Contents:
Summary
Glossary
- Introduction
- Union State as a Buffer Form
- Foreign policy and foreign political infrastructure
- Draft framework of the Union State: single currency, common gas transport system and Constitutional Act
4.1. Currency union
4.2. Constitutional Act
4.3. Common gas transport system
- Other infrastructure elements: oil, trade relations, defense
5.1. Oil
5.2. Trade relations
5.3. Defense
- Conclusion. Exhaustiveness of the “transition” model
Supplement. Assessment of the development of the infrastructure of independence
Summary
This paper presents a complex analysis of the Russian-Belarusian relations within a period of 10-18 years in the key segments of this relationship (external policy, energy policy, commercial relations and security). Special emphasis is put on the role of the Union State of Russia and Belarus in these relations. Resting on the concept of “buffer structures” and “infrastructure of independence”, the author makes the following conclusions: (1) behind the screen of “integration” efforts, countries complete sovereignization processes and isolate their economic complexes; (2) development of national infrastructures is uneven, as the external political infrastructure of Belarus is developing faster than its energy or defense infrastructure; (3) need to imitate association processes (”integration”) will remain until the formation of the sovereign infrastructure has been completed in its key segments; (4) since Russia has had to extend the timeframe of its infrastructure projects because of the financial crisis, the Belarusian administration has been granted additional time to design and build its own infrastructure, which it will have to use with maximum efficiency; (5) at the same time, the current state of the infrastructure of independence considerably narrows the room for maneuver for the ruling class in the context of interstate relations, that is, specifically, it prevents expediting integration into Eastern Europe in the short run and, on a broader scale, enhancing the European component of its policy (while the foreign political infrastructure is sufficiently developed to facilitate this turn). The “peg” to Russia will therefore remain the dominating component of the Belarusian policy in the short and mid terms.
Glossary
Buffer forms (structures) – specific Post-Soviet inter- or supranational associations operating as substitutes for analogous western institutions (the Collective Security Treaty Organization (CSTO) is the post-Soviet counterpart of NATO) or without any western equals (the Union State of Russia and Belarus). At the same time, they appear to be direct opposites of integrating inter- and supranational bodies, as they owe their emergence not to their common future, but to their shared past – undivided property and undistributed areas of responsibility, etc. The chief function of Belarus is to compensate for the deficit of state institutions and, more broadly, of sovereign infrastructures (“buffering”).
Buffering – (1) in the strict sense, mitigation of controversial points (property, areas of responsibility) most frequently through postponements, or replacement with other, less sensitive issues; (2) “alleviation” of the impact of global processes on Postsoveticum countries, including competition on global markets, political democratization, etc.
Sovereignization (emancipation) – the process of building up national-state institutions that is not regulated by external channels directly, primarily by the echelons of the virtual imperial center.
Infrastructure of independence – a complex of institutional, politico-economic and social entities and relatively stable relations between them, which maintains the operation of an independent or sovereign state. This encompasses border and commercial infrastructures, defense and energy security infrastructures, etc.
1. Introduction
Russia is the basic economic and political partner of Belarus, and, therefore, Belarus’ relations with Russia play a fundamental role in its efforts to build up its independence. At the same time, the “special relationship” between the two countries (or the relations within the framework of the Union State of Russia and Belarus), which many experts believe to be the key reason why Belarus has managed to maintain its impressive economic expansion and sustain its specific rights in the system of international relations over the past 15-17 years, has been virtually unexplored.
The current state of things in the exploratory segment of the post-Soviet “union” and “allied” relations may be partially attributed to the relatively late establishment of Belarus as an international entity, and, partially, to the dominant settings of the “transition” approaches in political science, which were largely employed when explaining the processes taking place in the former Soviet Union. The post-Soviet space itself was very rarely problematized in terms of the sovereignization (or emancipation) of the states making part of it, or proto-states (that is, “weak” states), in other words, they were most frequently analyzed as traces of processes taking place in Russia. The approaches applied in the post-colonial paradigm most commonly fail to provide answers to a broad range of issues pertaining to the Russian-Belarusian relations.
2. Union State as a Buffer Form
The author selected the concept of buffer forms suggested by Anatoly Pankovski as the theoretic and methodological framework for this paper. “The Postsoveticum is not the hollowness that emerged on the ruins of the imperial complex, not just a space governed by some inertial forces,” Pankovski writes. “It is rather a totality of spaces – structures and “conjugated” fields (more precisely, platforms) – that have their own procedural logics and are marked by complex interrelations. We shall call these structures buffer forms, since the Postsoveticum is, inter alia, a sort of collective screen mediating between the global processes or “challenges”, as they are more commonly known here, and “glocal responses”[1].
The author’s task is to specify the concept of buffer forms as applied to the “special relationship” between Russia and Belarus, which was formally defined in the Union State Establishment Treaty of 1999.
A. Pankovski applies the notion “buffer forms” to all post-Soviet associations – the Union State of Russia and Belarus, CIS, EurAsEC and CSTO, interpreting them as specific inter- or supranational structures, which, as was mentioned above, act as a screen protecting them from global processes (for instance, from the effects of free trade rules, by way of developing a specific post-Soviet economic world) and, not less importantly, “buffer” the interrelations between newly independent states through compensation for occurring “sovereignty deficits” (for instance, by maintaining Belarus’ energy security or supporting Russian military-strategic endeavor[2]).
A crucial aspect in the use of the research strategy of post-Soviet “buffering” is its aiming at splitting the layers of formal and informal rules on the one hand, and the hidden practical logic underlying the relevant structure. For instance, the CIS is an authority taking over the symbolic capital of the USSR that originally performed the compensatory function, which is primarily connected with the need to preserve the “mediatory” center, without which all symbolic and physical exchanges were deemed unthinkable[3]. “The CIS Treaty is a sort of a deal on delimitation of spheres of influence and areas of ownership, fixing a definite balance of forces between direct competitors.[4]” What is most important is that the CIS is an institution, through which post-Soviet regimes seek “external” legitimization (especially when it comes to results of parliamentary and presidential elections) amid a deficit of recognition by the international community. Formally, this mission was assigned to the nongovernmental Elections Monitoring Organization (CIS/EMO). Finally, it is no coincidence that declarations about a “CIS crisis” appeared after a series of color revolutions, when Georgia, Ukraine, and, most recently, Moldova, conducted elections in compliance with the rules of the “European choice” and the prosthetic legitimization center of the CIS was no longer needed.
The general procedural logic of the emergence and disintegration of buffer forms is as follows. Initially, relatively autonomous institutions of national authority appear and consolidate within the imperial complex. Yaroslav Shimov believes the empire is not only a repressive authority, as it makes possible the formation of national-state institutions. An indirect proof of this is found in Michael Urban’s “An Algebra of Soviet Power. Elite circulation in the Belorussian Republic 1966-1988”[5]. Urban proves that starting from some moment, the process of recruitment of elites in the BSSR continued autonomously from Moscow, that is, the central authority.
