Belarus-Russia: History of Disintegration
In the last days of July, the backbone of Belarusian economy – the potash industry – suffered a severe blow dealt by its Russian partner.
The Russian company Uralkali refused to work anymore with the Belarusian Potash Company (BKK), a joint enterprise of Uralkali and Belaruskali authorised to sell their products throughout the world.
These developments have seriously weakened the global position of Belaruskali. The “potash collapse” is just one more illustration of the problematic relations between Belarus and Russia.
Both Russian private business and the government do not perceive their Belarusian counterparts as equal partners. Additionally, Belarusians have to work with Russian business without a sufficient legal framework. In these circumstances, integration between the two countries has had no real chance from the very beginning.
Some bigger agreements simply failed or fell apart like the joint companies in the potash or oil industry. Other projects were implemented many years behind the schedule – whether it be military cooperation or the sale of Belarusian pipelines to Russia.
Younger Brother Is Always Wrong
Russian Uralkali, of course, immediately blamed Belarus for the failures of the joint business venture. The Director of Uralkali said to the Vedomosti daily newspaper that it was Lukashenka who allowed the national mining company Belaruskali to sell potash without involving the Belarusian Potash Company and violated thus the previous agreement to work through this company. Yet the Uralkali itself has sold a bulk of its own goods without the Belarusian Potash Company. In the least, the Russian position looks dubious.
An information war followed soon afterwards. “This situation confirms only one truth – Belarusians, as always, are incapable of working with partners in a civilised way,” said the well-known Russian political commentator Andrei Suzdaltsev Radio of Liberty.
Yet the background of this story indicates that something different might have happened. Suleiman Kerimov, the Russian owner of Uralkali, wanted to acquire Belaruskali as he previously acquired another competitor of Uralkali – Silvinit. If he only managed to add Belaruskali to its business empire, he could control up to 43% of global potash market. Kiryl Koktysh of the Moscow State Institute of International Relations says that Uralkali’s actions may indicate Kerimov’s attempt to force Minsk into selling Belaruskali.
With all of its problems, the Belarusian Potash Company was, according to Belarusian economic web-portal zautra.by “probably, one of the most successful strategic Belarusian-Russian economic alliances to have existed since the moment of the Soviet Union’s demise”. This begs a question: if this was the best, how exactly have the other projects?
Belarusian-Russian Integration: History of the Decline and Fall
The chronicle of Belarusian-Russian integration looks like a tug-of-war between Minsk and Moscow. Pompous rhetoric are dismissed by the reality of trade wars and agreements’ delayed implementation. The list of failed major projects between the two countries is another skeleton in the closet of bilateral relations.
|Project||Years of Implementation||Costs (planned or factual)|
|International Potash Company||1992-2005||No data|
|Belarus-Russian oil company Slavneft||1994-2002||Sold in 2002 for USD1.86 billion|
|Belarus-Russian oil companies Rosbelnafta and LYUBel-Oil||1995-2001||Russian investment by 2002 was planned to reach USD 550 million|
|Modernisation of Minsk brewery Krynica by Russian Baltika beer company||2000-2003||Factual Russian investments reached USD 10.5 million, a controlling block of shares was promised to be sold in 2001 for USD 50 million|
|Project on PET-granules production on facilities of Mahilyou’s company “BelPAK” by the Russian Itera||2001-2006||By 2003, Itera allegedly invested more than USD14 million.|
|Development project Minsk-City by Itera
||2008-2012||Planned amount – USD 4.8 billion|
It is more to the point at this time to talk about Belarus-Russian disintegration rather than integration. Some experts admit that the problems in Belarus-Russian relations exist yet believe that some areas are integrating smoothly, defence cooperation in particular.
Anaïs Marin of the Finnish Institute of International Affairs argues in a publication of the Polish Centre for Eastern Studies that defence cooperation is “unfold[ing] regardless of the disputes that sporadically sour relations between Minsk and Moscow, standing out as the main achievement of the Union State [of Belarus and Russia] – if not the only one”. Yet, Minsk has delayed the implementation of every military agreement with Moscow, sometimes for years – as happened with the Single System of Air Defence.
On the other hand, Moscow failed to equip its closest ally with adequate arms – only now, has Belarus finally replaced its remaining old air defence systems, the S-200, with the S-300. The Russian army meanwhile is already replacing the S-300 with S-400. Belarus has no real prospects to get any S-400 in coming years. It is no wonder, then, that the Kremlin does not care about its Belarusian allies. Despite the rhetoric of Belarusians defending Moscow, Belarus pursues its own military policy and enters military agreements with Russia when it wants Moscow to foot the bill.
