Visegrad/Insight sat down with Andrew Wilson, Professor of Ukrainian Studies at the University College London’s School of Slavonic and East European Studies and author of Belarus: The Last European Dictatorship.

V/I: Over the last year, Russia is seemingly more and more interested in applying pressure on Belarus. There have been many different instances to support this theory, such as the Zapad exercises. Moreover, this intrusion of Russia influence on Minsk is controversial for the Belarusian domestic scene, and this will most likely be exacerbated by the new Ambassador of the Russian Federation to Belarus, who seems to be a “hardliner” in diplomatic terms. There are even some allegations about Russia wishing to install a regime-change in Minsk; at least this is what appears in the media. What would be the purpose behind this move? Are there any threats that Belarus could become even more dominated by Russia?

Andrew Wilson (AW): Lots of post-Soviet countries claim to have a multi-vector foreign policy. The phrase Mr. Lukashenko normally uses is “many wings”. It’s a misleading metaphor as there is only one real relationship that matters – the Russian-Belarusian relationship. Even before 2014, there were escalating tensions between the two countries due to the constant bargaining over incommensurate, unequal things.

Belarus leveraged the relationship to get subsidies while Russia gave those subsidies in return for geopolitical favours and for economic influence over Belarus. Obviously, these things are different, thus negotiations were always going to be fraught with problems, even before 2014 when everything changed.

Russia has started to redefine the terms of loyalty in that relationship or redefine the notion of friendship. Friends had to be a lot friendlier, a lot closer to the Russian position. However, the open campaign of Belarus was not particularly supportive at that time, not even to the Russian annexation of Crimea.

For the Belarusian elite, there is a general message about statehood and sovereignty. To put it simply – Mr. Lukashenko wants to stay in power. Essentially, everything that he has done since 2014 can be explained in these terms – manoeuvring to preserve sovereignty and diversifying his options.

The problem, of course, is the other part of the equation which is money. In fact, the Belarusian economy has been in an abnormal recession mode since 2008 after a decade and a half of doing really well. Thus, we are constantly getting arguments within that bilateral relationship about the connection between sovereignty, geopolitics and money.

From the Russian side, you see these periodic outbursts of frustration about Belarus not being loyal enough or that the state is getting too much money. And, of course, Russia doesn’t have money as readily available as they used to. Thus, subsidies come at a much higher price and within the context of the slow growth Belarus is contending with; the row is getting worse. Russia is becoming increasingly serious about trying to pull back their money while Mr. Lukashenko is becoming more serious about diversifying his options; so, the rows are getting more bitter and longer, and that is a cycle we’ve been seeing for about five years now.

V/I: It seems Lukashenko has sent several soft signals to the West, which is something he does, but he isn’t sending any positive signals that he is getting along with the Russians. Yet, Russia is sending stronger and stronger messages which are provoking Belarus to give ever stronger responses in cultural terms.

This is about eventually boosting Belarusian pride, somehow, with the state elites and on a cultural level because there is a fear that Russia may repeat (in Belarus) what has happened in Ukraine. Also, the Russians are not treating the Belarusians the way they want to be treated, they don’t want to be the “younger brothers” all the time.

AW: Yes, understanding Mr. Lukashenko is pretty simple.  He wants to stay in power, so that is what is driving the relationship and preserving the system. So, initially, the campaign slogan that he had was “Za Belarus…” which meant support me, support sovereignty and the three dots were very significant as there was no further definition. The slogan was intentionally left vague.  Now the slogan is more concrete – (“За будущее независимой Беларуси”),

Since 2014, we have seen the Belarusian elite calculating that it must put in a little bit more cultural support into the formula of “why we should support Belarus”. So, one could see a soft campaign of Belarusianisation which also increases the tension with Russia, and, particularly, in a situation where the Russian position is traditionally so dominant. So, another reason for these kinds of periodic outbursts of frustration on Russia’s part is that they can see this soft Belarusianisation which is taking Belarus further away in the long term.

V/I: What about the economy? Over the years, Russians have gained several concessions as they were buying up big chunks of the Belarusian economy. Perhaps, some people say, there is not any big prizes left for the Russians to take. Russia, as you said, is too short on cash to be important to Belarus in the long-run, but they are meddling with the economy of Belarus.

Now, theoretically, we are probably at a high point of the global economic cycle. So, when things go wrong, Belarus will have fewer options. If we speculate about that, what scenarios do you see if there were to be a down-turn of the Belarusian economy and what would be the effect? As we have already seen, Lukashenko has had his options limited when it came to the different forms of taxation. Last year, for example, people went out in large, unprecedented protests when he tried to introduce a kind of a Soviet-style taxation…

AW: Well, to be fair, Russia has not bought up the entire Belarusian economy. Beltransgaz (today: Gazprom Transgaz Belarus) was sold, but even then, Lukashenko spun the bargaining out as long as he possibly could. Giving the limited resources available to him, he has actually been quite successful in preserving most of the big enterprises in the Belarusian state. However, this is a problem for the more dynamic parts of the economy, particularly in the IT sector, which is overtaxed in order to keep the other big state industries alive. The economy has been in a low-growth mode since 2008. The survival strategy, albeit very skilful, is really on the margins.

In terms of the amount of foreign exchange reserves that Belarus has, the balance between loss and profit in these state industries…there is not much to play with. So, if there is a further global recession or anything close to that like when the oil price dips, that’s very bad news for Belarus as well. Anything that tips Belarus further down from low-growth into actual recession again would be a real problem.

As we saw last year, the country is really two countries; you have the dynamic part, Minsk, and Minsk looks great! It’s growing, and they have the big IT economy based there. However, in the other regions, things are often very, very depressed. Also, particularly in the East, a lot of people used to work in Russia, and the Russian economy isn’t doing very well. Belarus is surviving with a hand to mouth existence and by a lot of schemes to extract subsidies, which is a kind of permanent ongoing task. So, a serious global recession would throw that survival formula out.

V/I: Almost exclusively, when we discuss the Minsk-Moscow relationship, it boils down to the economy…  is that all that matters for Belarus?  Because we also see the Chinese investments. For example, already when you land in Minsk, it is quite striking, the airport looks like it could be in China – everywhere there are signs in Mandarin.

AW: Yes, again, the primary relationship is with Russia – that’s the basis of understanding. However, diversification is key to managing that relationship and China is particularly important. Belarus has high hopes in virtue of its status as one of the key, not ultimate termini, but a penultimate termini of the One Belt, One Road initiative. That’s the model Belarus really hopes to exploit where China might bring all of its goods into or completes them in Belarus before they move on to Germany. This is the big economic pact Minsk needs to get together.

And there is a lot to be gained there, but as with any Chinese partner the relationship is pretty mercantilist; China strikes a hard bargain; it doesn’t give money for free; it doesn’t really care about democracy. There are no geopolitical conditions attached to Chinese money or Chinese business, but they strike a hard bargain.

This interview is part of the #DemocraCE project.

Andrew Wilson

Scenarios for cohesive growth

As of 2019 the negotiations about the next Multiannual Financial Framework (MFF) will enter a critical moment. In the face of an imminent Brexit and the fallout from global turmoil, the EU has to reflect on its guiding principles and take decisions to fulfil the promise of a united Europe.

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The Visegrad/Insight is the main platform of debate and analysis on Central Europe. This report has been developed in cooperation with the Centre for European Policy Studies (CEPS).

Launched on 1 October 2019 at the European #Futures Forum in Brussels.