Therefore, the point of the disintegration of the empire marks a logical continuation of the autonomization process rather than its beginning. At the same time, this point, this moment in history does not mark the end of the imperial complex, which had a series of renaissances ahead of it, taking the form of the integration, or, more specifically, a campaign to step up the operation of buffer forms, such as the CIS or the Union State of Russia and Belarus.
On the one hand, having nominal and morphological (constitution, parliament, national currency, area, population, etc.) features of sovereignty is not sufficient, because a state needs to be recognized “from the outside”. On the other hand, it is necessary to address, by some means or other, the issues of ownerless property or property in dispute in a situation when there is no more union-owned property – and buffer structures are indispensable here, as they place a moratorium on sensitive issues, such as borders and communications, military installations (for instance, Sevastopol), space flights, ethnic minorities, etc. Furthermore, interstate formations perform the role of a “no-man’s country”, or a neutral area to negotiate points at issue. “Buffering” of sensitive matters is an essential point, as we can observe the results of the alternative scenario of the divorce – with no intermediaries – in the dramatic break-up of Yugoslavia. It is important to make it clear that current trade wars appear to represent a relatively smooth scenario of developments, and, therefore, the buffer forms of the Postsoveticum worked quite fine.
The hypothesis of buffer forms offers a new perspective to look at “interstate” relations within the Postsoveticum, a chance to see the common sense in the interactions that are often thought of as senseless, finally, it has a forecasting potential in the study of the process of secularization of the former Soviet Union republics. In this context, the following question would be logical: how long will the Union State and other post-Soviet integration entities last? The answer is that they will survive exactly as long as the newly independent states will require to form infrastructures of independence. The process of dismantling the imperial complex (disintegration of buffer forms) is, therefore, inversely proportional to the process of formation of infrastructures of independence.
In a first approximation, we will apply the term “infrastructure of independence” to a complex of factors (from defense to communications, finance and energy policy) ensuring the capability of the state to pursue a relatively independent policy (i.e., for instance, vote in the United Nations or cooperate with European countries the way the country will profit more, not the way its more powerful allies want it). Apparently, in a contemporary world, the “infrastructure of independence” (as independence itself) is quite a disputable phenomenon, and in absolute sense, this notion is not applicable. Nevertheless, by the independence criteria, countries can be compared with each other, moreover, we can compare one country with itself in a different period of time. For example, it is evident that if Belarus received energy from a few key suppliers instead of a single supplier, as is the case now, it would have more bargaining chips in the matter of energy supplies. Or, if Russia possessed its own borders, it would require post-Soviet organizations to a much lesser degree[6].
3. Foreign policy and foreign political infrastructure
Belarus was formally entitled to engage in foreign political activities in 1944, when the Supreme Council of the USSR adopted the law “On vesting union republics with the authority in the sphere of external relations” with a view to having “multiple representation” of the USSR internationally. However, the USSR only succeeded in having Belarus and Ukraine among the United Nations founding nations. According to Vladimir Snapkovski, “Belarusian diplomacy did not pursue an independent foreign policy in the United Nations or other international organizations during the existence of the USSR. It was a shadow of USSR delegations implementing the tactical moves of the Kremlin. The Belarusian republic did not have diplomatic relations with any country of the world, although there were proposals from the United Kingdom and the United States to exchange diplomatic offices in the late 1940s and early 1950s. The Soviet government turned them down, though.”[7]
Therefore, despite its role as a founder of the United Nations and its own Foreign Ministry, established in 1946, that is, despite having basic foreign political institutions, Belarus had been deprived of any chance to carry out an independent foreign policy until its independence in 1991. But even in its new status, the country pursued its foreign political strategy in the wake of the Russian foreign political efforts for year, primarily because of the lack of necessary infrastructure, which had to be created from scratch.
In the context of a country’s foreign policy, infrastructure factors presuppose the existence of a regulatory framework, well-established system to train diplomats, a system of foreign embassies, representative offices of the country abroad, and finally, streamlined communications and experience in dealing with international affairs.
It is no mere chance that in all the three “union” treaties between Belarus and Russia there was a special article stipulating that “each citizen of a member-state is entitled to protection in the territory of a third state, where there is no representation of the member-state, by diplomatic representations or consular institutions of the other member-state on the same terms with the citizens of that second -state (article 15 of the Union State Treaty in its 1999 version). Since Russia inherited the entire diplomatic infrastructure of the USSR, that article says that each Belarusian, as a “citizen” of the Union State[8], is entitled to use the service of Russian diplomatic representations.
In December 1991, the first foreign minister of independent Belarus, Petr Kravchenko, sent a letter to Russian and Ukrainian counterparts suggesting “accrediting a single person as an Envoy of the RSFSR, Ukraine and Belarus, and, concurrently, of the entire CIS, with all concerned CIS member-states giving their credentials to that person.”[9] This excerpt makes it clear what independence is worth without a relevant infrastructure. Another noteworthy fact is that one of the first controversies (even prior to the partition of armed forces, transport, etc.) was the dispute over foreign property of the USSR, specifically, real property, or diplomatic missions. Russia won that dispute then[10].
Some diplomats recollect that many of the first diplomatic missions of official Minsk were located in the territory of Russian embassies. Belarus initially leased office facilities from Russia in Germany, Austria, Bulgaria and France. Services (for instance, simultaneous translation from/to Russian) were also frequently procured from Russians.
Obviously, under the circumstances, working out and pursuing an independent foreign political strategy would be unwarranted credit, therefore the declared “multi-vector” policy represented nothing but following in the footsteps of Russian diplomatic missions and foreign visits with a view to selling a few tractors. The image of Alexander Lukashenko as a Russian envoy responsible for questionable dealings (namely, supplies of arms and equipment to Arab and Asian countries) is a logical result of the 1990s and the early 2000s.
In the late 1990s, Belarus’ tilt towards the east to the prejudice of the western direction became so pronounced that Lukashenko declared a “multi-vector” foreign policy in an attempt to balance the situation. This resulted in a step up in relations with Asian, African and Latin American countries and Belarus’ accession to the Non-Aligned Movement in 1998. In 1999, Belarus put forward a concept to build up a “belt of neighborliness” around the country, but all attempts to improve or normalize the relations with Poland, the Baltic States, the European Union and the United States were unsuccessful.
Amid the failures of the “multi-vector” external policy, Belarus in August 2002 put forth the concept of “pivot states”, which focused on the development of cooperation with regional leaders, which could promote Belarusian interests in relevant regions. However, that strategy was off the map soon enough. In late 2003, the day after the ruling party won the parliamentary election in Russia, Lukashenko once again instructed the government to start a dialogue with the United States and the European Union in order to gradually normalize Belarus’ relations with the west (naturally, on condition the west stays away from Belarusian internal dealings), which, nevertheless, did not have any tangible results.
