintained that if he had known of the lack of equal conditions between Belarusian and Russian businesses, Belarus “would never ever join the union with Russia.”
Apart from that, Lukashenka emotionally touched upon the issue of Belarusian sovereignty in his press-conference with journalists from the Russian regions. Lukashenka called on Russia to resolve the conflict peacefully, without “attempting to blackmail Belarus.” According to Lukashenka, “if they want to divide us into regions and lump us into Russia, this will never happen.”
Media reaction: Babich interferes
Interestingly, Soyuznoe Veche, the official newspaper of the Union State of Russia and Belarus, failed to quote any of Lukashenka’s criticisms of Russia. Instead, the media resource included only a selection of Lukashenka’s comments that called for further integration with Russia.
On 17 December, Soyuznoe Veche published an extended interview with Mikhail Babich, the Russia’s ambassador to Belarus. Babich boldly touched upon the future perspectives of the Union State of Belarus and Russia, firmly maintaining a pro-Russian position.
Babich acknowledged certain problems of “mutual trust” between Belarus and Russia in terms of economic cooperation. At the same time, the ambassador rebuked the alleged economic discrimination of Belarus by stressing the territorial differences between the two states.
According to Babich, Russia fulfilled all of its economic and financial obligations to Belarus, including timely provision of credit tranches and granting access to the Russian market for “almost all groups” of Belarusian goods.
As for the tax manoeuvre, Babich maintained that Russia had already supported the Belarusian economy with $4–4.5bn annually, and providing compensation for the tax manoeuvre would result in an additional $3–4bn support package. According to Babich:
The support model for Belarus, [which comes] in the form of providing cheap raw materials, has exhausted itself. We need concise legal mechanisms that will properly regulate the application of the legislation of one country [Russia – ed.] to develop the economy and social sphere of another country [Belarus – ed.] in the framework of the Union State.
Christmas meeting with Vladimir Putin “constructive”
On 25 December, Lukashenka visited Moscow to continue the negotiations with Putin. BELTA reported “constructive talks” and the bringing of positions “closer together” by citing Lukashenka’s press secretary Eismant.
Both presidents expressed satisfaction about the general development of Belarus-Russia integration, reports Belarus Segodnya. In particular, Putin stressed the abundance of Russian direct investment in the Belarusian economy as well as diversified economic relations. Lukashenka maintained the amicability of mutual ties between the two peoples by claiming that “existing problems are incomparable to the achievements of integration.” Nevertheless, the presidents agreed to conduct a second meeting on 29 December, mainly due to “the President of Russia’s desire to get to the root of the problems.”
Pre-New Year meeting with Putin and its postscript: Nothing clear
On 29 December, Alexander boarded a plane to Moscow again to meet the Russian president. BELTA quoted both leaders’ mentions of the creation of the inter-state working group on economic and other integration problems as a sign of progress. Belarus’s president maintained that integration problems “should be resolved soon.” At the end of the meeting, Lukashenka and Putin exchanged warm New Year greetings. Since then the official media has failed to mention any results from the negotiations on tax manoeuvre.
Nevertheless, on 10 January 2019, Lukashenka held a working meeting with the key figures from the Belarusian parliament. The President of Belarus mentioned numerous “disgracefully unresolved” economic questions related to economic integration with Russia, reported Belarus Segodnya.
Lukashenka stressed once more that “the Union State of Russia and Belarus could be built only on an equal footing, […] otherwise this will transform into the annexation of the weak by the strong, or incorporation.”
Lukashenka complained about the lack of clarity from the Russian side regarding the compensation over the tax manoeuvre. As an alternative, Lukashenka proposed buying oil from the Baltic ports and processing it in Navapolatsk for the Baltic republics. According to the President of Belarus:
Do not assume that this [absence of compensation] is a disaster. But if the leadership of Russia chooses such a path — the loss of a single ally in the western direction — that is their choice.
The State Press Digest is based on the review of state-controlled publications in Belarus. Freedom of the press in Belarus remains restricted and state media convey primarily the point of view of the Belarusian authorities. This review attempts to give the English-speaking audience a better understanding of how Belarusian state media shape public opinion in the country.
Top 10 events of Belarus Civil Society in 2018 according to Pact
Traditionally Pact highlights some of the most prominent developments in and affecting Belarus civil society. Belarus Digest publishes the top ten list below.
Soft “Belarusization” of the Year: BNR#100
A large-scale celebration of Freedom Day dedicated to the 100th anniversary of the Belarusian People’s Republic (BNR) took place on March 25, in front of the Opera Theater in Minsk and gathered – according to various sources – up to 50,000 Belarusians. For the first time in many years, this day was held as a festival and for the first time sanctioned by authorities in the down-town of Minsk. Organized by civil society and opposition political parties, a crowdfunding campaign to conduct the event broke the national record by the number of donators: over 2,000 people contributed $25,000 to cover event-related costs.
