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Relations with Belarus get complicated

Tension in Russian-Belarusian energy relations is rising. On June 21 Inter RAO literally at the last moment granted Minsk an extension on electrical energy debt repayment, thus canceling its plans to cut off electricity supplies. Russia started selling electrical energy to Belarus in February 2011; Minsk planned to import 3bn kW/h of Russian electrical energy this year.

The Russian side obviously did not want to repeat the previously made image mistakes related to tough measures against Belarus on the eve of the politically and historically inopportune date (June 22). But problems are likely to aggravate later. So far Lukashenko is not ready to agree to Moscow conditions of large-scale loans (privatization and sale of stakes in key enterprises at reasonable prices amid a deep and serious economic crisis in the republic).

Instead, Minsk is raising stakes in the game threatening to find other partners meaning not the EU (the relations with Europe worsened after political repressions in late 2010) but China that allegedly may get plots of land in the republic under long-term lease agreements in exchange for credits. The Belarusian side hopes to use the Chinese factor to press Moscow and Brussels. However, there is no guarantee that the PRC will allocate in full the loans Minsk request. Besides, the Belarusian leadership is running out of time – real incomes of the population are falling and the official exchange rate of the national currency does not correspond to the market estimations. Lukashenko’s measures on closing borders (the president even declared about his readiness to ban imports at all) are fraught with risks of additional growth in protest sentiments that are restrained by law enforcement bodies so far. However, there is an obvious and strong negative trend in the level of social support to the current political regime in Belarus.

By Stanislav Mitrakhovich, NESF leading expert

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