The deficit of infrastructure, therefore, calls for “integration”, in one way or another, that is, prompts the use of someone else’s, or, better still, no-man’s (buffer) infrastructure, whereas the availability of infrastructure facilitates the buildup of independence and self-sufficiency. In the meantime, the positive dynamics in the development of the foreign political infrastructure (see Table 1) does not necessarily mean immediate results, although it does contribute to the development of an independent external political course. Therefore, the various business projects Belarus implemented in a broad international arena – from China and Iraq to Venezuela – as well as the demonstrative accession to the Non-Aligned Movement, do not change anything in the overall picture, in which the defining element is the foreign political “peg” to Russia.
Table 1. Dynamics of the development of foreign political infrastructure
|
|
1994-1996 |
2000 |
2009 |
|
Countries with which Belarus maintains diplomatic relations |
102 |
125 |
164 |
|
Foreign representations in Minsk (countries + international organizations) |
n/a |
40+9 |
64+13 |
|
Belarusian embassies in countries of the world / diplomatic missions |
14 |
41+5 |
45+20 |
|
Permanent missions to international organizations |
n/a |
1 |
7 |
|
International treaties |
n/a |
1,790 |
3,000 |
Source: author’s own calculations based on Foreign Ministry’s data, some publications of the Journal of International Law and International Relations
Belarus and Russia annually adopt programs of concerted actions in external policy envisaging collaboration in international organizations, to which both Belarus and Russia are members. Russia offers Belarus its foreign political support in the international institutions, in which Belarus is not represented, for instance, the Council of Europe. Minsk, for its part, backs Moscow’s essential foreign political initiatives[11].
The year 2008 saw a turning point in the foreign political relations between Belarus and Russia, when, following the dramatic events in the Caucasus in August 2008, Russian Ambassador to Belarus Alexander Surikov accused the Belarusian administration of dodging its union duty to support Moscow in the Caucasus. Lukashenko’s reaction was immediate: on the very same day, August 12, he ordered Foreign Minister Sergei Martynov to improve Belarusian relations with the EU and the U.S. as soon as possible. The hasty attempt of the Belarusian leader to establish a dialogue with Europe was a response to extraordinary events.
This does not mean Russia loses its role as a "super-determining" factor of the Belarusian foreign policy, as even the two fundamentals, that is (1) the sufficient development of external political infrastructure and (2) awareness of the country’s own foreign political interests, do not suffice to implement a full-scale foreign political strategy. The main reason for this is that Belarus’ dependence on Russia in ensuring its economic and military security is very strong, because the infrastructure of independence is simultaneously the infrastructure of security.
4 Draft framework of the Union State: single currency, common gas transport system and Constitutional Act
In the case of the foreign political infrastructure, we deal with a lengthy process of carving it out of the union vagueness, whereas in the case of the financial system, gas transport system and regulatory framework we come across a reverse flow, because by agreement between former Soviet republics those segments came under the jurisdiction of the national governments. Therefore, the formal side of the integration process was represented by the unification of the monetary systems, the regulatory framework and the gas transport system, while the genuine essence of the process was the nationalization of those segments.
The evolution of the three fundamental projects of the Union State – the single currency, the Constitutional Act and the common gas transport system – had a quite clear cyclic structure. After the talks about yet another version of the Constitutional Act would reach an impasse, the allies would take on the project of the common gas transport system, which would be discussed until what seemed another dead failure, and then the currency union would take over. That cycle was reproduced a few times. The question is why the cyclical scheme crashed during the gas transport phase. We believe the right answer is as follows: if the conceptual problem of the Constitutional Act and the currency union was the concentration of power, the “integration” of the gas transport system implied a distribution of property rights, that is, a division of infrastructure. In other words, while the first two projects contradicted the objective tendencies of isolation of economic complexes and political systems of the newly independent states, the last one fit in the general tendency one way or another.
4.1. Currency union
During the Kebich era, the idea of the Russian-Belarusian monetary union took the form of a “ruble zone”, and Lukashenko took up that idea later. It is hard to say now whether the Belarusian authorities regarded the currency union as a realistic project. Even the plan to peg the national currency to the Russian ruble had a positive effect building up trust in the sovereign currency, i.e. the Belarusian ruble.
Despite the fact that the Belarusian “hare” [depicted on the first sovereign banknotes] became one of the first symbols of the independence, it was also the most unstable attribute: in the first few years of sovereignty, both inflation and dollarization were colossal. Since the national currency is a basic indicator of the public opinion regarding the stability of the socio-political system, the autonomy of the printing press contained one of the main potential threats to the newly independent state. The practical sense of the currency union project for Belarus was therefore twofold: on the one hand, the union formed a positive horizon of expectations in the form of political guarantees that Russia offered the national administration of Belarus; on the other, the country expected economic support, especially real loans to stabilize the national currency[12].
The Union State Treaty of 1999, just like its two prior versions, provides for the formation of the “common economic space”, envisages step-by-step introduction of a single currency of the Union with a single money-printing center. The Treaty also presupposes a unification of economic regulations, a uniform price-formation policy, harmonization of bank supervision rules, common regulatory framework in service and repayment of the foreign and internal debts, foreign borrowing procedures and unified regulation of foreign investments.
We cannot say that these provisions of the Union State Treaty are not fulfilled at all, but Russia and Belarus meet the requirements stipulated in the Treaty on their way into the global economic system, although they are moving there not together, but on parallel tracks.
The key moot points include: (1) definition of the status of the money-printing center; (2) competence of the National Bank of Belarus in the currency union; (3) competence of the Belarusian government regarding the National Bank.
It is noteworthy that during the years it took to design a currency union with Russia, apart from general benefits for the financial system and stabilization of the national currency, the National Bank of Belarus managed to make use of relevant provisions of the 1999 Treaty and Agreement on the introduction of the single currency in order to gain a relative autonomy from the Belarusian government and further consolidate the banking system as a whole by withdrawing it from the zone of the government’s arbitrariness. The third point at issue was thus resolved in course of time, that is, the powers of the government vis-à-vis the National Bank were eventually substantially reduced[13]. This did not push Belarus any closer to the currency union, though. Rather, it was the other way round – because of those developments, the currency union received a very powerful adversary, because the National Bank acquired its own bargaining chips, and, consequently, its own investments, possible benefits and losses.
During his meeting with Vladimir Putin in Sochi in 2005, President Alexander Lukashenko very clearly outlined the position of the Belarusian side on the currency union: first the Constitutional Act, then the union currency. This sequence seems quite reasonable: the issue of location/accountability of the money-printing center is essentially the question of power, and therefore it cannot be resolved until the political and institutional infrastructure of the Union State has been clearly defined.
As soon as Dmitry Medvedev was elected president, the single currency project sank into oblivion. The new Russian president came to power with a more ambitious project of making the Russian ruble a regional reserve currency. Since then Belarus has been getting loans not for the currency union project, but against the pledge of changing to the Russian ruble in mutual trade. This way, “union” accents in the monetary relations were successfully replaced with national and regional accents, and, therefore, the buffer form of the Union State had exhausted its potential in that area, although possibilities of a relapse should not be ruled out.
