Collapse of Belarusian Potash Company throws Lukashenkos family a political challenge
On July 29th, Uralkali’s Board decided to stop potash export sales through the Belarusian Potash Company.
The ultimate split between Uralkali and the Belarusian Potash Company (BPC) raises reputational and political risks for Lukashenko’s family as well as power elites around Lukashenko’s eldest son Viktor. Official response from Belarus did not follow, which implies that the ruling group had problems with making tactical and strategic choices.
The actual BPC collapse has political implications, i.e. casts a shadow on the Russo-Belarusian Commission’s negotiating capacity. The Commission was formed in May 2013 to settle potash export disputes. From Belarusian side, the negotiation process was supervised by Assistant to the President for National Security Affairs Viktor Lukashenko and KGB Chairman Valery Vakulchik. Formally, from Belarus’ side the Commission is led by "Development Bank" Chairman Sergey Rumas.
President Lukashenko specifically emphasized that his close affiliates were introduced in the Commission to raise its status following a request from Russian businessman Suleiman Kerimov. Informally, Viktor Lukashenko was responsible for the negotiations’ success while the KGB could engage in new scope of activities (there is reason to believe that since 2008 Viktor Lukashenko has largely controlled the KGB personnel policy, in particular, the new KGB Chairman Vakulchik is Viktor’s protégé).
In this context, the scandalous collapse of potash syndicate, two months after the negotiating group was appointed, appears as negotiations’ failure. Belaruskali’s public policy has not yet been identified, regardless of the falling world prices for potash fertilizers and Uralkali’s divorce from BPC. Moreover, Uralkali’s Board decision was unilateral, without consultations with the BPC. The work of the bilateral Commission and its members has been discredited.
Nevertheless, the ruling group and Belarusian potash exports supervisors need to figure out how to retain potash markets and fertilizer sales. The situation is complicated by the fact that pressure on Belarus to sell its Belaruskali shares and / or to delegate control over Belarusian export flows will increase. For instance, Uralkali’s Director General Vladislav Baumgertner said that cooperation between the two companies could resume only if Belarusian sales were made through Russian Soyuzkali.
If Belarus fails to resist this pressure, Viktor Lukahsenko’s business and political reputation will be undermined, which in turn will hurt his father’s reputation. Simultaneously, global potash prices’ fall will reduce Belaruskali’s export proceeds and will increase economic stability risks in the country, which in turn might have a negative impact on President Lukashenko’s electoral rating.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.