No Friends in Moscow
There are numerous reasons explain the failure of individual projects in Belarus-Russian relations. Yet there is one fundamental factor. Russia does not perceive Belarus as an independent state with its own needs and interests. “Russia believes that Belarus is its property,” said once in Belsat TV Belarusian analyst Paval Usau. Actually Moscow looks in the same patrimonial way on all post-Soviet nations. The latest Russian-Ukrainian trade war proved this point once more.
Partly, Belarus itself is guilty of the discriminatory behaviour that has been coming from Russia. First, Belarus is still failing to consolidate its own nation and to draw a dividing line with Russia. After all, good fences – both physical and mental – make good neighbours. The very close alliance between the US and Israel is a model proposed by Lukashenka for Belarus-Russia relations. Yet Washington looks on Tel-Aviv as an independent nation not as a breakaway territory. In particular, this means that Washington wishes for Israel to be robust and powerful. It is better to have a stronger ally.
On the contrary, Moscow considers any Belarusian success as a threat. Thus, in recent years it did not welcome attempts by Minsk to diversify its sources of imported oil. Russia actively counteracted Belarus’ policy of buying Venezuelan oil, which is quite logical from the Kremlin’s perspective. If the Kremlin considers Belarus not as an ally but simply a breakaway territory, then this territory should not become strong. The reasons that Moscow does not give Belarus new military equipment become clearer when this is considered. As Anais Marin put it, the Russian establishment sees Belarus as a territory, and not real ally.
Second factor between Russian dismissive stance towards Belarus is lack of a Belarusian lobby in Russia. The Belarusian government has done a lot to find such support in Russia. Minsk tried – rather successfully to present itself as the last island of sunk empire and to mobilise Russian right-wing political groups. The Belarusian regime clearly could find some support among Soviet-time generals, right-wing intellectuals and regional industrial bosses. Yet this support appears rather unorganised and gives Belarus little leverage in disputes with the Kremlin.
A Civilised Divorce
In last decade, Russian officials have effectively renounced earlier rhetoric of integration with Russia. They apparently had no illusions that what Lukashenka has done – at least in the last decade – resembles a gradual separation from Russia. Furthermore, Minsk is not Russia’s marionette. For all its services, the Belarusian state received from Russia subsidies which last year amounted to ca. USD10 billion (16 per cent of GDP).
Oddly enough, it is often Western policies which drives Belarus into the Kremlin’s hands. So, for example, the problems of the Belarusian Potash Company began last year when the EU threatened to impose sanctions on Belarus. It created a favourable atmosphere for Russians to put pressure on Minsk to sell Belaruskali to Russian potash magnate Kerimov. The media then reported about plans to found a new Russian-dominated potash company – Soyuzkali – whose office had to move from Belarus to Switzerland, i.e., under control of Kerimov. It did not happen, yet contributed to a crisis inside the Belarusian Potash Company.
The Russian option for Belarus remains elusive. Objective opportunities which exist for Belarusian business and individual Belarusians in Russia are offset by huge biases against them that are regularly demonstrated by Russia. Moreover, aggressive Russian attempts to take over Belarusian assets leave little space for integration and cooperation between two countries. In a word, Belarus is not as close to Russia as frequently assumed and the West should never dismiss Belarus as an active actor.
Changes in the Electoral Law, International Ratings and Ukraine – Belarus State TV Digest
This week Belarusian TV reported that Ukraine will lose rather than win if it signs the Association Agreement with Brussels. It also covered the falsification of reports in the Belarusian state-run agricultural sector and a contest for the best crop gatherer in Belarus.
State TV argued that the Transparency International report on corruption is unreliable and underestimates CIS countries. Alexander Lukashenka’s talk about reforming the Electoral Code, as well as science and development of the economy got significant coverage.
Experts: Ukraine will lose its independence. Belarusian TV quoted unnamed experts in Ukraine who published a document criticising the Association Agreement that Kiev is planning to sign at the Eastern Partnership summit in Vilnius. The broadcast quoted the experts arguing that “without a change in the Ukrainian Constitution, the state cannot sign the agreement”. The potential amendments will limit the independence of Ukraine, the reporters added.
Another controversial argument was made related to the establishment of international bodies, and the recognition of the jurisdiction of the International Criminal Court. Belarusian television concluded that recently Ukraine also made a step towards the Customs Union after it became an observer for this organisation which includes Belarus, Russia and Kazakhstan.
Russia-US relations. State TV reported that relations between these countries are in a deadlock. It quotes Barack Obama, who talked about taking a pause in the two states’ mutual relations, but also quoted Sergey Lavrov, who was being persuasive said that “there is no Cold War between both countries”. The administration in Washington also needs to cope with the dissatisfaction of American citizens in the aftermath of media revelations about the collection of private data from Americans and foreigners from emails and telephone conversations.
