The State of the Union: Belarus, Russia and the virtual state
On 18 July Aliaksandr Lukashenka and Vladimir Putin met in St Petersburg. Integration within the framework of the Union State of Belarus and Russia, which will mark its twentieth anniversary in December, featured prominently on the agenda. It has become a leitmotif in recent meetings between the two heads of state. Remarkably little has been achieved in two decades since the Union State’s creation and the reluctance of either country to abandon the project prompts one to reconsider its contemporary function in the bilateral relationship.
Both Belarusian and Russian rhetorical commitment to the Union State has looked odd ever since the 2015 formation of the Eurasian Economic Union supplied a parallel framework for economic and, if desired, political integration. Despite this, the Union State continues to generate flurries of activity in both states’ bureaucracies. Speaking in St Petersburg, Lukashenka ambitiously proposed that the problems besetting the Union State should not be carried over past the December anniversary.
Two sides of the coin
Over the years – interspersed with lulls in activity – officials have drawn up roadmaps for integration, formed working groups, and often talked up their accomplishments. No doubt this proliferation of activity impresses some observers, but a less impressive picture emerges when one looks at policy implementation.
Take the widely discussed issue of a common currency between the two states. The issue predates the Union State: the 1996 Treaty on a Community of Sovereign Republics envisaged the introduction of a single currency by the end of 1997. In 2005 Lukashenka praised ‘difficult but fruitful work’ towards its creation. Yet on 21 July Russia’s Minister for Economic Development said of the matter: ‘We haven’t discussed this issue thoroughly.’ Clearly the importance of the single currency means moving towards it as the pace of a garden snail.
From one angle this is unsurprising. If one takes the European Union as a model of economic integration, then monetary union came late in the day. The European Community established a free trade area in 1957, a customs union in 1968, and a single market after 1986. The 1992 Maastricht Treaty provided for monetary union, which became a reality only in 2002. The EU model would suggest that Belarus and Russia need to do more work on building a single market before addressing a potential monetary union. This would seem to be what Dmitry Krutoi, Belarus’s Minister for the Economy, had in mind when he spoke on 21 July of a roadmap to establish unified industrial markets by 2021.
From another angle it is telling of the prospects for progress. If Belarusian and Russian officials had a well-formulated plan, then one wonders why statements over the years have been so inconsistent. There simply doesn’t appear to be the political will. Russia does not want Belarus to wield influence on monetary policy, while Belarus insists it must have equal rights alongside Russia. Hence the impasse.
Economics or security?
The Union State emerged from the uncertainties of the 1990s. For Russia, the Union State served security interests by providing a vehicle for unifying defence structures even if officials always emphasised the economic and political dimensions of integration. While most military cooperation happens outside the Union State framework, the recent endorsement of a new Union State military doctrine shows the continued significance of the Union State to the two states’ security alliance. It also bolsters Russia’s arguments to retain its military presence in Belarus; leases on its radar and communications facilities expire next year.
In addition, the Union State has served a useful function in keeping Belarus away from other suitors. The Kremlin’s dislike for EU engagement in post-Soviet eastern Europe is well-known and, from Russia’s perspective, the Union State shelters Belarus from integration into EU – and, more recently, Chinese – economic designs. Nonetheless the establishment of the Eurasian Economic Union superseded this function and Russia has long strived to move away from a bilateral model allowing hefty subsidies to Belarusian enterprises. For this reason, the Union State increasingly looks like an inconvenience to Russia rather than a help.
For Belarus too, both economic and security dimensions characterise the Union State. The framework ostensibly provides a mechanism for avoiding barriers to trade with Russia, although in fact non-tariff obstacles can be readily erected. The Belarusian dairy industry knows this all too well. The Union State has also allowed Belarusian enterprises to benefit from Russia’s domestic rates and receive hydrocarbon subsidies, although again the Eurasian Economic Union to some extent supersedes this.
Arguably, the main benefit to Belarus of the Union State over the past two decades has been in terms of ‘regime security.’ Specifically, there has almost certainly been a conviction among Belarus’s leaders that Russia is more interested than other external actors in keeping the Lukashenka regime in power. Russia has sheltered Belarus’s political and economic systems from the alternative liberal models pushed by Western states. However, Russia’s military intervention in Ukraine and its application of economic and diplomatic pressure on Belarus has most likely gone some way to undermining this conviction.
There is then, as in the case of Russia, tension about whether Belarus’s interests continue to be best served by the Union State.
The virtual state
The function of the Union State in 2019 still looks puzzling. Belarus’s firm opposition to surrender any sovereignty to Russia, combined with Russia’s unwillingness to view Belarus as an equal rather than junior partner, stymie prospects for further integration within its framework. Instead, the Union State is best viewed as a forum for shadowboxing: through it the two sides appear to address substantive problems in the Belarus-Russia relationship without landing any actual hits. Without a big shift in either state’s position – a shift of the kind barely imaginable in current conditions – the Union State will remain a virtual state.
Paul is an associate analyst with the Ostrogorski Centre and an associate fellow with the Minsk Dialogue Council on International Relations.