Engagement of the Year: Civil Society Gains Voice
The international forum Eastern Europe: In Search of Security for All, organized by an unregistered Minsk Dialogue Track-II Initiative in May 2018 to discuss challenges to regional and global security, was addressed in person by Alexander Lukashenka. Belarus top-officials were in attendance of other flagship civil-society events. Few examples include: Prime Minister Siarhei Rumas opened the Global Entrepreneurship Week, GEW; First Deputy Prime Minister Alexander Turchin was a key-note speaker at the Kastryčnicki Economic Forum, KEF.
Civic Action of the Year: Gender Initiatives
At least two noticeable gender-focused initiatives emerged in 2018 in response to actions of state officials. The sexist remark Lady, Comfortable in Daily Life in the state-run newspaper describing an independent female journalist became viral in social networks and gave birth to the eponymous Art project. The campaign March, Baby! originated after Lukashenka rejected law criminalizing domestic violence as ‘Western nonsense’, prepares a public march to show that the issue is pertinent to the mainstream society in Belarus.
Grassroots of the Year: People Take Action
The growth of local activism continues in Belarus, especially in the field of protection of residents’ rights. In the village of Kolodishchi, local residents resist the construction of a plant that threatens a green zone near their houses. In Brest, regular rallies gather hundreds of people to protest against the construction of a battery plant with potential lead emissions.
Picketing in Kurapaty lasts for half a year: activists are seeking the closure of a restaurant built near the memorial to the victims of Stalin’s repressions.
Fundraising of the Year: Imena platform
Imena (’Names’ in English) non-profit platform is known for its local fundraising success. Starting its work as an online magazine about people in need, Imena attracted over $700,000 to support social projects and its own operations. In 2018, together with a commercial bank, Imena launched a unique initiative: 0.5% of each bank customer’s purchase goes for the Imena-sponsored projects. Now Imena is transforming into a fund that will help ad-hoc teams of activists develop from scratch into sustainable civic initiatives.
The inclusion of the Year: Sasha Avdevich and School of Inclusive Barista
Sasha Avdevich, a wheelchair user, is a bright example of how people with disabilities can live a full life. Sasha travels the world, runs his blog on YouTube and initiates projects for the “invisible” people to society. In 2018, Sasha created the first-ever School of Inclusive Barista that helps people in wheelchairs get a new profession. One more civic start-up is implemented jointly with a local sneaker factory: for each pair sold, part of the money goes to charity.
Repression of the Year: Independent Media
In 2018, independent media became a focus of government persecution. During the year, over 100 fines were imposed on reporters – an all-time record. In August, a wave of searches of Belarusian major independent media’s newsrooms and detentions took place under the so-called BelTA case – a criminal investigation into alleged unauthorized access to paid services of the government-owned BelTA news agency.
While 14 of the 15 accused journalists have been cleared of criminal charges having paid at least $35,000 in fines, the TUT.BY editor-in-chief is still under criminal investigation. Early in the year, an opposition website Charter97.org was blocked in Belarus.
’Never Before’ of the Year: Belarus Government Reports before the UN Human Rights Committee
Belarusian authorities presented a country report at the 124th session of the UN Human Rights Committee in October, in Geneva. The government last reported over 20 years ago despite the fact that Belarus is a party to the International Covenant on Civil and Political Rights and is obliged to periodically submit reports on the implementation of the Covenant. Belarusian human rights coalition prepared an alternative report.
Research of the Year: Supporters of Market Economy More Than Doubled Over 10 Years
Half of the Belarusian society stands for partial or full market economy, according to the study that examined the values of Belarusians in 2018. Belarusians believe that the main task of the state is “to give an opportunity to earn money”. Thus, over the past 10 years, the number of people who share the principles of a market economy has doubled – a major shift in Belarusians’ mindset towards paternalistic society? The study was commissioned by the IPM Research Center on the eve of Kastryčnicki Economic Forum, KEF.
And Now For Something Completely Different of the Year: Stepping on the Same Rake?
500,000 Belarusians are in the “social parasites” database. This is a list of the “freeloaders” or those who are not employed in the Belarusian economy, composed in early December to correspond the president’s decree #1 On Employment. Recall that the previously cancelled decree #3, imposing a “social parasite tax”, caused mass protests in 2017 across the country when tax authorities delivered “happiness letters” to 470,000 adult Belarusians. Lesson not learned!