4.2. Constitutional Act
The Treaty adopted in 1999 envisages in article 62 the development of the Constitutional Act of the Union State, a document determining the structure of the Union State and its legal system. Experts started drafting the Constitutional Act immediately after the Union State Treaty was passed, and the text of the document caused numerous conflicts and disagreements. It was the maneuvers during the preparation of the Constitutional Act that provoked Putin’s notorious remark that “flies should be separated from cutlets”: in the summer of 2002, Alexander Lukashenko suggested that his Russian counterpart should sign one of the discarded original versions of the Act instead of a later version, worked out by a Belarusian-Russian commission and coordinated with the Russian side.
Later, in 2003, after the Supreme State Council of the Union State officially decided to approve the Constitutional Act drafted by the joint Belarusian-Russian commission, the chairman of the Supreme State Council, Alexander Lukashenko, set up an alternative, purely Belarusian, commission led by Grigory Vasilevich, which hastily prepared the national version of the Constitutional Act. The Russian side had to turn it down and request a major revision.
The situation with various versions of the Constitutional Act – joint and national Belarusian – repeated a few times.
However, starting from 2004-2005, a mixed commission with constantly changing composition (caused by staff reshuffles in the administration and parliaments of the two countries) has been working on the 1% “remainder”, as 99% of the documents “is almost ready”. And again, the infamous 1% slack causes an insoluble problem, because the matter now concerns the status, competence and functions of the union authorities vis-à-vis the national authorities, government of the Union State and the problems of its international status.
These matters of principle remain unresolved even now, and for reasons very well known, no solution will be found. Still we will name these reasons:
1) All the options with “weak” supranational authorities (that is, with “complete preservation of sovereignty and independence”, on which President Lukashenko used to insist once in a while) discriminate against Russia. Economically, because the “satellite” economy that is located inside the parent economy and is well taken care of with the help of protectionist barriers (because “weak” union structures cannot insist on unifying the economic environments) has serious advantages. Politically, because a key difference between Belarus and Russia is the absence of a mechanism to replace the top executive, and, therefore, there are hardly any changes within the governing class. It turns out that Russians will have to be represented in the supreme agencies of the Union State by “rookies”, as opposed to experienced Belarusian “top guns”, who will use their bureaucratic competences to shape favorable decision-making.
2) All options with “strong” supranational authorities (such as Brussels and “higher”) are detrimental to Minsk. Politically, because any upgrade in Belarusian institutions and practices to the “Union model” undermines the fundamental principles of the regime, the key one being absolute unaccountability to external centers. In this connection, we can recollect that Minsk had been unwilling to ratify the Convention on democratic standards of elections and voters’ rights of the CIS (developed at the instance of official Minsk as an alternative to analogous documents of the OSCE) for very long, until August 5, 2008[14].
The reasons mentioned above are sufficient to keep the Constitutional Act in a cold storage long enough; whereas Russia seeks unification of the regulatory framework, rules of the operation and technical cooperation between the key elements of the “buffer” (unsegmented) infrastructure in the framework of multilateral interstate associations that by definition have more members than the Union State, namely, the Common Economic Area (of Russia, Belarus and Kazakhstan), the Collective Security Treaty Organization, and the Eurasian Economic Community.
4.3. Common gas transport system
During the first years of their independence, many newly independent states came across serious problems with payments for Russian natural gas supplies. For the Belarusian administration, the search for relatively low energy prices and favorable terms of supplies became one of the key tasks. Oil and gas deliveries formed the pillar of the Belarusian integration efforts, whereas the stability and security of energy transit to Europe has always been a priority for Russia.
The project of a “united energy system” was part of all the versions of the Union Treaty, including the last one (article 29). The mission to establish a single gas transport system was stipulated in a separate agreement in April 2002, when Belarus undertook to set up a joint venture between Beltransgaz and Russian gas giant Gazprom by July 1, 2003, whereas Gazprom pledged to supply natural gas to Belarus at prices that Russian domestic consumers used to pay. Russia started supplying gas to Belarus at agreed prices in May 2002, but the joint venture was created only at the end of 2003, which led Gazprom to accuse Belarus of abrogating the agreement unilaterally and refuse to continue supplying natural gas to Belarus at Russian domestic prices. In response, Belarus refused to ink the contract with Gazprom for gas supplies for the year 2004, as it stipulated new prices (USD 50 per 1,000 cubic meters). As a result, the contract was not signed, and Gazprom did not deliver natural gas to Belarus in the period January 1, 2004 through June 9, 2004. Independent Russian suppliers Itera, Transnafta and Sibur met Belarus’ domestic requirement under short-term contract (up to 10-12 days). On June 9, 2004, Belarus agreed to buy gas at new prices (USD 46.68 per 1,000 cubic meters), and Gazprom resumed supplies.
During that unlucky period, on February 17, 2004, Belarus for the first time interrupted Russian gas transit to Europe. At that time, Belarus had no contracts for gas supplies, and Gazprom used the opportunity to (1) force Belarus to agree to its rates; (2) demonstrate the unreliability of transit countries to European partners; (3) create a favorable PR environment to promote the Baltic Sea gas pipeline project.
It should be noted that since the moment of the USSR disintegration, Russia has encountered high costs of energy transport – the key export commodity and pillar of the Russian budget. It was only natural that the Russian administration and industrial lobby started developing projects to transit energy resources bypassing the traditional transit countries. Those efforts resulted in two gas transport projects – Nord Stream and South Stream, and two oil transport projects – BTS and ESPO.
Nevertheless, Belarus alongside Ukraine remains a key country for Russian natural gas transit to Europe.
Belarus operates two gas transport systems to export gas: (1) The system of gas-main pipelines run by OAO Beltransgaz has a combined annual capacity of up to 50 billion cubic meters, with a 650-kilometer Torzhok-Minsk-Ivatsevichi being the key gas-main; (2) Yamal-Europe gas pipeline (575 kilometers) owned by OAO Gazprom has an annual capacity of 33 billion cubic meters. Prior to the launch of Yamal-Europe, Beltransgaz gradually increased its gas transit by the Torzhok-Minsk-Ivatsevichi pipeline to the Polish border, however, the pipe never reached its design capacity. Moreover, after the commissioning of Yamal-Europe, transit by Beltransgaz pipelines decreased significantly.
Therefore, Yamal-Europe in a sense competes with Torzhok-Minsk-Ivatsevichi, however, unlike the latter, it is fully controlled by OAO Gazprom.
