Who Loses when Minsk Halts Uranium Deal
This week Belarus fulfilled its promise to retaliate to the US sanctions. Minsk suspended an agreement with the United States to give up its 220-kilogram stockpile of enriched uranium. What are the implications of this decision?
Under the December 2010 agreement, Belarus committed to send its enriched uranium to Russia by 2012, which would return a less purified grade product. To date, only 10% of the stockpile has left Belarus. The U.S. State Department said it regretted Minsk’s decision and hoped the country would destroy its stockpile as planned. However, official Minsk may come to regret more.
First, the announcement will further hurt Belarus’ international reputation. Of course, it was already best known as an authoritarian state which rigged elections and where the KGB arrests people at will. But now Belarus can no longer claim the reputation of a peaceful and responsible state, which it has aspired to since it gave up Soviet nuclear weapons in 1996. As a reward for its 2010 commitment to remove enriched uranium, Belarus was invited to attend the 2012 nuclear security summit in South Korea. However, failure to honor its promise will isolate the country further and it will be welcome only at regional events sponsored by Russia.
Second, the announcement is helpless with regard to the sanctions to which it is responding. In December 2010, the James Martin Center for Nonproliferation Studies in Monterey estimated that only about 40 kilograms of the stockpile were weapons grade. Belarus simply lacks capacity to use its uranium to blackmail Washington.
At the same time, freezing the nuclear deal will further worsen Belarus’ relations with Washington and all the institutions where Washington leads. By backing out on the agreement, Belarus is giving up its chance of financial support support. This is highly undesirable at a time when Belarus' economy is in dire need of Western investment and loans. One enterprise after another will have to be sold to Russia at low prices.
Finally, suspending the agreement undermines Belarus’ plans for diversifying its energy supplies. Back in 2010, the United States promised to support Belarus’ efforts to design and build a safe nuclear power plant. Now Belarus will surely have to rely on Russia alone and will never become self-sufficient.
As Belarus Digest wrote in June 2010, the country's uranium could benefit Alyaksander Lukashenka if played wisely. Belarus has already enjoyed praise from the U.S. and the international community for making a responsible decision to give up the uranium last year. But even as the uranium deal was signed, the United States expressed concerns over Belarus’ human rights violations and authoritarianism.
The Joint Statement by Secretary of State Clinton and Foreign Minister Martynov in 2010 ended with the following: “Welcoming progress on these global security issues, the United States and Belarus acknowledged that enhanced respect for democracy and human rights in Belarus remains central to improving bilateral relations, and is essential to the progress of the country and its citizens. The United States hopes for substantial progress in these areas and that the December Presidential elections in Belarus meet international standards.” Clearly, Belarus did not get the message, and the United States could not even imagine the lawlessness that would follow the recent presidential elections.
The United States has limited leverage against official Minsk and Minsk's capacity to retaliate is even more limited as this week's developments show.
Belarus-Iran: Noisy Friendship Without Real Results
Belarusian State Oil Company “Belarusnafta” can no longer extract oil in Iran. According to official statements released this week the Iranian side decided that the Belarusian company had not fulfilled the contract's conditions and revoked its extraction permit. This case illustrates the nature of Belarus-Iranian relations – they are deprived of any real meaning despite all efforts by political leadership to fill them with content.
Could it be a kind of 'quid pro quo', after Belarus declared its intent to shut down the Iranian Samand cars assembly line in the country? The plant existed since 2008, but failed to organize a sustainable production of cars. Nevertheless, the project was important for the image of the Iranian company which tries to go beyond national borders and become a global player.
The Iranian regime certinly used new contacts with Belarus in its propaganda – as a demonstration of a "breakthrough to a new European market." Iranian pro-government media devoted significant attention to projects, visits and exhibitions in Minsk. The negative aspects were omitted – even the opposition Iranian media this February did not notice the statement by the Belarusian Deputy Prime Minister Semashko that the project of producing "Samand" cars in Belarus failed and the assembly line facilities may be given to another, Chinese automaker.
Iranian news agency "Fars" still vigorously writes about global success of "Iran Khodro" – the company implementing the project. Now, it exports cars to thirty countries and its production plants are located on four continents – in Syria, Venezuela, Belarus, Egypt, Senegal and Azerbaijan. "The Senegal plant procures the needs of the African market and the Belarus plant meets the demands of the Commonwealth of Independent States." At the same time Iranian media periodically discuss the possible bankruptcy of the company.
The economic effect of the Belarusian-Iranian relations is modest. Just last year the bilateral trade volume has exceeded the symbolic mark of $100 million – although this target for trade volume has been set long ago in 2004, during a visit to Minsk by then Iranian President Khatami. For the Belarusian side, however, more important is that out of approximately one hundred million dollars more than ninety million are Belarusian exports to Iran. For a nation with a chronic negative foreign trade balance it is a noticeable sum.
There are few large projects underway between Belarus and Iran. The oil extraction has been a point of pride for president Lukashenka, yet it never has had tangible economic effect. Iranian investments in Belarus materialized only in form of quite ordinary construction, logistics, and low-technology production projects.
Of course, while working with Iran, some Belarusian companies were sanctioned by the US government. However, the sanctions had a more preventive than punitive nature. In 2004, it was Belvneshpromservis, in 2011 – Beltekheksport, BelOMO and Belarusnafta were also subject to sanctions. Some experts even believe that Belarusnafta decided to voluntarily leave Iran to avoid American sanctions rather than thrown out by the Iranian government. Anyway, recently some Belarusian officials began to criticize projects with Iranian involvement.
The Iranian side, too, was not satisfied with the relationship. The current Iranian ambassador in Minsk Abdullah Hosseini said in summer 2009, "The administration system of this country [Belarus] is not too smooth (ravan), it has a peculiar bureacracy and lack of regular sea route with the Iranian side is a noticeable problem." Another problem, according to Mr. Hosseini, is that "the English language in this country is not widespread."
Of course, the Iranian ambassador always had trust in Lukashenka. In the same speech two years ago Mr. Hosseini said, "Now, taking into consideration the political situation in Belarus, it seems to me that in the five-year perspective, we will not see major changes in this country and its interests are so intertwined in a knot with Russia that it is not capable to separate its political structure from Russia."
At the same time the Belarusian regime is extremely careful in dealing with Tehran. In particular it avoids high-level military-related contacts with Iranian officials. This approach contrasts with usual policy of the Belarusian government which prioritizes military and security-related issues in its cooperation with developing countries. Despite numerous allegations, Belarus most likely never tried to sell Iran anything sensitive, as anti-aircraft S-300 systems or radars. Last time when Minsk sold Iran military equipment was in early 2000s. Then Belarus supplied several T-72 tanks. The contracts were concluded with support from Iranian reformist president Khatami. The statements on these contracts were duly filed with the UN conventional arms trade register.
Lukashenka always distanced himself from the ideological and geopolitical premises of Iranian regime, including its anti-Americanism and anti-Israeli rhetoric, especially after Ahmadinejad's came to power. Lukashenka's attitude towards Iran, as towards the developing world in general, has always been opportunistic – to work wherever possible using capacities already existing in Belarus. And the Soviet-era capacities rather limited his choice of partners. Unlike Hugo Chavez or Mahmoud Ahmadinejad the Belarusian leader has no stable ideological preferences.