Despite its proclaimed support for the Lukashenko regime, the Kremlin is increasingly frustrated with the Belarusian president, who has skillfully avoided integration with Russia and engaged in a multivector foreign policy with the West. A democratic alternative to Lukashenko with a proper privatization program will likely be accepted by Moscow as it seeks to gain access to key assets of the Belarusian economy.
On February 7, 2020, Vladimir Putin held talks in Sochi with Alexander Lukashenko, who came to Russia on a working visit. Photo: kremlin.ru.
The August 9 presidential election in Belarus was the latest challenge to the regime of Alexander Lukashenko, a strongman known as “Europe’s last dictator,” who has ruled the country for 26 years. This time the challenge came from the young female democratic opponent Svetlana Tikhanovskaya. Despite overwhelming popular support, Tikhanovskaya officially won only about 10 percent of the vote, while Lukashenko claimed a landslide victory with over 80 percent. Unprecedented mass protests against the rigged election followed, resulting in police violence and international outrage over the brutal crackdown on the peaceful demonstrations. Still, these were not Lukashenko’s only problems.
Another challenge facing the Belarusian president is his Russian counterpart Vladimir Putin, who increasingly wants him gone. On the surface such an assumption might seem strange for at least two reasons: first, Belarus and Russia are members of the Union State—a supranational formation established in 1996—and second, both leaders have emerged as resilient autocrats. In reality, their interests stand in direct opposition, and their regimes have diverging socio-economic roots, making Lukashenko and Putin as alike as a dolphin and a shark.
The roots of the conflict
Following the dissolution of the Soviet Union, Russia and Belarus followed very different paths. Boris Yeltsin’s government in Russia engaged in market reforms and privatization, which resulted in numerous valuable state assets (including oil and gas companies) being sold at discounted prices to a narrow circle of people who eventually became Russia’s first oligarchs. At the same time, average Russians went through economic ruin, while the country’s social safety net inherited from the Soviet times—free healthcare, higher education, housing—crumbled.
Public resentment with the reformers ran high, and many people started to feel nostalgic for the stability of the Soviet era—sentiments that were harnessed by Vladimir Putin when he came to power in 2000. He exploited the public mood for his own political gain. For example, to please this part of the electorate, he readopted the Soviet anthem and claimed that the collapse of the Soviet Union was the greatest geopolitical catastrophe of the 20th century. But these concessions were superficial, as major results of the Yeltsin era, such as the privatization of the Russian economy’s “commanding heights,” were preserved. While initially Putin did go after some oligarchs (notably, Vladimir Gusinsky, Boris Berezovsky, Mikhail Khodorkovsky), they were not eliminated as a group and remained one of the pillars of his regime. In fact, many of Putin’s close associates joined the oligarchic ranks over the next two decades, thus showing continuity between Yeltsin’s and Putin’s Russia.
Belarus followed a completely different path, one that is more comparable to China than to Russia. Under Lukashenko, who was first elected president in 1994, the “commanding heights” of the Belarusian economy remained in the state’s hands. The Soviet-era social safety net was also preserved. The ultimate rejection of wholesale privatization has been an essential trait of the Lukashenko regime ever since. Additionally, Lukashenko’s political ambitions have shaped Minsk’s relationship with Moscow. In the late 90s, when the Union State project was first forged, some members of the Russian elite saw him as a potential successor to Yeltsin—as a head of a united state—due to his popularity with large groups of the Russian electorate. But realizing that Lukashenko’s leadership would bring imminent nationalization, Yeltsin’s family ultimately favored Putin, who was not seen as a threat to the status quo.
What Russia wants
Over time, as Putin’s grip on power was secured, the Russian elite started to look with increased interest at Belarusian assets, such as oil refineries and factories. The 2013 incident involving Vladislav Baumgertner, head of Uralkali, a leading global potash producer, is a case in point. Baumgertner was arrested in Minsk, having come on the invitation of the Belarusian prime minister to discuss the escalating conflict between Uralkali and its former partner Belaruskali. The two companies formed an exporting cartel, but Baumgertner accused his Belarusian counterpart of illegal sales on the side and pulled out of the cartel, predicting collapse in potash prices and thus jeopardizing the Belarusian economy, which gets about eight percent of its profit from the potash industry. Baumgertner became Lukashenko’s hostage in one of its many “wars” with Russia over Belarusian industrial assets. He was later extradited to Russia, where the criminal case against him was eventually dropped in 2015.
