BELARUS NEWS AND ANALYSIS

DATE:

01/11/2006

Russia and Belarus get really angry with each other

Alexander Lukashenko, the President of Belarus, is expected to visit Moscow on November 9-10 to conduct negotiations with Vladimir Putin. The relations between the two countries have been getting more and more intense during the recent months. Lukashenko intends to pull out from the Unified State of Russia and Belarus if Moscow decides to raise prices on natural gas. Furthermore, a deputy of the Belarussian parliament, Nikolai Cherginets, touched upon the subject of withdrawing Russian military presence from Belarus.

The Russian administration has recently toughened its policies with Belarus. The Kremlin intends to obtain the control shareholding of the Belarussian natural gas corporation Beltransgaz. Russia also needs to accelerate the introduction of joint currency with Belarus.

The tension in the relations between the two countries started growing soon after the presidential election which took place in Belarus in March of this year. Moscow supported Lukashenko at the election. However, as soon as the final results were summed up and the opposition gave up the fight, Russia announced that it was going to raise prices on natural gas for Belarus.

Moscow has a whole list of claims to Belarus. Alexander Lukashenko does not display any intention to meet any wishes of the Kremlin administration. One of Russia's programs stipulates the sale of control shareholding of Beltransgaz to Russia's gas giant Gazprom. It is an obligation that Belarus obtained after it received special prices for natural gas from Russia. Belarus was receiving cheap gas from Russia, but there was no sign for Gazprom to take Beltransgaz under its control. Belarus evaluates 50 percent of Beltransgaz's shares at five billion dollars, whereas Gazprom offers only $600 million. Experts are currently working on their own estimation of the cost of the shareholding. It is not ruled out that the new price will be announced during the forthcoming meeting between Putin and Lukashenko.

Another program includes various integration procedures between Russia and Belarus. Belarus wishes to purchase the Russian natural gas at Russian prices. The key problem of the economic integration between Russia and Belarus is connected with the introduction of the joint currency. Lukashenko demands Belarus should have a right to establish its own emission center which would give Minsk an opportunity to control cash flows. Furthermore, Belarus asks for a compensation for the economic damage that it will supposedly suffer because of the introduction of the Russian ruble.

As a matter of fact, Alexander Lukashenko is not interested in the economic integration. The Belarussian president seeks a certain sub-national union which he could use for his own political goals to earn the reputation of a man who unified Belarus and Russia. Lukashenko is strictly determined not to let Russia undermine the sovereignty of Belarus.

Russia needs the real economic integration which would obviously strengthen the Kremlin's political influence on Belarus. Vladimir Putin believes that the joint currency between Russia and Belarus is the most important question of the economic integration between the two countries. Putin threatened to cut the export of petroleum products to Belarus if there is still no progress in the economic integration. The head of the Committee for International Affairs and National Security of Belarussian Parliament, Nikolai Cherginets, stated that Putin's remarks had been made in the form of an ultimatum. Furthermore, the official added, Russia had declared a trade war on Belarus. "The current state of affairs gives Belarus every reason to think about taking adequate measures in return to preserve its sovereignty and economic security. Maybe Belarus should consider the question of Russia's military presence in the country," the Belarussian official said.

Lukashenko will have to find something to pay for cheap Russian gas. Russia does not intend to retreat, it is ready to put more pressure on the Belarussian economy.

Politcom

Source:

http://english.pravda.ru/russia/kremlin/01-11-2006/85326-Russia_Belarus-0