2019 Parliamentary Elections and New Constitution
In spite of the reduced oil donations from Russia’s side and imposed limitations on Belarusian agricultural exports, Lukashenka will not concede to steps of real integration (unification of currencies, creating common customs, creating supranational institutions within the union state etc.).
Currently, the statements of the Belarusian side on diversification of oil supplies is an attempt to blackmail Russia. In reality, the Lukashenka team do not take any measures aimed to diversify oil supplies. It is highly unlikely that in response to increasing US military contingent in Poland Lukashenka would agree to deploy Russian military contingent or Russian military bases.
Lukashenka will bid for the presidency at the presidential elections that are to take place in 2020, after the parliamentary elections. In the next presidential term, he will be thinking of a successor. Lukashenka speaks of a new Constitution, meaning the forthcoming hand over of the authority to a successor.
Despite the growing disagreements in the issues of the integration within the union state, the Kremlin and Lukashenka will not announce the end to the project.
Belarus-Russia Relations: disagreements on integration
On December 13, 2018, the Vice Premier of Russia Dmitriy Medvedev claimed: “Russia is ready to keep moving on the way of building up the union state, including the creation of the single currency emission centre, the unified customs, courts, auditing chamber.” Since then, practically every month the sides have been exchanging statements of strongly different variants of developments in the relations within the union state.
The Russian side suggests discussing its initiatives on deepening integration. On December 14, Lukashenka claimed: “If someone wants to pop us into Russia – that will never happen… Under the pretext of the deep integration, Moscow wants to incorporate Belarus into Russia. I understand these hints: get the oil, but go ahead, ruin the state and enter Russia.”
Lukashenka claimed that it is through Russia’s fault the union state has not yet been created. The union implies equal rights, equal conditions for economic subjects. And these conditions are getting more and more uneven. According to Lukashenka, currently, the Belarusian enterprises pay 200 USD for a thousand cubic metres of gas, whereas Russian enterprises pay 60 USD.
Commenting on the statements from Medvedev regarding the unified emission centre and unified customs, Lukashenka claimed that Russia offered “to create the union from the roof, and not from the basement”. Such basement, in his opinion, is the creation of equal conditions for economy subjects, i.e. supplies of oil and gas at home Russian prices and absence of barriers for Belarusian exports to Russia.
The problem is not about the logic or sequence of integration (basement-roof), but that Lukashenka does not want to integrate at Russian terms. He wants to be an absolute sovereign in Belarus and, in the meantime, get Russian donations.
In 2002-2003, there used to be the “basement” (as Lukashenka means it) of the union state: Belarus was receiving Russian gas at home market Russian prices; the Russian market was open for Belarusian export, there were no trade wars (dairy or meat) between Belarus and Russia.
The Russian leaders in 2002 suggested building the “roof” of the union state: unification of currency, with the Russian ruble as the currency in the territory of Belarus; adopting a Constitutional act of the union state that would envisage setting up supranational bodies with the prevalence of Russian representatives.
Lukashenka in return offered to keep building the “basement”. He offered the variant of unifying the currency systems in which the National Bank of Belarus would have the right to emit Russian rubles. And to stipulate in the Constitutional Act of the union state the obligations of Russia to supply energy carriers to Belarus at Russian home market prices. And now, every time when commenting or criticizing the initiatives of Russia to deepen the integration, Lukashenka claims that the Belarusian side supports the real integration within the union state. He expresses hope that the union state will be created.
Despite the growing disagreements, it is unlikely that the Kremlin and Lukashenka will stop speaking of the integration within the union state and give up the project. In the Kremlin, they hope that if not Lukashenka, then his successor will take steps towards the real integration, as the Russian side implies it, which would tight securely Belarus to Russia forever.
For Lukashenka, the special relations with Russia in connection with the formal existence of the union state – it is a convenient excuse for getting oil and gas donations from Russia in the past.6 And, what is more important, a justification to make bids for donations in future. The statements of diversification of oil supplies are nothing but attempts to blackmail Russia
Earlier, in the spans of deteriorations in relations with Russia, official representatives of Belarus were talking of the necessity to diversify oil supplies. At the background of negotiations with Russia concerning compensation of losses from the tax manoeuvre, again some statements were voiced about the intentions to get oil via ports of the Baltic states.
On May 23, meeting the Ambassador of Kazakhstan Yermukhamet Yertysbayev, Lukashenka said that he was conducting negotiations over oil supplies from Kazakhstan. “We’ve now been busy with the diversification of supplies. We are negotiating supplies of oil to Belarus from various sources.”7
If the Belarusian side had really applied to Kazakhstan, this address had been badly meditated and calculated. The Ambassador of Kazakhstan remarked that the prices of Kazakh oil for Belarus would be higher than of the Russian one. Since, it is to be delivered by railroad, whereas Russian oil gets to Belarus by oil pipeline.8
And it is unlikely that Russia will provide opportunities for such deliveries. Y.Yertysbayev remarked that for Russia it was unprofitable that Belarus got oil from Kazakhstan.9
According to information of the Russian newspaper Kommersant, Kazakhstan does not have spare volumes of oil to supply to Belarus: there is an increasing demand for Kazakh oil from the Chinese side.10
Just like the declarations over the intentions to get oil via ports of the Baltic states, to build an oil terminal in a Baltic port, the Lukashenka’s statements of the intention to get Kazakh oil will not bring practical results. The main goal of such statements – to show to Russia that Belarus has alternatives to get oil, to strengthen its standpoint in negotiations over the compensation of the losses resulting from the tax manoeuvre.