Given these differences and conflicting interests, why, then, are Minsk and Moscow still formally united in one state? For one, states can be allies for pragmatic reasons, regardless of their ideological differences—like Mao’s China and Nixon’s USA, who joined forces against the USSR, which they both feared. Putin needs Belarus as a geopolitical ally due to its strategic location between Russia and Europe. Pragmatic cooperation with the Lukashenko regime may have led some members of the Russian elite to believe that they could gain access to Belarusian assets. To lure Minsk into a deeper integration, the Kremlin largely subsidized the Belarusian economy, including selling it gas and oil at discounted prices. Still, for many years, Lukashenko refused to be fully “integrated” with Russia, although he joined Putin in co-founding the Eurasian Union—the Russian president’s geopolitical pet project. But both Belarus and Kazakhstan, another co-founder of this supposed counterweight to the European Union, refused to surrender any authority to the transnational body, that is, to Russia. Lukashenko’s unwillingness to fall in line increasingly frustrated the Kremlin, and feuds between the two countries became regular business, but Belarus’ dependence on Russian subsidies and Russia’s security imperatives would always incentivize a compromise.
In 2018, however, tensions started to grow beyond the usual. First, as a result of its geopolitical adventures that cost Russian economy a heavy price and the decline in global oil and consequently gas prices, the Kremlin decided that it needed a more tangible return on its investment in Belarus. Second, the Kremlin’s ambitious geopolitical projects—the Nord Stream II and Turkish Stream gas pipelines—began to stall. Amidst these challenges, Moscow opted to hike gas prices for Belarus, implying that, should Lukashenko agree to fully integrate into Russia, he would be granted gas contracts at Russian domestic prices.
The timeframe of this last push is based on Putin’s estimate of the poor state of the Belarusian economy, which would leave Lukashenko no choice but to join Russia. Another factor was Moscow’s growing concern about Minsk’s tilt toward the West.
Lukashenko dabbled in foreign policy “multivectorism” for a while, as did many other post-Soviet states. But since his efforts were largely unsuccessful, Moscow was not worried about his flirting with the West. In recent months, however, the situation has begun to change. Minsk’s relationship with Brussels has softened. In February, US Secretary of State Mike Pompeo visited Minsk—the first such visit of a high profile American official in 26 years, which resulted in full restoration of diplomatic relations. Moreover, Lukashenko claimed that NATO would not tolerate a Russian invasion of Belarus and would rightly respond with a war.
All these developments alarmed the Kremlin, which at first tried the usual disciplinary measure of denying Belarus its gas discount, and then reignited the idea of removing Lukashenko from the top job through the August 9 presidential election. Perhaps the 33 Russian mercenaries affiliated with the Kremlin-linked Wagner group who were arrested days before the election had been sent to Minsk at the Kremlin’s directive to cause disorder (Moscow bluntly denied it, of course).
But after Lukashenko rigged the election and Belarus became embroiled in mass protests and countrywide strikes that utterly undermine his regime, whom does the Kremlin see as his replacement? And wouldn’t the victory of a democratic opposition candidate, such as Tikhanovskaya, be Moscow’s worst nightmare?
To answer these questions, consider the differences between the Russian and Belarusian socio-economic models. With Lukashenko in charge, the key assets of the country’s economy prized by the Russian elite will remain in the hands of the Belarusian state. But if the democratic opposition comes to power, it would most likely launch a privatization program, opening up great opportunities for Russian investors. Russian control over the “commanding heights” of the Belarusian economy would de facto mean Russian control over the country, even without formal annexation. Such dependence implies that the Belarusian democratic opposition would not be able to successfully challenge the Putin regime.
It is still unclear if Lukashenko will ride out the current storm and, if he does, how long his regime will be able to survive, even with his “multivectorism.” With Lukashenko in power, Belarus would preserve its status as the last relic of the long vanished USSR, but judging by the magnitude of the August protests, Belarusian people are already rejecting it. As ever, the Kremlin is watching closely.
