Belarus-Russia relations sour over gas deal

Alexander LukashenkoIt looks as if relations between Belarus and Russia are becoming increasingly strained, as reports come through that no agreement has been reached on the future of gas prices. 

Although there has been no official announement yet on the outcome of the talks, Reuters are reporting that the talks went so badly that Lukashenko decided to skip the evening’s planned entertainment

He returned to Minsk, skipping a Kremlin dinner and a planned trip to an ice-hockey match.

Presumably, he didn’t get to do any Christmas shopping, either.  

Anyway, how did this dispute come about?  Russia are insisting that Belarus pays for its gas supplies at the full market rate, which would be more than double, and possibly even four times as much as Belarus currently pays.  Russia, in its generosity has agreed to waive the increase, but only if Belarus agrees to sell its gas distribution network, Beltransgas, for $4 billion. 

The problem is, Belarus doesn’t want to sell one of its prize assets, which it values at closer to $16 billion.

Where this leaves the prospect of political union between Russia and Belarus, I don’t know. 

It should, though, act as a warning to those authoritarian leaders who want to cosy up to Russia.  Freindship means very little to the Kremlin when it comes to selling gas these days.

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4 Responses

  1. Bob says:

    The burning of gas is old hat anyway – The sooner we all go nuclear the better in our humble opinion.

  2. copydude says:

    In the current climate, I’d say that Russia could do with any allies. The mid East oil grab has gone badly wrong, so America is returning to ‘The Great Game’.

    Belarus is looking rather isolated too. Maybe today you read about the speech on the last day of the Finnish presidency of the EU. Belarus was described as ‘a scar on the face of Europe’.

    For their mutual salvation, Belarus, Ukraine and Russia should have formed an economic block some time ago – as I believe Gorbachev advised.

  3. Andy says:

    I hadn’t seen the Finnish speech, but I’ll look it out – thanks.

    I tend more towards the view that Ukraine and Belarus should have look Westwards for economic development, rather than back Eastwards.

    Yes, there are short term benefits to closer economic re-integration with Russia, but longer term, Russia has very little to offer in terms of trade with its neighbours. The focus of the Russian economy remains quite narrow – primarily on its larger scale exports.

    If countries like Ukraine and Belarus want to build a strong, diverse and modern economy, they should be looking primarily towards links with the EU, the US and Asia.

    (Which isn’t to say they shouldn’t look to also strengthen their current links with Russia, or to abandon them altogether).

  4. copydude says:

    I agree it’s unusual to speak out in this way. The anti-Putin rhetoric is moving up a gear.

    I thought it was also highly unusual for the British Ambassador to visit the ‘alternative summit’ at G8. That just ain’t diplomatic. Holding a NATO conference in Latvia was provocative too.

    Whatever is going on here, it’s a team effort.