BELARUS NEWS AND ANALYSIS
DATE:
13/12/2010
Friends again, for now
THE smiles were forced, but the message was clear: after a period of growing estrangement, Russia and Belarus have kissed and made up. At least for now.
Alyaksandr Lukashenka, Belarus's long-serving president, had reason to be pleased when his Russian counterpart Dmitry Medvedev shook his hand in a lavish Kremlin hall on Thursday. Russia had just agreed to drop duties on exports of crude oil to its former Soviet subject state. Subsidised Russian energy exports have long propped up Mr Lukashenka's authoritarian regime, and, even better, the news came ahead of a presidential election this Sunday (not that there was any doubt he would win). Russian officials said Belarus stands to save up to $4 billion, although experts in Minsk say the figure will be closer to $2.5 billion.
But Russia will gain, too. Minsk's practice of refining cheap Russian oil and selling it on for huge profit has long irritated the Kremlin. On Thursday, Mr Lukashenka agreed to send all the duties back to Moscow. Belarus had been holding hostage terms for the transit of Russian oil to Europe across its territory, about 20m tons a year, in talks that temporarily broke down on Wednesday.
The deal the following day removed the last major hurdle for the opening of a free-trade zone between Russia, Belarus and Kazakhstan, to be called the Common Economic Space, and set to go into effect by 2012. The three countries inaugurated a customs union this year.
Relations between Moscow and Minsk have been increasingly rocky since the Kremlin hailed Mr Lukashenka's rigged re-election four years ago. Last January, Russia briefly shut off oil supplies to Belarus over a price dispute. This week, Russian state television blamed Mr Lukashenka's "anti-Russian rhetoric" for the clash, reporting that Thursday's agreement was only made possible when he backed down.
As is often the case with Russian energy deals, this one includes complicated, murky schemes that may enable cronies of Mr Lukashenka and Mr Putin to skim off some of the profits. But the new three-way union doesn't necessarily mean Mr Lukashenka is back in the Kremlin's fold. Like many leaders of Russia's former Soviet neighbours, he has long enjoyed playing Russia off against the West. Both sides saw clear benefit in making up this time, but it is well known that Vladimir Putin, Russia's emotional supreme leader, dislikes Mr Lukashenka. Besides, the Belarusian president was courting the EU again last week. He suggested it join the new free-trade zone and call itself the "Euroasian Union."
Source:
http://www.economist.com/blogs/easternapproaches/2010/12/belarus_and_russia
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