Table 2. Gas transit through Belarus
|
|
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009* |
|
Volume of natural gas transport, billion cubic meters |
41.6 |
41.9 |
45.1 |
49.0 |
55 |
60.9 |
64 |
64.2 |
70.5 |
65 |
|
including transit, billion cubic meters |
24.5 |
24.6 |
27.5 |
33.1 |
35.3 |
40.8 |
44 |
48.9 |
51.4 |
43.1 |
|
By Beltransgaz pipeline system |
24.5 |
24.6 |
9 |
13.1 |
11.8 |
16.8 |
14.5 |
16.9 |
18.5 |
11 |
|
By Yamal-Europe gas-main |
|
|
18.5 |
21 |
23.5 |
24 |
29.5 |
32 |
32.8 |
32.8 |
Source: author’s own calculations based on reports by Prime-Tass, Interfax and BelTA news services.
Note: * - forecast
The completion of the construction of Yamal-Europe and liquidation of all connecting elements between that pipeline and the Beltransgaz system provided Russian negotiators with a few more bargaining chips. As a result, the gas contract for 2007-2010 (a) pegs the gas price for Belarus to the price for European consumers; (b) stipulates a gradual increase of the price toward the “European” rate by way of changing the discount rate for Belarus; and (c) envisages a sale of 50% in Beltransgaz in equal shares during the period of the contract.
The long-term contract with Belarus similar in its structure and spirit to those Gazprom had signed with Western and Central Europe enables Gazprom to achieve the objectives that Russia has been trying to attain in the framework of union agreements without any success. Specifically, this is true for Russia’s efforts to acquire gas transport networks in Belarus: the project to set up a joint gas transport venture based on OAO Beltransgaz, which had been stonewalled for years in the scope of the union agreement inked in 2002 became a reality as part of a commercial contract with Gazprom signed in 2006. The Belarusian side was eager to cede the state monopoly in the gas transport sector for the sake of paying less for natural gas in the coming years.
The contract to sell a 50% shareholding in Beltransgaz for USD 2.5 billion was signed between the State Property Committee and OAO Gazprom on May 18, 2007. In the period 2007 through 2010, Gazprom paid USD 625 million annually for 12.5% shareholdings in the Belarusian gas transport monopoly; its share in Beltransgaz now stands at 50%.
Gas transport cooperation will definitely be withdrawn from the framework of the Union State once and for all as Gazprom completes building up its gas transport network (parity ownership of OAO Beltransgaz and construction of Nord Stream).
The experience of gas transport cooperation shows that Russia – largely owing to a bigger “pile” of bargaining chips (Gazprom is the monopoly gas supplier to Belarus, whose access to alternative energy resources is virtually nonexistent, while natural gas accounts for most of the total energy consumption[15]) – has been much more successful in forming its infrastructure of independence in energy transit than Belarus.
The Belarusian side used to have good chances of reversing the situation and consolidating its infrastructure of energy security, however, success would have been possible only as long as Belarus had gone “all in” and sacrificed its socioeconomic model, its “sacred cow”. This did not happen, though, and the country never took up the innovation path.
Over the years of its union relations, Belarus has made substantial progress in only one area – it managed to seriously reduce the energy intensity of GDP (see Diagram 1). As for energy security as a whole, it remains one of the most vulnerable components of the infrastructure of independence. Amid the insufficiency of its own fuel and energy resources, Belarus imports energy virtually from a single supplier – Russia. The energy intensity of the national economy remains high, and so does the share of natural gas in the balance of energy consumption. Also high is the degree of capital consumption in the fuel and energy complex[16]. It was only the loss of hopes of getting back to Russian domestic prices that forced Minsk to step up its efforts to diversity imports of conventional energy resources and change to renewable energy sources. The progress in both areas has been very modest so far.
Diagram 1. GDP energy intensity dynamics
Blue – GDP
Red – GDP energy intensity
Brown – Fuel and energy resources
Source: Stanislav Chernousov, “GDP energy intensity as a mirror of economic development // Director Magazine, #8, 2004: http://www.director.by/cgi-bin/article.cgi?date=2004/08/30&name=02
5. Other infrastructure elements: oil, trade relations, defense
5.1. Oil
Unlike the gas sector, the oil industry was demonopolized and privatized in Russia back in the early 1990s, which is why the matters of oil prices, volumes of supply and terms of delivery to Belarus for further processing by the two Belarusian oil refineries called for more sophisticated mechanisms of agreement that could not fit in the framework of the Union State.
Interstate cooperation between Belarus and Russia in the oil transport sector goes along two lines: (1) transit of Russian oil through Belarus; (2) supplies of Russian crude oil to the Belarusian refineries to meet the domestic oil product requirement (4-5 million tonnes) and export refined oil.
All oil supplies to and transit through Belarus are by the Druzhba pipeline system, which is part of the Russian (Soviet) pipeline network. The elements of the Druzhba system of oil-trunk pipelines located in Belarus remains a crucial transit corridor for export of Russian oil.
A reasonable tariff policy, efficient manipulations with export duties, interaction with Russian oil majors and advantageous geographic position combined with the special status of Belarus as a member of buffer structures are the factors that enabled Belarus to raise the volumes of oil processing and transit, increase the significance of the Belarusian routes in the Russian export oil flow to 45% in 2004 from 28% in 1999, whereas deliveries to the Belarusian oil refineries almost doubled to 18.5 million tonnes in 2004 from 10 million tonnes in 1998.
Table 3. Dynamics of the operation of the Belarusian oil sector, 2001-2008
|
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
|
Transport (millions of tonnes) |
98.9 |
93.45 |
100.7
|
103.7
|
106.81 |
98.282 |
89.27
|
85.1 |
|
Transit, including |
85.1 |
74.2 |
84.2 |
84.2 |
87.7 |
78.7 |
72 |
63.6 |
|
Gomeltransneft Druzhba |
70.9 |
70.1 |
72 |
71.3 |
72.9 |
70.9 |
72
|
63.6 |
|
Novopolotsk Druzhba |
14.2 |
4.1 |
12.2 |
12.9 |
14.8 |
7.9 |
0 |
0 |
|
Imports from Russia |
11.9 |
13.9 |
14.7 |
17.7 |
19.2 |
20.9 |
20.0 |
21.5 |
|
Processing, including by |
13.27 |
15.2 |
15.6 |
18.533
|
19.714 |
21.542 |
21.363 |
21.342 |
|
Mozyr NPZ |
6.021 |
7.5 |
7.5 |
9.399 |
9.476 |
10.763 |
10.671 |
10.4 |
|
Naftan |
7.249 |
7.7 |
8.1 |
8.585 |
8.649 |
10.779 |
10.692 |
10.92 |
|
Production of oil, millions of tonnes |
|
1.84 |
1.78 |
1.77 |
1.76 |
1.78 |
1.76 |
1.74 |
|
Oil product exports, millions of tonnes |
7.7 |
9.9 |
10.6 |
13.0 |
13.5 |
14.8 |
15.1 |
15 |
Source: Prime-Tass, http://www.prime-tass.by/, Ministry for Statistics and Analysis, http://belstat.gov.by/, author’s personal archives.
