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Analysis & Opinion
22.12.08 Lukashenko Doesn’t Beg. He Just Gets It
By Dmitry Babich

Despite having little to bring to the table himself, Alexander Lukashenko seems to have got most of what he wanted from negotiations on gas supply in Moscow. But the shine of this victory may not last; the global economic crisis is hitting Belarus hard, and the Kremlin may be tiring of their ally’s hard bargaining.

“There were rumors that we are coming to the Kremlin almost on our knees, that we want to beg it for something,” Belarusian President Alexander Lukashenko said before coming to Moscow on Monday. “I want to be clear about that: we are not planning to beg for anything.”

If this is true, Lukashenko is indeed a person who does not know how to ask, since his shopping list in Moscow was very impressive. The Belarusian president set himself three aims:

- if possible, to keep natural gas prices at the current level of $128 per one thousand cubic meters;
failing that, to pay $140 for every thousand cubic meters of Russian natural gas, instead of the $240 required by Gazprom and already paid by consumers in Western Europe;
- to secure the transfer of the remaining $1 billion from Russia’s loan of $2 billion to Belarus agreed in summer this year (the first $1 billion was transferred in November);
- to get a loan of 100 billion rubles ($3.5 billion) in exchange for agreeing to switch to rubles in energy deals with Russia.

The details of the achieved agreements remained unclear until the end of the day on Monday, but Kremlin spokeswoman Natalya Timakova told RIA Novosti that an agreement “on the principles of deliveries and payments” for Russian gas supplies to Belarus had been reached.

Getting all of these bargains without even asking was a genuinely Herculean task for Lukashenko, especially bearing in mind the very modest list of exchange favors which he had to offer. Beyond the diplomatic recognition of Russia’s proxy states Abkhazia and South Ossetia in Georgia, Lukashenko could provide only “enhanced cooperation” on anti-aircraft defense and the unending saga on the Union State of Russia and Belarus, which has dragged on since 1996 without any tangible results achieved.

Lukashenko made no secret of the link between loans and diplomacy, paying only lip service to the “humanitarian concerns” about the fate of South Ossetia which Moscow cites as the official reason for its recognition of this separatist state.

“Lukashenko is playing a very cunning game with Russia,” said Anatoly Lebedko, the leader of the opposition United Civic party of Belarus. “When he needs Russian gas and financial help he turns to Russia and waxes nostalgic about the Soviet Union. But he always tries to create an impression that he leaves his other options in the West open.”

In fact, just a few weeks earlier Minsk had been asking the International Monetary Fund (IMF) to give it a loan of $2 billion. The IMF refused to provide the loan, citing Minsk’s refusal to devalue its currency and to cut budget expenses. However, experts on Russian-Belarusian relations believe that this move of Lukashenko did not remain unnoticed in Moscow and Russia’s foreign policy officials were quite irritated by Lukashenko’s “multi-vector” policy.

“Lukashenko’s populism is a lot more sophisticated than some of his critics in the West believe,” said Andrei Suzdaltsev, a professor of the Higher School of Economics in Moscow who specializes in Belarusian politics. “He is an offspring of the difficulties of the transition period from Soviet communism to modern capitalism. He promises people to leave all the Soviet institutions of free health care and education in place, to somehow avoid painful economic reforms and prevent differentiation in society, pointing to Russia as the negative example of ‘oligarchic capitalism.’ But running this populist show requires money which only Russia can provide.”

Belarus, an important transit country between Russia and the EU, benefitted from the oil and gas boom in Russia in the years 2000-2008. Now it is suffering badly from the economic crisis which first hit the US and the EU, but soon revealed itself in even more acute form in Russia. Lukashenko has already had to make some unpleasant inroads into his system of social protection, including monetization of privileges for the old and disabled.

“The coming year could become a moment of truth for Lukashenko. Then we may see diplomatic recognition of South Ossetia and a lot of other things,” opposition leader Lebedko said.
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