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17.03.10
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Crude As Usual
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By Tom Balmforth
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As Russian Prime Minister Vladimir Putin arrived in Belarus to address the range of setbacks in Russian-Belarusian relations at a Union State summit, Belarusian President Alexander Lukashenko unexpectedly jetted off on a tour of South America, leaving his weak prime minister to deal with Putin. As a result, little was accomplished at the Union State summit in Brest, and Putin made some icy remarks about Belarus. The Belarusian government for its part denies that the timing of Lukashenko’s trip was provocative. Meanwhile some analysts suggest Lukashenko is playing his macho “Russia defiance” card, as the Belarusian presidential election campaign gets under way.
Vladimir Putin arrived in Brest yesterday for a Belarus-Russia Union State summit to smooth over ongoing confrontation in supposed “energy cooperation” between the two countries. But suddenly Belarusian President Alexander Lukashenko jetted off to Venezuela, leaving his weak Prime Minister Sergei Sidorsky to deal with Putin and meaning no breakthrough deals could be agreed in order to boost Belarus’ troubled oil relations with its old Soviet master.
Consistently tense trade relations, particularly in the oil sector, have been simmering ever since the full-on confrontation of January this year, when Moscow demanded that Minsk pay full export duty on the discounted Russian oil that it was buying and then re-exporting to the West at a profit. Little progress has been made on the notoriously sensitive subject for some time. When it was last discussed in the framework of the Union State in December negotiations dragged on for over eight hours without any progress whatsoever.
Yesterday, however, Lukashenko’s choice to boycott the session made the chance of any real headway impossible. By flying off to Venezuela, Lukashenko left a “phony prime minister” in charge, said Yaroslav Romanchuk, head of the Minsk-based Mises Center. Prime minister Sidorsky is “not a decision-maker…And of course, there couldn’t be any agreement reached. The country’s relations are at a very low level,” said Romanchuk.
Both the Russian government and the Belarusian government deny that Lukashenko’s impromptu trip to South America had any political subtext and say that the Belarusian president was actually “not scheduled” to meet Putin, RIA Novosti agency reported today.
Nonetheless, Lukashenko’s meeting yesterday with Venezuelan President Hugo Chavez in Caracas left little room for doubting that Belarus’s president was indulging in the symbolism of Russia defiance. Even if the president was not in Belarus to help diffuse the problematic oil relations with Russia, at least in Caracas he had some success. Lukashenko managed to win a pledge from his South American counterpart that Venezuela would deliver 80,000 barrels of oil to Belarus a day. But, unsurprisingly, analysts say the announcement between the antipodean heads of state has little substance.
“Technically, it is possible,” said Chirvani Abdoullaev, “but it lacks commercial sense.” Venezuelan crude oil is generally heavier than Russian, which raises basic question marks over the economic sense of transporting it all the way to Belarus. To make matters worse, Belarus is land-locked and, as such, would have to negotiate the use of a port in a neighboring country and have the oil delivered via railway or a new pipeline. “This is additional cost and if you do that then you become dependent on somebody else – maybe Latvia, Lithuania, or Poland,” said Abdoullaev. Moreover, in order refine Venezuela’s heavier crude, Belarus would have to invest substantially in upgrading its oil refineries.
So what was the Belarusian president even doing in Venezuela? “Lukashenko went to Venezuela because he has been on friendly terms with Chavez for a long time. I think he chose the timing to avoid the meeting with Putin,” said Romanchuk. Lukashenko has good reason to go to South America to buttress Belarusian business projects, said Romanchuk, but that was not the reason he chose to go at such a crucial time in Belarus-Russia relations. “Lukashenko is nervous about the future of the Customs Union and his own economy. His actions can therefore be best described as – ‘procrastination.’ He is procrastinating in order not to have to make painful decisions,” said Romanchuk. For the time being relations therefore show no sign of warming.
For all their formal ties in a Customs Union and Union State, Belarus and Russia have a range of issues they disagree on. Not least is Moscow’s continued impatience with Minsk for not recognizing the independence of the breakaway Georgian regions of South Ossetia and Abkhazia. Putin irritably brought the issue up at the session of the Union State in Brest yesterday. “We have always favored an improvement of Belarus' ties with Western countries... A positive effect has already been produced,” Vladimir Putin said sarcastically in reference to Belarus’ non-recognition of Abkhazia and South Ossetia, RIA Novosti reported.
Meanwhile, recent harassment of the opposition in Belarus suggests that the presidential campaign has already kicked off ahead of elections slated for January 2011. Minsk-based human rights group Charter ’97 yesterday reported that Belarusian police broke into their office, beat their journalists and confiscated eight computers after they published information about an opposition leader. “Just yesterday our site published the information that the leader of ‘European Belarus,’ Andrei Sannikov, will be nominated for the presidency,” Natalya Radzina, the site’s editor said in a statement on the group’s Web Site. “Today the office is ruined, journalists beaten, computers confiscated. This is both stupid and terrible. Yes, it will be harder for us to work. But we will continue our work and masked thugs with Nazi hails[sic] will not stop us,” she said.
Romanchuk said that Lukashenko’s bold trip to South America, defying none other than Putin himself, was partly designed to win over domestic support, ahead of the Belarusian presidential elections slated for January 2011. “I think Lukashenko has begun his presidential campaign. He believes that he should show to Belarusians that he is the macho person, the guy who stands up in the line of fire of the Kremlin and Putin. That’s why he ignores Putin, he only meets with Medvedev. But it’s a lousy game. The leverage is not in Lukashenko’s hands – it’s in Putin’s and the Kremlin’s hands,” said Romanchuk. |
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