The system of Soviet oil pipelines inherited by Belarus, Russia and Ukraine operates as a network of communicating vessels, which makes it possible to channel oil flows between pipelines (see Chart 1). Owing to its tariffs, which are lower than those set in Ukraine[17], Belarus has won the transit competition with the Ukrainian oil pipeline network and ensured an increase in oil transport by the Belarusian routes.
Chart 1. Transneft oil-trunk pipelines
Source: ОАО АК Transneft, http://www.transneft.ru/Shema/Shema.asp?LANG=RU
The launch of the first start-up complex of the Baltic Pipeline System (BTS or BPS) in December 2001 resulted in a sharp reduction in the volume of transport by the Novopolotsk Druzhba line; transport to Latvian Ventspils stopped, and since 2006, when BTS-1 reached its design capacity, Druzhba has not delivered oil to Mazeikiu.
It is clear that transit by the Belarusian pipeline system will keep decreasing proportionally to the commissioning of the Russian BTS-2 pipeline system components. This will cut the revenues from oil transit and impede the modernization of Gomel Druzhba (the Novopolotsk pipe has already come across these troubles) and, most importantly, create serious problems with maintaining the attractiveness of oil processing at the Belarusian oil refineries.
Oil transit through Belarus is loosely connected with its supplies to the Belarusian oil refineries (Table 1 shows that the increase in transit volumes was accompanied with a rise in oil deliveries to the refineries), however, we cannot say there is a clear and obvious correlation.
From 1995 to 2007, Russia did not charge export duties on crude oil delivering to Belarus on condition that Belarus would compensate by paying duties on its oil product exports to the Russian budget.
Russia never got Belarus to transfer refined oil export duties to its budget[18], though, and had to alter the terms of trade. As a result, on January 12, 2007 the two countries signed the Agreement between the governments of the Russian Federation and the Republic of Belarus on regulation of trade and economic cooperation in the sphere of export of oil and oil products, presupposing the introduction of export duties on crude oil delivered to Belarus subject to a scale-up factor throughout 2007-2009, whereas on January 1, 2010, Russia imposed a 100% export duty on its deliveries of crude oil to Belarus except for 6.3 million tonnes meant for Belarus’ domestic consumption.
Importantly, there are many private firms involved in production and sale of crude oil in Russia, but there is a single state-controlled transport monopoly Transneft, which will always be most interested in loading BTS-2 and the Baltic refinery. For Belarus, it might indicate not only a negative impact on the petrochemical sector, but also the demolition of one of the pillars of the “transit” model.
Assuming a proactive approach in 2010, Belarus managed to contract oil supplies alternative to deliveries from Russia and sign longer-term deals – Belarus inked an agreement on the use of the Odessa-Brody pipeline in the direct mode to import Venezuelan crude via Ukraine by pipe, reached an agreement with Azerbaijan over additional volumes of crude deliveries by Odessa-Brody and is in talks with the Baltic States over imports via Lithuanian and Latvian seaports.
5.2 Trade relations
Russia remains the key market outlet for Belarus’ ultimate output, despite the serious transformations in the Belarusian foreign trade pattern over the years of union relations: in the past few years, Belarusian exports to the EU caught up with deliveries to Russia and even exceeded them in value terms: in January-September 2009, the EU accounted for 56.36% of Belarusian exports in value terms, and Russia was responsible for only 31.5% of the deliveries.
The EU imports primarily raw materials and intermediate goods from Belarus, while Russia remains the main consumer of Belarusian end products (a.k.a. “investment import” in business publications). In 2008, Belarus sold to Russia 65.4% of its exports of vehicles and components and spare parts, 78.3% of machines and equipment, 93.5% of “animal products”[19]. As we already pointed out, according to the authorities, the socio-political stability of the country is directly dependent on the preservation of large productions (preferably state-controlled or with a substantial state shareholding) and number of jobs in the manufacturing sector, therefore the access to the Russian markets is still a priority for the government.
Trade relations with Russia are regulated by
- the Agreement on free trade (1992);
- the Agreement on the Customs union (1995);
- Protocol on free trade without exclusions and limitations (1995);
- Agreement on principles of collection of indirect taxes in export and import of commodities (2004);
- Agreement on mutual trade (2007).
These agreements create a preferential framework for Belarusian commodities on the Russian market as against commodities from third countries. At the same time, Belarus failed to reciprocate by offering Russian suppliers symmetrical preferences. Instead, Belarus imposed a variety of non-tariff barriers blocking Russian imports that could compete with Belarusian products on the domestic market. Specifically, Belarus introduced the institution of special importers (of cigarettes and fish), provided agribusiness with loans exclusively for acquisition of Belarusian machinery and placed a tacit ban on purchases of foreign machines, and pursued protectionist policies regarding the procurement of trucks by domestic haulers, etc.
The free trade agreement inked on March 23, 2007 provides for arrangements to facilitate access of Russian commodities on the Belarusian market and stipulates retaliatory measures in case Belarus should impose barriers to Russian goods.
Under the coercion of the industrial lobby, the Belarusian government is unable to significantly adjust its protectionist efforts that favor domestic makers, whereas the Russian side is not ready for serious steps to force the Belarusian partners to honor the commitments in the framework of the agreement.
However, as soon as local unions of manufacturers demand drastic measures, Russia plays the strong hand – the Belarusian sugar industry was put into a fix when Russia limited Belarusian exports. Russian makers of farm machines request a similar treatment of Belarusian exporters. At the same time, the development of modern productions of construction materials, automobiles, home appliances, etc. in Russia with the use of up-to-date cost-efficient solutions narrows the opportunities for Belarus to export its goods to the Russian market even without the restrictions.
The competitive advantage of Belarusian end products on the Russian market as compared to commodities coming from third countries is based on relatively low cost of raw materials and labor, access to state procurement schemes financed from the federal and regional budgets of the Russian Federation and subsidies granted by the Belarusian government. However, Russian makers have virtually the same advantages on their market, including various types of state support. It appears that Belarusian commodities will eventually have to compete with Russian goods (as the number of joint ventures and purely Russian productions grows) rather than goods coming from third countries.
While enabling Belarusian producers to not compete with exporters from third states on the Russian market, the Customs Union advocated by Russia does not offer this country any advantages over Russian products and envisages equal access of Russian commodities to the Belarusian market. But irrespective of Belarus’ accession to the Customs Union, it is highly likely that as industrial unions grow stronger and joint ventures increase their output, Belarusian manufacturers of end products will ultimately have to face prohibitive and blocking sanctions of the Russian government.
The changes in the foreign trade procedures that took place in the past few years (diversification of supplies, development of commercial infrastructure on the whole) were almost all about export of raw materials and intermediate goods. However, when it comes to end-use products, modifications have been insignificant, while efforts of the government to increase export supplies to third countries (Iran, Venezuela, Azerbaijan, etc.) still have little influence on the foreign trade structure. The latter is still a two-component system: EU + Russia, hence a serious infrastructural dependence.
