In response to the Russian phytosanitary regulatory authority’s decision to temporarily ban imports of Belarusian apples and pears, Belarusian President Alexander Lukashenko, ordered the closure of Europe bound Druzhba oil pipeline, citing reasons for repairs. The transit pipeline runs through Belarus with total capacity of delivering nearly 66 million tons of oil annually to countries including Germany, Poland, Ukraine, Hungary, Slovakia and the Czech Republic. The reactionary measure taken by the Belarusian President especially seen in the backdrop of issues encompassing Russia’s new tax system and the question of Belarusian sovereignty surrounding the proposed deeper integration via the Union State treaty draws attention into the direction in which Russia-Belarusian relations are heading. In this regard, it is important to look at the incidents that have become a bone of contention between the two allies, Russia’s larger strategic interest in Belarus and Minsk’s own efforts in maintaining the balance between Russia and the West. The assessment of these questions would help understand the complex nature of Russia-Belarus relations.
Recent Issues in Russia-Belarus Relations
The New Tax Maneuver
On 28 July 2018, the Federation Council – the upper house of the Federal Assembly of Russia approved two draft laws one finalizing the tax manoeuvre for the oil sector and second amending the customs duties. The new law shifts the burden on oil products from their export to extraction. To understand how this law impacts Belarus, it is important to look at the nature of oil exports from Russia to Belarus. Under the Customs Union, Belarus receives duty-free oil products from Russia, which it sells to other countries and profits from the associated charges. From Russia’s perspective, it has been subsidizing Belarusian budget through its oil products and now want to limit sales to Minsk so that it can itself profit from the sale of oil products. For doing so, Russian lawmakers introduced the new tax law which would gradually decrease oil export duties for other destinations over the course of a few years. This would enable Russian companies to sell their oil directly to countries to which Belarus currently re-exports Russian energy products.
For Minsk, the implementation of the new law is a concern as it would cut a big source of budget revenue. According to Belarusian Finance Minister Maksim Yermalovich, the new tax manoeuvre would result in a loss of about $ 293 million in 2019 alone, with an estimate of about $8-12 billion by 2024 if the two countries failed to reach a common ground. It is a big amount for the country considering its economic output is about $55 billion. So far, negotiations between the two sides have failed to produce the desired result. The Belarusian position is that the Russian government should compensate for the losses occurring due to the tax manoeuvre. Belarusian deputy Prime Minister Ihar Lyashenka argued that the demands for compensations are grounded in the Eurasian Economic Union Treaty which calls for equal conditions for member states. Lukashenko also appealed to the Russian government to repay Belarus for its losses either by lowering oil prices or via direct budgetary transfer. So far, the Russian side has linked any compensations to deeper integration with Russia under the 1999 Union treaty.
Union Treaty and the Issue of Sovereignty
Russia and Belarus signed the Treaty on the Creation of a Union State of Russia and Belarus on 8 December 1999. In theory, the treaty described a federation of the two states with a single currency, common market, a unified judiciary, flag and an emblem. The Union State would be administered by a Supreme State Council, which would be headed by the presidents of the two countries on a rotating basis. Until now Lukashenko has headed the Supreme State Council, although no real power exists in the council because the only element of the union that exists for ordinary people is a joint labour market. Deeper integration has been rooted in the debates of sovereignty over common goals, and till now Belarus has chosen its sovereignty.
However, talks on the Union State have gained significant media attention for two main reasons. First, Russian authorities strong hand in linking concessions to deeper intergration to the Union State treaty and second, debates over future of Putin and Russia post 2024. Experts have speculated that continued pressure on Belarus to agree to the Union Treaty could be among the ways by which Putin may hold power post-2024. Already a number of scenarios are being debated and one such scenario is the merger of Belarus with Russia. The argument goes, Putin could force Belarus for greater integration with Russia via the Union State treaty which would then allow Putin to become the president of the Russian-Belarusian Union State or take control over the much-strengthened Supreme State Council, retaining a large measure of power for life without changing the constitution.
In this regard, pressuring Lukashenko over oil price and compensations becomes a relatively easy option when compared to other strategies including the use of force or “Anschluss”. Russia doesn’t have to threaten to cut off gas supplies or raise energy prices or insist on a greater military presence. All Russia has to do is stick to its stance of linking any compensations to oil on greater adherence to the Union State Treaty. As it stands out, Belarus would continue to lose billions of dollars and sooner than later would agree to the terms set by Russia or face massive economic losses.
Lukashenko understands the complexity of the situation. Although Belarus has been a stalwart ally of Russia, it has adopted a policy of seeking a balance between Russia and the West. Lukashenko on numerous occasions has stated that ‘The ideal-case scenario is a balance between eastern and western directions of the Belarusian foreign policy’. Even during the early 2000s when Putin offered Belarus to join Russia, Lukashenko out of fear of losing sovereignty blocked the development of the integration process but managed to retain the highest possible level of Russian subsidies, which were important to keep the Belarusian economy afloat. For Lukashenko, challenges to Belarus and its sovereignty are also challenges to his own rule and especially after the Ukrainian incident Lukashenko has no interest in becoming a second Viktor Yanukovych – the ex-Ukrainian President who after the Maidan protest fled Ukraine and has since lived in exile in Russia.
However, the dependency of the Belarusian economy on Russia is such that it has hindered Minsk from pursuing a truly independent foreign policy in which it could perfectly balance between its foreign and economic policy interests towards both Russia and the EU. Nevertheless, Minsk has managed to balance and so far, it has allowed it to exploit the advantage of being strategically placed between Russia and the West. However, since the fallout of the Ukrainian crisis the field of manoeuvre for Minsk has limited. This is because strategic considerations in Moscow post-2014 have changed.
