The government puts off liberalization while negotiations with Russia continue
Today’s focus of the Belarusian authorities is on negotiations with Russia about economic preferences within the Customs Union and they do not intend to use the parliamentary elections as a foreign policy instrument. Preferences and direct funding, which the Belarusian authorities hope to receive as a result of negotiations with Russia within the Eurasian Union by far exceed the hypothetical benefits from the liberalization.
On June 21-22, senior government officials expressed their readiness to implement a number of joint projects with Russian investors.
As part of economic cooperation with Russia, Belarusian negotiators become more active and they not only defend their positions but also use “cautious attack” tactics. In particular, on June 21st, on the eve of the anniversary of the Great Patriotic War, Prime Minister Myasnikovich announced that Belarus was ready to buy Russian agricultural machinery manufacturer Rostselmash and merge it with Belarusian enterprise Gomselmash.
On June 22nd First Vice Premier Vladimir Semashko announced the imminent assets merger between Belarusian enterprise MAZ and Russian KamAZ. Mr. Semashko assessed MAZ market value at USD 1.1 billion, or about 30% higher than the previous valuation carried out by international experts. Clearly, these ambitious plans are in fact only a stake in the negotiations with Russia and likely to be corrected substantially. Another subject of negotiations in the near future will be amendments to the common customs tariffs on some goods in favour of Belarus and Kazakhstan in connection with Russia’s WTO accession.
Belarus’ June “offensive” on the Russian market was rather adventurous, as it was accompanied by simultaneous loss of rather important negotiating positions.
In particular, last week Belarus announced cancellation of Venezuelan oil deliveries. The economic feasibility of the project was dubious from the start, but it provided the Belarusian leadership with the necessary levers which they used to gain success in negotiations on preferential oil supplies with Russia (Deputy Prime Minister Semashko publicly confessed about this). In political terms, the closure of this project implies that Russian oil suppliers won and that Belarusian negotiating position weakened for the future.
Even more importantly, Belarusian negotiating position is compounded by the lack of clarity about the beginning of construction of the Belarusian nuclear power plant. General contract was to be signed before the end of June, but recent information implies it will take place one month later. The slowdown with this project is particularly unpleasant for President Lukashenko personally, as he has already proclaimed Belarus to become a future leader on the regional energy market. In addition, ‘no’ contract means ‘no’ loan from Russia for the NPP construction, which is equally important for the Belarusian authorities.
Therefore, there are two main trends. Firstly, Belarus attempts to move away from a passive self-defense to become more aggressive in the area of economic cooperation with Russia. Secondly, ‘frozen’ dialogue with the West trend remains unchanged.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.