5.3. Defense
Military and technical cooperation between Belarus and Russia is implemented on a few platforms – within the CIS, Collective Security Treaty Organization (CSTO) and the Union State.
The Collective Security Treaty (CST) of the CIS member-states was signed in 1992, and the Joined Air Defense System of the CIS was established within the CST. As a matter of fact, no air defense system was created – this was a classic example of a “buffering” effect, as the entire air defense system of the USSR (except for its Baltic segment) was inherited by the CIS, that is, it remained undistributed. After Uzbekistan withdrew from the Treaty, the CST was renamed CSTO, which Uzbekistan joined again in 2006.
Within the CSTO, interrelations are regulated by the Agreement on the fundamental principles of military and technical cooperation (2001) and protocol to the agreement, and the Agreement on the creation of collective rapid deployment forces (KSOR) (adopted on June 14, 2009, Belarus joined on October 15, 2009).
The agreement on the creation of the single regional air defense system of Belarus and Russia was also signed within the framework of the CSTO.
Also, there are Union State agreements proper – Belarus and Russia established a regional force of Belarus and Russia in accordance with the Union State Treaty. The main objective of the regional force is to ensure military security of Belarus and adjacent regions of Russia, and well as exclave Kaliningrad Region and the Baltic Sea water area. Belarus and Russia also signed the Treaty on coordination of activities in the military sector, agreements on principles of mutual technical and material support of the armed forces, on performance of active duty, on training of officers in service training establishments. Also, the allies reached a bilateral agreement on the operation and maintenance of the Baranovichi anti-aircraft radar station, as well as Vileika navy command operations center, a division of the submarine tracking system. The Union State also passed its Military Doctrine.
One important condition of the military agreements was, apart from military cooperation (collective defense, maintenance and development of joint infrastructure, mutual warning and alerting, information exchange, etc.), was the provision of military hardware to allies at reduced rates. However, Belarus is not quite satisfied with Russia performing its obligations regarding supplies of machinery and extension of the Russian defense order over the Belarusian military and industrial complex. Indeed, Russia tends to arm its own army in the first instance, whereas allied armies settle for “leftovers”, as the Belarusian brass puts it. The same is true for the Russian defense order.
At the same time, experts acknowledge the efficiency of the military and technical cooperation between Belarus and Russia. The Union State holds large-scale maneuvers every two years, which worries the governments of neighboring countries; the level of combat readiness is satisfactory, and it is owning to the cooperation with Russia in the defense sector that Belarus managed to complete its army reform[20]. The situation when Belarus makes use of the cooperation with Russia only to maintain and reproduce the USSR military heritage while making very little progress in its innovative development is characteristic of all other infrastructure elements.
6. Conclusion. Exhaustiveness of the “transition” model
In our opinion, it is imperative that the “progressive” analysis of the interstate relations involving Belarus (that is, the analysis of prospects of Belarus’ development in the context of regional tendencies, specifically, the prospects of the dialogue with Europe and the Eastern Partnership) should take into account the overall condition of the infrastructure of independence. This approach allows us to substantially broaden the forecasting possibilities of political economic analyses. For example, everything mentioned above indicates that the current status of the infrastructure of independence considerably narrows the room for maneuver for the ruling class in the context of interstate relations; specifically, it prevents expediting integration into Eastern Europe in the short run and, on a broader scale, enhancing the European component of Belarus’ policy (while the foreign political infrastructure is sufficiently developed to facilitate this turn). The “peg” to Russia will therefore remain the dominating component of the Belarusian policy in the short and mid terms.
The situation proves somewhat awkward for the Belarusian ruling class, though, because various Russian preferences are phased out as the potential of the buffer structure of the Union State is depleted (which to a great extent secures the regional competitive advantages of the country). The status of a member of the Union State has always been and still remains a very convenient form for Belarus primarily because of its vagueness. On the one hand, Belarus is formally and de facto an independent country; on the other, it is formally and de facto an autonomy within the Federation. This status can be used in two ways: (1) Belarusian economic agents can enjoy all the preferences offered by the Russian market, i.e. act as representatives of a “country that is part of the Russian Federation” and simultaneously benefit from preferences extended by the Belarusian government; (2) they can make use of all protectionist “screens” of an “independent” state and dominate on the domestic market with not even a hint of competition. On the whole, “as a system”, Belarus acts as a sovereign state when the time seems right, but as the need arises, it operates as a “union” territory under the protectorate of Russia (including economic protectorate).
The vagueness of the status of Belarus in the framework of the Union State is the backbone of what can be called a “transition” model. Belarusian “transition” incorporates (1) a territory of “seamless and conflictless” transit (especially of energy resources); (2) specific transfer or “turnover” of the “independent state” and autonomy within the “parent” state; (3) change from socialism to capitalism, or, more precisely, a socialist economy as a competitive component of a capitalist economy. Such a transition status enables the country to gain superprofits for its ruling elite by speculating on the volatility of the global and regional markets. “Special” relations with Russia provide Belarus with competitive advantages primarily through maintaining differences in prices for intermediate materials for Belarus and other countries of the region.
Experts have frequently noted that as a result of the restructuring of the Russian-Belarusian contract, Russian “subsidies”, defined as the difference between the energy price for Belarus and other countries of the region (Poland is used as the benchmark), have not decreased, but on the contrary, Belarus enjoys more benefits. This increase in preferences is largely due to inflationary reasons (specifically, GDP growth has been proportional). As a result, the share of Russian “subsidies” in Belarusian gross domestic product has remained unchanged for years. Even more importantly, Belarus has been losing its “transition” potency on account of the dismantling of the Union State, whereas the infrastructure of independence remains immature. The competitive advantages ensured by the special regime of interaction with Russia were spent on maintaining sociopolitical stability and reproducing the industrial machine that Belarus inherited from the USSR.
The consistency of the Belarusian administration in its efforts to keep its ownership of the key elements of the gas, oil, and military infrastructure and resistance to any attempts to create equal terms for Belarusian and Russia producers on the domestic market may be attributed to the disposition to preserve independence in the operation of these infrastructure components. In the meantime, on a one-on-one basis, Russia easily outplays Belarus in the negotiating power and speed of problem solving, and, more broadly, in building up its infrastructure of independence. The attempts to approach Europe with a dialogue are justified and logical: it is hard for Belarus to deal with its infrastructure skewness independently or in the format of the Union State, where Russia anticipates and excels Belarus in every move toward a stronger infrastructure. The cooperation with Europe offers new opportunities of resolving the entire package of problems together with other countries of the region.
