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Lukashenka in the Russian Hands

The worst nightmare of the Belarusian regime is a serious confrontation with Russia and the West at the same time if both parties agreed to the removal of Lukashenka. Of course, this scenario is hard to imagine but it...


The worst nightmare of the Belarusian regime is a serious confrontation with Russia and the West at the same time if both parties agreed to the removal of Lukashenka. Of course, this scenario is hard to imagine but it is equally difficult to imagine such change without coordination between these stakeholders. The internal opposition is nearly crushed in Belarus but public dissatisfaction with Lukashenka’s rule is widespread in Belarusian society as never before.

The game is between Lukashenka, Russia and the West, with organized opposition as a minor player, often used as a whipping boy. The Friday news came as a threat to Minsk that its nightmare can materialize. Russia, together with the IMF, is willing to help Belarus’ struggling Belarus economy, but only if the Belarusian government will continue reforms, said Russian finance minister Alexei Kudrin on Friday at the forum on US-Russian relations in Washington.

Kudrin’s statement demonstrated that Lukashenka cannot count on unconditional support from Moscow or, perhaps, anyone at all. Much worse, Moscow recently showed that it agreed with the West even on such international ‘hot cases’ such as Libya. As Russia and China left Qaddafi without their protection, Belarusian state media were outraged that the Chinese and Russians ignored the fate of their long-standing partner. Though there are few reasons to compare Lukashenka’s rule with the rule of Qaddafi, it became clear that Lukashenka could not rely on his foreign allies anymore.At the moment, the Russian government – more firmly than ever – is holding the Belarusian regime in its hands. It deprived Belarus of its long-time lucrative business of reprocessing cheap Russian crude oil for sale of refined oil products in the West. Taking away this source of profit from Lukashenka, Moscow ruined the whole political economy of Belarusian regime. How exactly important it is, is the subject of a recent admission by Belarusian economist Georgi Gryts. According to him, about half of all Belarus’ exports are generated from by just three sources – oil, potash and black metals.

In accordance with the new arrangements on oil, Belarusians no longer be able to ear big money on refining and reselling Russian oil because a significant share of the profits now go straight into Russian pockets. After Russia introduced these arrangements, the question of an economic crisis for Belarusian regime became only a matter of time. The hard currency reserves of Belarusian National Bank diminished month by month.

The panic finally gripped the Belarusian population watching such developments as they continue to expect a new devaluation of the national currency. Losing its economic foundation, the Belarusian government could only turn to Russia for new loans. The West was not an option following post-election accusations against some Western countries through Belarus’ propaganda and the arrogant political line taken by the Foreign Ministry of Belarus supporting Qaddafi. When in mid-March Russian Prime Minister Putin visited Minsk, the most important issue on the table were new loans to Belarus.

It seemed settled that Lukashenka would get ca. USD 13 billion: 6 billion for a nuclear power plant, 2 billion from Anti-crisis Fund of the Eurasian Economic Union (EurAzES), one billion dollars as in credit from the Russian government and USD 4.3 billion in the form of oil subsidies. Yet something went terribly wrong for Minsk and now Lukashenka is being pressured to make reforms and threatened to be deprived of the promised money. The situation could hardly be worse. The brutal crackdown which followed the presidential elections on December 19th and the terrorist attack of April 11th shocked the nation. People are now hunting for dollars and euros and buying up as much food, commodity products and cars as they can, quite reasonably expecting them to get much more expensive.

The measures taken by Belarus’ government so far have proven futile. It is no wonder that the Belarusian leadership once again recently compared Belarus to a besieged fortress penetrated by enemies. Even before the presidential elections we expected them to pressure us, while purposefully and methodically destabilizing the situation. It came true – first on the foreign currency market, then on the food market, and after that an explosion happened in the underground. A long single chain.

Lukashenka continues to denounce those “who do not like our [public] stability and tranquility”. In another statement he instructed investigators to interrogate opposition activists who expressed their views on the terrorist attack. Such conspiracy thinking, however, shows the desperation and inability to seek rational solutions. After all, the current problem that Belarus produces less than it consumes cannot be overcome by a public hate campaign.

The only solution is to carry out serious reforms and modernize the Belarusian economy to make it produce more. Towards that end, foreign currency is indispensable, and given the circumstances of rather an irrational confrontation with the West, large amounts of such money can come only from Russia.



Siarhei Bohdan
Siarhei Bohdan
Siarhei Bohdan is an associate analyst at the Ostrogorski Centre.
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