BELARUS NEWS AND ANALYSIS

DATE:

10/01/2007

Russia struggles to sustain alliance with Belarus

Amid a worsening energy dispute with its former ally Belarus, Moscow has nonetheless pledged to sustain security ties with Minsk.

Commentary by Sergei Blagov in Moscow for ISN Security Watch (10/01/07)

The Kremlin apparently has become disillusioned with Belarus' countless pledges to create a so-called "union state" with Russia. As a result, Moscow has moved to limit preferential economic treatment of its ally. Nonetheless, Russia's top military officials still voice interest in continued military cooperation with Belarus.

Russia's deputy prime minister and defense minister Sergei Ivanov suggested that economic disagreements between his country and Belarus should not affect bilateral military cooperation. He conceded that Russia had two military facilities in Belarus, but claimed that Russia's security would not be undermined by any eventuality in Belarus.

On 6 January, Ivanov also said that an agreement on a Russia-Belarus air defense system remained ready for signing. Ivanov's statements come as an indication that the Russian military still expects continued security cooperation with Belarus, despite damage done by the energy row.

Moscow is keen to work with Minsk due to Russia's significant security interests in Belarus. The two nations signed an agreement in 1995 that allows the Russian military to use an early warning radar hub in Baranovichi, Belarus until 2020 for free.

The Baranovichi facility remains important for Russia until a new one near St Petersburg becomes fully operational next year. The Baranovichi station replaced a similar facility in Latvia. Hence, Belarus has been viewed as an important outpost in the West by the Russian military.

Russia operates similar facilities elsewhere such as an older Daryal radar facility in Azerbaijan, which it leases for US$7 million a year. Subsequently, Russia can easily afford reasonable lease payments for its military facilities in Belarus.

The Russian military also uses the Vileika communication center, designed to maintain contact with Russian submarines. However, Russia has similar centers in Novgorod and Krasnodar regions, which could be used as alternatives to the Vileika facility. Therefore, although Moscow is interested in security ties with Minsk, the Russian military has alternatives to the Belarus-based facilities if they are deemed necessary.

Meanwhile, the energy feud between Moscow and Minsk has deepened. The Kremlin insists it had the right to impose full duty on exports of Russian crude to Belarus. Russia has lost US$3.5-4 billion a year during the past five years due to its crude being exported to Belarus duty free, Russian President Vladimir Putin said during a cabinet meeting on 9 January. He also told the cabinet to discuss possible cuts of crude production by Russian oil companies following transit problems in Belarus.

Officials in Minsk insisted that Russia pay the new Belarus duties in order to funnel crude oil to Europe via the Druzhba pipeline. But Russian Economic Development and Trade Minister German Gref insisted that the new duties were "unprecedented" and illegal. Russia's top government officials also indicated that Russia viewed the situation with its oil exports via Belarus as a force majeure.

A temporary shut-down of the Druzhba pipeline system and possible cuts of Russia's crude production come as a serious blow to Russia's economic interests, as well as the country's reputation as Europe's major energy supplier. Nonetheless, Moscow apparently opted to make the move, but limit the preferential economic treatment of Belarus.

Last December, Moscow imposed a US$181-per-tonne duty on exports of Russian crude to Belarus. Until December, this crude has been supplied duty free to refineries in Belarus and then re-exported as refined products to Europe at a healthy profit. In response, on 3 January Belarus imposed a transit duty of US$45-per-tonne on Russian oil.

Belarus also became angered by Moscow's insistence on higher prices for Russian gas. Last week, Russian gas giant Gazprom forced Belarus to accept a new price of US$100-per-thousand cubic meters (tcm), up from the 2006 price of US$47 tcm.

There have been earlier disagreements on energy between Moscow and Minsk. In February 2004, Belarus reluctantly accepted Russian terms of gas supplies following a price dispute with Russian gas monopoly Gazprom.

For years, Russia's cheap energy supplies to Belarus have been instrumental in sustaining Belarus President Aleksander Lukashenko's regime although most of the pledges still remain on paper. Subsequently, the Kremlin's backing allowed Belarus to ignore Western criticism of its authoritarian stance and increase pressure on foreign charities and aid missions, the domestic opposition and independent press, religious groups and foreign media organizations.

However, the energy dispute comes as a grim reminder of Minsk's questionable reliability as Moscow's closest ally.

Sergei Blagov is a Moscow-based correspondent for ISN Security Watch.

The views and opinions expressed herein are those of the author only, not the International Relations and Security Network (ISN)

Source:

http://www.isn.ethz.ch/news/sw/details.cfm?ID=17099