It is evident that Russia’s progress in promoting its interests in the Belarusian direction is mostly connected with the gradual withdrawal of controversial issues from the framework of the Union State, which is why the Union State has no more prospects for the long term. It does not mean the union will be liquidated in the near future. First of all, the Union State keeps the ideological momentum, and secondly, it remains a functioning and efficient institute of accommodation of interests. Finally, an additional factor that extends the life of this buffer form is the economic crisis, which keeps Russia from completing some of its infrastructure projects. Russia had planned to launch high-speed trains in 2009-2010, start building BTS-2 in 2009, ESPO pipeline in 2009, and the North European Gas Pipeline (NEGP) in 2010. Rearmament of the Russian armed forces with new weapons had been scheduled for 2010-2015. Also, Russia plans to launch Vostochny space-launch complex in 2015. The list of large infrastructure projects that Russia may have to revise or postpone is much longer. All these projects, if completed, would reduce the significance of transit countries surrounding Russia and ensure its defense self-sustainability – without its CSTO partners (except for the “southern underbelly”). If Russia had managed to complete the global Bypass of the transit countries, it would have started forming a border infrastructure, and it would now be very simple to deal with tariff regulation and other issues. However, for some brief period of time Russia is getting back to the Yeltsin policy at a brand new stage – it is building up the Common Economic Area because it is forced to approach the countries that function as its borders and start quite burdensome bargaining.
Supplement. Assessment of the development of the infrastructure of independence
|
Infrastructure |
Belarus |
Russia |
||
|
1996 |
2009 |
1996 |
2009 |
|
|
Foreign political |
1 |
7 |
7 |
9 |
|
Financial |
2 |
6 |
2 |
7 |
|
Energy |
4 |
6 |
4 |
7 |
|
Defense |
3 |
5 |
6 |
8 |
|
Commercial |
2 |
5 |
4 |
7 |
|
Total |
2.4 |
5.6 |
5.0 |
7.6 |
Explanation: the degree of infrastructure development is rated on a scale 0 to 10, where 0 stands for complete absence of infrastructure and 10 for a full-scale independent infrastructure. The rate is based on a) the availability of sufficient numbers of facilities required for the operation of the system, their state and equipment; b) quality of communication between them; c) system management quality; d) availability or possibility to procure sufficient amounts of resources to maintain the system. Take the Russian energy system as an example: it is quite powerful, well-developed, sufficiently diversified from the point of view of demand, manageable, and has enough resources. Theoretically, the rate should be close to 9, which is quite logical for the country that competes for the role of the energy superpower. At the same time, a) the quality of energy facilities is not excellent (capital consumption rate is high, and some elements of the system are morally outdated; b) the problem of transit and transit countries remains relevant, and energy delivery costs are still high; c) outdated marketing schemes, for example, the inflexible contractual system and neglect of new forms of delivery and sale (for instance, LNG) threaten long-term prospects of demand; d) infrastructure expansion prospects are not so serene: the social burden imposed on energy companies does not allow them to channel all of their funds into the development of infrastructure, which is why they have to borrow, hence additional political and economic risks. The final score is therefore between “satisfactory” and “good”.
[1] A. Pankovski: Buffer Forms: to Europe through Denial of Europe // European Perspective of Belarus: Intellectual Models. – Vilnius: EHU, 2007. – p. 175.
[2] See Anatoly Pankovski. Old new Russian policy towards its borderline transit countries // BELL, Issue 4 (4), April 2009. p. 6-8. http://www.eesc.lt/en/bell.
[3] Ibid. – p. 178.
[4] Ibid. – p. 180.
[5] Urban Michael E. An Algebra of Soviet Power. Elite circulation in the Belorussian Republic 1966-1988 (Cambridge: Cambridge University Press, 1989). Translation into Belarusian, see. ARCHE #3, 2008. p. 86-231.
[6] Russia’s borders with the CIS member-states (including Georgia and Ukraine) do not have border infrastructure, frontier and customs control. Mobile customs stations keep records of the freight traffic on the largest transport routes, but overall the borders are penetrable and largely conditional. The conventional nature of the Russian borders is to a great extent due to the fact that their location has not been officially marked at the interstate level – delimitation of the state border has not been completed, to say nothing of demarcation. Furthermore, even those conventional borderlines often become a matter of dispute between Russia and its neighbors, especially the Caspian Sea borders and sea borders with Ukraine.
[7] V. Snapkovski. External Policy of the Republic of Belarus: First Results of the First Decade // Belarusian Journal of International Relations, #4, 2000: http://www.portalus.ru/modules/belarus/rus_readme.php?subaction=showfull&id=1096041141&archive=&start_from=&ucat=20&
[8] The Treaty in its 1999 version contains the notion of “citizenship”, but the institute of union citizenship was never created.
[9] Quoted from K. Kamyshev. International Recognition of the Republic of Belarus // Belarusian Journal of International Law and International Relations, #5, 2001: http://www.evolutio.info/index.php?option=com_content&task=view&id=737&Itemid=113
[10] T. Ushakova Succession in State Property Titles in the Republic of Belarus // Belarusian Journal of International Law and International Relations, #1, 1999: http://evolutio.info/index.php?option=com_content&task=view&id=270&Itemid=50
[11] See A .Pankovski, V. Kostyugova. Russian-Belarusian Relations // Belarusian Yearbook – 2008. A collection of reviews and analysis of the developments in the Republic of Belarus in 2008 – Minsk, 2008. p. 62-64.
[12] IMF staff viewed the unification of the monetary systems of Russia and Belarus as a purely economic project, believing that the Russian ruble, being stronger (and convertible, albeit with restrictions), will shore up the Belarusian economy better than the national ruble.
[13] In 2000, Belarus adopted the Banking Code, and in 2006, a new version of the Code. See Yu. Alymov. Republic of Belarus: evolution of the monetary policy and development outlook for the banking system // Money and credit, #8, 2007. – p. 3-8.
[14] It is indicative that it is during that period that Belarus actively invited OSCE observers to monitor the parliamentary election.
[15] See V. Kostyugova Master List // Nashe Mneniye, 8/31/2007: http://nmnby.eu/pub/0708/31m.html.
[16] A. Mikhalevich Energy Security of the Republic of Belarus: Components, Challenges and Threats: report at the First Session of the Energy Club on October 29, 2009 // Nashe Mneniye, 11/11/2009: http://nmnby.eu/pub/0911/energy_security.pdf.
[17] For details, see V. Kostyugova. Prospects of Belarus’ participation in the operation of the Odessa-Brody oil pipeline: http://www.belinstitute.eu/index.php?option=com_content&view=article&id=206%3A2010-02-15-18-08-58&catid=10%3Aenergy&Itemid=28&lang=ru
[18] Agreement on the Customs Union between the Russian Federation and the Republic of Belarus dated January 6, 1995, Protocol on the introduction of the free trade regime without exclusions and limitations between the Russian Federation and the Republic of Belarus dated January 6, 1995.
[19] See D. Kruk. Impact of the crisis on Belarus’ position on Russian markets: http://www.belinstitute.eu/images/stories/documents/bb302009ru.pdf
[20] See A. Alesin. Army: modernization must replace reorganization // Collection of reviews and analyses of the developments in the Republic of Belarus in 2008. p. 45-51.
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