MOSCOW. (Andrei Suzdaltsev for RIA Novosti) - Alexander Lukashenko's policies toward Russia have always been paradoxical.
The Belarusian president has often improvised at talks with the Russian leadership, unexpectedly shifted from a closed format of talks to an open one, resorted to intrigues and maneuvers and even used information campaigns to put pressure on the Kremlin.
However, the December 25-26 reversal of Minsk's stance on Russian gas supplies to the republic in 2007 brought the talks with Gazprom, which had taken eight months, to the brink of failure. In fact, the negotiations returned to where they were in April 2006.
Last spring, when Gazprom first demanded that Belarus pay $200 per 1,000 cubic meters of gas, Lukashenko announced that it was entitled to buy energy at domestic Russian prices under the agreement on the Union State of Russia and Belarus. Then, after numerous meetings between the two parties' representatives, Minsk managed to tempt Gazprom with the prospect of getting a 50% stake in the Belarusian pipeline monopoly, Beltransgaz. It took five months to assess the company's production assets, and the conclusion was that it was worth no more than $500 million. In November, it seemed that Minsk had caught the Russian gas giant in a trap and gained almost six months. It was obvious that Lukashenko would never agree to this price for what is just about the only real asset his country possesses.
Moscow was forced to make concessions. Gazprom agreed to Beltransgaz's assessment of $3 billion. Last week it was already talking about $5 billion.
Apparently, Gazprom hoped that these concessions would spur Minsk to set up a joint gas transportation venture. Instead, the Belarusian authorities stalled the completion of the "gas marathon."
There are now four days left until January 1 and Belarus still has no gas supply contract. Nor is there a contract for gas transit to Poland, Lithuania, and Russia's Kaliningrad Region. Yet after December 28, Lukashenko will be technically ready to sign a deal transferring 50% of Beltransgaz to Gazprom as payment for part of the gas to be supplied in 2007. But the Belarusian authorities seem to have calmed down after a series of concessions on the part of Russia and decided to continue their intrigues until the last moments of 2006.
The latest intrigue was heralded by a statement from Belarusian Energy Minister Alexander Ozerets, who said that a joint venture based on Beltransgaz would be set up only in 2007. It became clear that Minsk would try to cancel the package agreement, in which the gas price was linked to the price of a 50% stake in the pipeline monopoly. There was a feeling that Lukashenko would press for signing the gas supply contract with the discounted price immediately before the New Year, postponing the setup of the joint venture until the first quarter of 2007. He would pin his hopes on putting psychological pressure on Gazprom's top management before December 31. Minsk is positive that Gazprom would not dare supply gas to Belarus without a contract and that it would not dare turn off the tap. Lukashenko thereby hoped to lure Gazprom into another trap: Belarus would get cheap gas, and the transfer of the 50% stake could take years.
As of Friday, December 22, it seemed that Belarus would stick to this scenario. Yet three days later, on December 25, Minsk unexpectedly announced that it was ready to pay only as much for gas as Smolensk did, ignoring the fact that Smolensk is part of Russia, not Belarus. Belarus continued insisting on its right to Russian energy at Russian prices based on the Union State agreements.
It is worth noting that Minsk has an odd understanding of Russian-Belarusian integration. The Constitutional Act of the Union State has been awaiting signature for six years; there are 75 non-tariff restrictions on Russian goods, and Belarusian customs has taken on the role of Russian customs, regularly confiscating Russian shipments worth hundreds of millions of dollars a year. The Belarusian leaders have also blocked the introduction of the Russian ruble (which is the single currency of the Union State) in the country.
Minsk usually remembers that it is part of the Union State only when it is time to sign new gas and oil contracts or when it encounters problems on the Russian market. The gas talks of 2006 have been no exception.
Gazprom's management understood that the eight months of talks had been in vain. The gas giant resorted to an unprecedented step on December 26, offering Minsk a four-year discount period during which gas would cost $80 per 1,000 cu m, along with a further discount of $30 to be paid for with Beltransgaz shares. Only after four years would gas prices for Belarus reach an average European level. Moreover, the setup of the joint venture would be postponed until 2011. By accepting these terms, Belarus would have been the only country in the world enjoying so many privileges for gas supply.
Minsk, however, refused to accept these concessions and demanded absolute capitulation, i.e. gas supplies at symbolic prices.
Throughout 2006, Gazprom has repeatedly tried to make concessions to Minsk. Yet the harder it tried, the more stubborn Minsk became. On December 26, the Belarusian government hinted that it had prolonged the talks for so long in order to stall for time and force Gazprom to either take radical steps or throw itself on Lukashenko's mercy.
What happened on December 25-26? Why did the Belarusian authorities knowingly allow the talks to fail? Why is Minsk so certain that Moscow will make across-the-board concessions and remain the uncomplaining sponsor of the utterly inefficient post-Soviet Belarusian economy for many years to come?
Perhaps, Belarus has made some agreements with Brussels, which can support Lukashenko in case of a tough confrontation with Gazprom. Yet it is hard to imagine that the EU, even with all its dislike for Gazprom, would encourage an energy crisis right on its borders. Brussels' policies can sometimes be criticized, but the European Commission has never given anyone a reason to accuse it of energy or political extremism. The West can lash out at the Kremlin and Gazprom, but it will not allow itself to be drawn into the Russian-Belarusian conflict.
Andrei Suzdaltsev, an expert at the Higher School of Economics
