Belarus and Russia settle dispute, but Putin has the last word

by Courtney Weaver

On Thursday, while Russian president Dmitry Medvedev, was in his element in the US, promoting Russia's Silicon Valley in sunny California, prime minister Vladimir Putin was in his - in a grimy industrial centre in Siberia.

Visiting Novokuznetsk (formerly Stalinsk), Putin took a moment to comment on the gas dispute between Belarus and Gazprom that has just been settled - and put the former Soviet republic in its place.

While sweetly remarking on Russia and Belarus's "special relations", Putin curtly reminded the small neighbour that it was paying less for Russian natural gas than any other country in the world - only $150 per thousand cubic metres until this week's dispute. He chided Belarus for not paying sooner its debt to Gazprom - the issue that precipitated the dispute and led to cuts this week in gas supplies from Russia to Belarus.

"Several times I and [Medvedev] had to remind our Belarusian partners at the highest level about the necessity of fulfilling their debt [to Gazprom] -and there was no reaction," he said.

The prime minister's words stung, especially after they came even sharper remarks from Medvedev who on Monday mocked Belarus for trying to pay its debt to Gazprom in "pies, butter, cheese [and] pancakes".

Alexander Lukashenko, president of Belarus, naturally claimed to be "humiliated" by the president's comments. But the Kremlin's cavalier take on the spat shows just how much it has Belarus economically wrapped around its finger.

Russia has a 60 per cent share of Belarus's import market and buys 30 per cent of all Belarusian exports while Belarus has just a 5 per cent of Russia's import market and buys less than 5 per cent of all Russian exports, according to the World Trade Organisation.

In exchange for Belarus's political loyalty, Russia has been selling the country cheap oil and gas, which Belarus can then refine and send to Europe. It has also been buying Belarus's exports, including $1bn in dairy products a year- no small sum, Belarus learned, when Moscow temporarily banned more than 1,000 of the country's milk products last summer.

Furious at the time, Lukashenko was finally able to come to a compromise with Medvedev. Yet in the months since he's become increasingly vocal about his frustrations with Russian-Belarusian trade and may have been looking for a space to air them.

In March Lukashenko announced that Belarus had agreed to buy up to 80,000 barrels of crude oil a day from Venezuela, a slap in the face to its traditional partner.

"[Belarus and Russia] sign serious documents, [Belarus] agrees on large-scale accords with our strategic ally [Russia], but at the same time can't secure transparent and fair terms of mutual trade," Lukashenko said at the time, state agency RIA Novosti, reported.

Perhaps Lukashenko hoped a high-profile gas dispute with Gazprom would force Russia to make a few more trade concessions. But if the recent words of Medvedev and Putin are any guide, Moscow won't be budging an inch.


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