Strategically Important Belarus
Though one could argue about Russia’s re-emergence as a major power, citing its actions in Ukraine, as proven by Crimea or the war in eastern Ukraine, the fact of the matter remains Russia has made one of its border countries antagonistic and the rest worrisome. Russia can use the instability in Donbass as a bargaining chip for easing sanctions, but it will be stretching the imagination to say that Russia can use Donbass to bring back Ukraine under its influence. There is little chance that Moscow can enhance its position in Ukraine without resorting to military force. This leaves Russia in a state of flux. The Baltic states have already joined NATO, and Ukraine since 2014 has remained in a frozen conflict. Although Kiev has not joined NATO, the crisis has given it a strong enough reason to look west rather than east.
The necessity of maintaining a buffer on the western frontier makes Belarus an important player in Russia’s strategic calculations. Maintaining buffers on the western front is important as history provides ample examples of invasion to Russia through the North European plain starting from Charles XII of Sweden to Napoleon and Hitler, all of whom led their campaigns through Belarus. Following the disintegration of the Soviet Union, the EU and NATO have expanded considerably towards the East signing EU association agreements and holding military exercises with Moldova, Ukraine and Georgia.
For Russia, keeping Belarus in its sphere of influence gives it a chance of maintaining a viable buffer. Belarus not only borders the Russian mainland, which means it is very close to main Russian population centres most notably Moscow, but it also borders some of the most important industrial and economic regions such as Pskov, Bryansk and Smolensk to name a few. Therefore, with keeping Minsk under its influence Russia can enhance its security and project its power far beyond its current borders and deep into Central and Eastern European countries.
Belarus Resisting the Pressure
Belarus understands its geographical positioning. It also understands that it cannot completely turn away from Russia. But since the events in Ukraine, Belarus has become critical of Russia’s actions. The annexation of Crimea and the conflict in Eastern Ukraine caused great concern in Minsk about Russia’s interference in the territorial integrity of a former Soviet republic. For this reason, Minsk did not officially recognize the annexation of Crimea and neither did it support the separatist in Donbas. On the other hand, Lukashenko tried to avoid openly criticizing Russia’s conduct, instead showcasing a great deal of diplomacy by offering Minsk as the venue for holding peace talks. The Minsk agreements are the only formal attempts agreed by Ukraine, Russia, France and Germany towards resolving the conflict. Such a move helped build up the country’s image as a neutral mediator.
Moreover, in 2016 Belarus adopted a new defence doctrine that advocated the country’s policy of avoiding military conflicts and using the armed forces only on home territory in case of military conflict for the purpose of protecting Belarusian independence, territorial integrity, sovereignty and constitutional order. While Moscow expected support from Belarus when it imposed counter sanctions on goods from western countries in response to the EU and US sanctions on Russian goods, Minsk instead re-exported sanctioned EU products to Russia, labelling them as made in Belarus.
Further, in November 2018, Belarus rejected Russia’s offer of establishing a military base on Belarusian soil citing reasons that it can ensure its own security. These developments are further compounded by the fact that Belarus has pushed for increased transparency with regards to the military exercises it conducts with Russia. As part of its strategy to build trust and confidence with the west, Belarus held advance briefings and invited observers from the west to the Zapad 2017 exercises. In 2017, Belarus also granted visa-free travel for citizens of 80 states including 39 European countries. In January this year, Belarus lifted a cap on the number of U.S. diplomats to be allowed in the country.
Belarus also suggested a Partnership Priorities agreement with the European Union paving the way for greater relations between the two sides. In the meantime, Belarusian authorities are also actively involved in the Chinese Belt and Road initiative. From Minsk’s perspective, developing ties with China is a way of strengthening its international position and also serving as an important partner of China in Eastern Europe. The country is also hoping to attract Chinese investment as it is a transit point for goods transported by rail to Europe. Diversifying its foreign and economic policy to both the EU and China can be understood as an attempt to soften the country’s political and economic dependence on Russia.
Maintaining the balance
Although Belarus is making attempts at diversifying its foreign and economic policy, the fact remains that it is highly integrated with Russia in several aspects. In military terms, the two countries conduct regular large-scale joint military exercises and operate a common air defence system. Since the disintegration of the Soviet Union, the Belarusian economy has largely depended on Russian energy subsidies and investments. Russia is Belarus’ largest trading partner. Roughly, 43 per cent of Belarussian exports go to Russia while 57 per cent of its imports come from Russia. Minsk also receives nearly 70 per cent of its loans and investments from Russia. Furthermore, Belarus is a founding member of all Russian-led integration projects, for instances, the EEU (Eurasian Economic Union) and the CSTO (Collective Security Treaty Organization). Even culturally, the two countries are strongly connected. Most school children receive education in Russian except for the Belarusian language. Programs of Russian production represent nearly 80 per cent of the content of Belarusian state tv channel, ONT.
However, with that being said, the recent flare-up of tensions between the two sides is a stark reminder of how difficult it is for Belarus to maintain the balance. At present, Minsk has no viable alternative for its foreign or economic policy needs other than Russia. Although the West may be looking to enhance its engagement with Minsk, it may not want to do it at the cost of provoking a confrontation with Russia. On the other hand, Belarus does not want to make a move that would result in serious actions from Russia. Belarus would continue to do what it has been doing best, pragmatically handling its problems with Russia at the same time trying best to find alternatives.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Geopolitics.