Belarus-Poland relations. According to state television, Poland initiated a meeting to discuss mutual relations between the countries at the Belarusian Ministry of Foreign Affairs. No further information was provided.
Changes in the electoral process to make it more transparent and democratic. Lukashenka chaired a meeting on changes to electoral procedures “to optimise the electoral process”. According to Belarusian TV, the work on this began back in January. The main goal of the amendments is the “maintenance of both national interests and international standards”. A majority of these changes are related to parliamentary elections and include one round of elections to the parliament, more electoral committees, and prohibition of election boycotts.
Belarusian TV also divulged that some issues had caused disagreement among the participants of the meeting. Not everyone shared the same opinion about the changes to campaign funding. Uladzimir Andrejchenka, head of the lower chamber of the Belarusian Parliament, argued that without money it will be difficult for candidates to collect signatures.
The participants of the meeting decided that state funding would be increased threefold, although some advocated making it five times higher. Under the changes, all candidates will also have to reveal whether they have a criminal record. The representatives of the higher chamber of the Parliament stated that “in general the project is a good one. It makes the electoral process more democratic and transparent”.
Reorganisation of Belarusian science sector. Lukashenka organised a meeting at which he gave officials three months to implement serious changes in the Belarusian science sector. He demanded that they optimise their management of science and also reform the Academy of Sciences. He also raised the issue of funding: “from 1 January we will not pay high salaries to anyone, even to scientists (…) because we assume that scientists are smart people and should earn money both for themselves and for the state. So why should we waste money from a budget if we will not get anything in return?”.
Who is hiding the real numbers and why? Recently the Belarusian Ministry of Interior revealed a number of incidents of falsifying reported numbers in the agricultural sector. State TV stressed that most of the incidents appeared in reported figures on the volume of milk held in storage, but there were also some issues with the ongoing harvest campaign. It quotes the minister, Ihar Shunievich, saying that “this is [done] to hide the incompetence of a farm’s leadership”.
“Others come to learn from us”. State TV proudly reported that the first Belarusian nuclear power plant in Astraviec is being built in accordance with modern international standards. It added that the most influential organisations specialising in the area, such as the International Atomic Energy Agency and Russia’s Rosatom, have confirmed this.
State TV also reported that the Belarusian side, for the second time, will discuss related environmental issues with representatives of Lithuania, because “Belarus has always been in favour of an open dialogue with its neighbours”. Minsk even plans to issue free visas and bus transfers to Lithuanian citizens who come to Astraviec for consultations. An activist from Ecologic Initiative confirmed that the management of construction is paying attention to the high environmental norms.
The media has reported that Minsk spent $250m on preparation of the facilities’ construction alone. It proudly boasted that experts from Poland, Russia and Bulgaria have come to Belarus to gain experience.
International ratings are untrustworthy. State television reported that a wave of corruption scandals have recently swept over European countries, such as Spain, Czech Republic and France. They made light of the fact that paradoxically the Czech Republic ranked rather high on Transparency International’s report (54 out of 176), despite having serious problems with corruption “from low-level clerks up to the prime-minister’s assistant”.
According to Belarusian television, CIS countries are unfairly ranked very lowly. State TV explained the logic behind this as follows: “an investor looks at the rating, chooses higher positions and brings his money exactly where he should. In that way they take potential investment opportunities away from their rivals”. To prove the unreliability of international ratings, state TV gave the examples of Italy and Australia where courts have convicted credit ratings companies such as Standard & Poor’s.
Belarusian company conquers Ukraine. Belorusneft will start working in oil fields in Ukraine. State television commented that “entry of the Belarusian company to the Ukrainian market will be just another step in development of its export potential”. It also added that the Belarusian oil companies are already successfully working in Western Siberia, Venezuela and Ecuador.
Modernisation of Belarusian economy. Lukashenka discussed with Deputy Prime Minister Piotr Prakapovich the campaign for the modernisation of the economy. The authorities have already introduced their strategy in more than 3,000 state companies. The TV noted that the wages of employees had already increased by 11.5% in the first half of a year, and basic capital has been increased thanks to more investments. However, the modernisation campaign faces some problems. As Prakapovich stated, the lack of an effective management system is hindering it.
India interested in privatisation of Belarusian companies. Manoj Kumar Bkharti, Indian ambassador to Belarus, confirmed that his country is keen to buy shares in Belaruskali. State TV also reminded viewers that the Belarusian authorities announced that wanted to privatise the company back in 2011.
Belarus Digest prepared this overview on the basis of materials available on the web site of Belarusian State Television 1 (BT1). 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.