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GAS PRICES FOR BELARUS TO GO UP

YAROSLAV ROMANCHUK,
President of the Minsk-based Mizes Center

I believe that the myth of the Belarus-Russia Union is being destroyed, and the current scheme which was employed by Russia on drafting an agreement with Belarus about gas cooperation is nearing its end as well. Evidently, this decision has to do with the presidential election held in Belarus.

Russia rendered absolute support for Aliaksandr Lukashenka, and one of the conditions of this support was transferring of Beltransgaz under Gazprom’s control. Belarusian official authorities were saying their people this would not happen, but different things were promised the Russians behind the scenes. Finally, after Belarus had either been procrastinating to give its answer or decided on not selling Beltransgaz, Gazprom realized it should choose another strategy: the one, which had been used in case of Moldova and Ukraine.

I repeatedly emphasized, I do not believe that such a deal (Beltransgaz sale) would occur. Obviously, Russia does not profit from the current scheme of gas cooperation. I think that adoption of the European gas prices for Belarus is de facto realization of the “not mixing apples and oranges” policy, declared by Vladimir Putin many years ago. So, it is necessary to be consistent and Russia will be respected not only by the Western community, but also by the common Belarusians, who in the light of the recent events have negative attitude towards the support of Putin and his government for Aliaksandr Lukashenka.

The consequences of raising gas prices for Belarus will be the same as they were after the gas prices plummeting was for the USSR and for the Baltic states after the world prices had been imposed in the early 1990s. Should the gas prices review be followed by the review of the Russian oil supply, it would be the end of the “Belarusian economic miracle”. The GDP decrease, the deep financial and budget crises are evident. Therefore, political and social tension in Belarus is growing. All of that will result in Belarus, becoming different politically and economically. I think that Lukashenka is likely to resign in 2007, if Russia believes real actions of the Belarusian authorities, instead of allowing itself to be run by the official Minsk and play the integration process.

In 2006-2007 in Belarus new forces will appear, which will be able to offer Russia a new, more pragmatic and more profitable scenario of the relationships. This will urge Russia not to lend absolute support for Lukashenka’ authoritarian regime.

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