Page 53 - bne magazine March 2017 issue

bne March 2017 Eastern Europe I 53
forecasted at 0.5% by the International Monetary Fund (IMF) and 0.9% by the World Bank.
With new IMF credits still out of reach despite active courting of the lender, Minsk’s agreement last year of a $2bn loan from the Russian-controlled Eur- asian Development and Stabilisation Fund (EDSF) was supposed to relieve the pressure. That is, until Moscow began tightening the screws in return for turn- ing on the money tap. $300mn of the third tranche of the EDSF loan agreed
in spring 2016 was withheld, ostensibly due to slow implementation of essential reforms by the Belarusian side, although straight power plays were suspected to be behind the delay. “I am starting to think that the issue is about politics – they [Russia] are afraid of losing Belarus, which is a 1,000km-long corridor,” Lukashenko said on February 7, com- menting on the tensions in general.
Sovereignty bug bear
On December 26, Lukashenko failed to attend a summit of leaders of countries in the EEU and CSTO. According to the Centre for Eastern Studies (OSW) in Warsaw, the direct cause of the snub was likely a statement published five days earlier by General Leonid Reshetnikov, the director of the Russian Institute of Strategic Studies (an advisory body
to Russian President Vladimir Putin), and a retired intelligence officer. “He unequivocally denied the distinct identity and language of the Belarusian people, and suggested that the Belaru- sian authorities have been conducting overly independent policies, thus risking the repetition of the so-called Ukrainian scenario,” the OSW said in a report. “This is the first time such a radical opin- ion about Belarus has been expressed
at such a high level in Russia, which probably reflects the views of the wider Russian elite.”
Such thinking has long been a source
of anxiety in Minsk: There are many politicians in Russia “who have imperial ambitions” and want to see Belarus as “some kind of [Russian] north-western region”, Lukashenko warned in April 2015, six months before he won his fifth consecutive presidential term since com-
ing to power in 1994. “We were and are a sovereign independent state. And we will stay this way.”
But as Russia stands its ground against the West over Ukraine, “the Kremlin expects much greater loyalty from Belarus, and will respond more assert- ively to any far-reaching expressions of independence by [Lukashenko]”, the OSW added.
For now, Minsk remains defiant in its right to pursue independent policy. “We have not breached anything here in terms of our domestic legislation,” Lukashenko said. “It’s our sovereign right. And we have not breached anything in terms of our agreements with other countries.”
Having watched East Ukraine go up in flames, Lukashenko, who does not enjoy particularly warm personal relations with Putin, is especially wary about any Russian bullying, while the EU sees Belarus as a kind of diplomatic buffer between Russia and itself. An EU delegation visited Minsk last October to discuss trade, and Belarus is showing more interest in aligning itself with technical regulations that govern the European single market. (The WTO in January also welcomed the resumption of accession talks with Belarus.)
However, the odds are stacked heavily against Belarus escaping Moscow’s orbit, so deep is its dependence on Russian trade and energy. And Westward-aimed change is also not particularly comfortable for Lukashenko. A 62-year-old former Soviet farm director, Lukashenko, like Putin, deeply misses the USSR and is reluctant to scrap old-style state support for industry and the social sector. Last year, as his government began sniffing around the IMF again, Lukashenko warned it not to “grovel” in its search for credit.
And as the strivings of Ukraine and Georgia towards EU integration show, nothing happens very fast, and can be quickly thwarted by all manner of Rus- sian intervention, including military. Fear of this is likely to run too deep in Minsk to take any chances. Lukashenko is unlikely to embrace sweeping political reforms that would enable a deeper partnership with the West, as the Ukraine crisis con- tinues to eat up any slack Moscow might once have cut Minsk as it tries to achieve growth and cement its statehood.
“It seems that since the Ukrainian revolu- tion, the Russian elite has changed their perception of Belarus, and now expect absolute loyalty and subordination to an even greater degree,” wrote the OSW. “Therefore, Moscow is reacting much more nervously to [Lukashenko’s] habit- ual attempts to find room for manoeuvre in Belarus’s foreign policy, which mainly consists of finding a counterbalance to Moscow in cooperation with the EU and the US.”
Tensions between Minsk and Moscow can be expected to escalate further this year, the OSW expects, “including open politi- cal dispute at the level of the presidents, which could lead to the collapse of the current model of relations between the two countries”.
Mark Galeotti, a visiting fellow with the European Council on Foreign Rela-
tions and director of Mayak Intelligence, wonders whether Lukashenko has decided that Russia, tied up in Ukraine and Syria and desperate for allies, will be willing to make a deal to keep an ally. “If [Lukashenko] gets away with it, this will be a useful indicator to just how confi- dent the Russians really are behind their façade of cynical bombast,” he writes in his latest column for bne IntelliNews.
Find more Eastern Europe content at www.bne.eu/eastern-europe
Selected headlines from past month:
· Fierce competition in Russian telecoms likely to lead to consolidation
· Ukrainian bank sector makes progress but still far from healthy
· STOLYPIN: Worries about Russia’s incredible shrinking foreign ministry · Londongrad frozen out of Russian IPO comeback
· Extradition net tightens around Ukrainian gas oligarch Firtash
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