It is highly unlikely that in response to increasing US military contingent in Poland, enhancing the military capacity of Poland, Lukashenka would agree, under Russian pressure, to deploy Russian military base(s), as well as to deploy Russian military troops in Belarus. Most probably, as a responsive measure, Russia will enhance even more its contingent in the Kaliningrad enclave.
Russia does not have economic levers to induce Belarus to station here Russian military bases and troops.
Russia cannot cease oil and gas supplies to Belarus, as it is interested to have reliable and cheap transit of oil and gas and other cargoes via Belarus. The Russians buy Belarusian goods, including equipment (tractors, automobiles etc.) not out of personal favours, but because these goods have a good ratio of price and quality, they are competitive at the Russian market.
Russia has been reducing oil donations: Belarus is earning less on refinery of Russian oil. Among all, due to import phase-out and food self-provisioning, Russia is imposing restrictions on Belarusian food export. This has resulted in a slowdown in the rate of growth of the Belarusian GDP. But these measures have not led to worsening social and economic situation in Belarus.
A New Constitution for Belarus?
The statements of Lukashenka concerning amendments to the Constitution: in the next presidential term, he will be thinking of a successor. At the press conference on March 1, Lukashenka said he would bid for presidency for the sixth time. “Out of my current situation and of the country and the attitude to me, I can’t help seeking candidacy for the post of the president”.
Lukashenka claimed that he could not help running for the presidency due to the attitude (of the citizens of Belarus) to him… One cannot doubt that, just as before, the elections will be held according to the scenario of total falsification of the results. In the first run of the elections, Lukashenka will declare his victory with an overwhelming majority with around 80 per cent of voters have cast their votes for him. Such level of support Lukashenka declared on the outcome of the previous “elections”.
A certain sensation has been the statement of Lukashenka that within a period fewer than five years, a new Constitution would be adopted in Belarus. In his opinion, “it is necessary to strengthen the executive and the legislative branches of power”.
In April and in May, Lukashenka made several more statements about the necessity to work out a new Constitution. Lukashenka gave very few details. According to his words, the amendments would also touch upon the role of the president: “It is not the business of the head of state to drive across fields and factories”.
Every time, when speaking about a new Constitution, Lukashenka used the term “the head of state”, which is typical of authoritarian political systems. This means that, according to the new Constitution, the president (head of state) will have significantly larger powers that the head of the executive branch of power. He will control the legislative and judicial branches. Either directly, or through his assignees (there will be no elections) in parliament, the president will be assigned other top officials; among all, he will be assigning and controlling, and will have a possibility to change the Prime Minister and Ministers.
Obviously, Lukashenka wants to shift responsibility for the social and economic development of the country on the Prime Minister, so that the latter “drive across the fields and factories”. In case of necessity, the head of state could use him as the boy to beat. For years in power, Lukashenka has staged the performance in front of Belarusian citizens: “a good president – bad officials”. He counts that the head of state with the new Constitution will do this as well.
On March 1, Lukashenka said that the presidential elections would take place in 2020. When he is “elected” for the sixth presidential term, he will be 65, almost 66 years old.
Now Lukashenka is healthy. His press conference on March 1 lasted around seven hours.
However, he might have health issues. He suffered two microstrokes (in 1999 and in 2006). After the presidential elections on March 19, 2006, the chairperson of the Central Executive Commission Lidiya Yermoshina said that the inauguration of the president would take place on March 31. According to the official information, she mentioned the date “without complying it with the work schedule of the head of state”. The inauguration took place on April 8. It was the shortest official speech of Lukashenka. Many people paid attention that he was gasping and unhealthy. Lukashenka was supported by pills. In April – May 2006, Lukashenka did not turn up in public for more than a month and did not receive official representatives. In Belarus, rumours were spreading that he had died… By the end of the sixth presidential term, he would be 70 years old.
Probably, the statements of Lukashenka about a new Constitution were caused by the fact that he realizes: during the sixth term, he will have to define who his successor will be. Who guarantees him a calm and safe old age. The cost of a mistake might be very high. Lukashenka might spend the rest of his life behind bars, charged with abuse of power and official position, corruption, abductions-murders of the leaders of the opposition in 1999.
The political system of Belarus, defined by a new Constitution, has to be the most convenient for his successor, allow him keeping power.
The Constitution of Belarus of 1996 was written for Lukashenka. A new Constitution will be written upon Lukashenka’s order for his successor.