Updated at 23:19,25-10-2016

Russian Monologue on Modernisation

14-12-2012, 17:47
Russian Monologue on Modernisation

On 22 November, Alexander Lukashenka met with Putin`s protégé and head of the Gazprom directive board Alexey Miller.

During the meeting, Al. Miller presented a program on how Gazprom will develop the Belarusian gas infrastructure and make new investments into the economy.

Gazprom has become a pioneer of the grand Russian business which has great influence in Belarus as well. The business circles subordinated to Kremlin offer modernisation and additional investments to the official Minsk in return for selling the Belarusian strategically important enterprises to Russia.

While the European Union suggests some vague "dialogue on modernisation" to the regime, Russia prefers to address Belarusian authorities in the form of monologue. The Russians base their monologue on three factors: privatisation of Belarusian enterprises to Russias benefit, granting economic stability of Belarus for the expense of the Russian business and long-time reign of Alyaksandr Lukashenka.

Kremlin hopes that Lukashenka will sell some important enterprises under the pressure of economic problems and bad relations with the West. However, the regime is aware that selling of the Belarusian enterprises contains not just economic benefits, but also political threats in it.

The Importance of Gazprom for the Regime

About a year ago Gazprom purchased the remaining 50 per cent of Belarusian gas infrastructure and transportation company Beltransgaz shares and became its only owner. Since that time, the importance of Gazprom for the Belarusian economy has grown and it will keep on growing.

Gazprom grants stable low prices for gas. In 2013, Belarus will pay only $185 per cubic metre. No other foreign partner of Russian gas monopoly pays so little. Moreover, Belarus increases shipments of gas. In 2012, the country will use 22 billion cubic metres of gas, which is 10 per cent more than in 2011. Also Russian corporation promises to increase the gas transit to Europe via Belarus by 30 per cent, which will bring extra money to the Belarusian budget and strengthen the reputation of Belarus as a transit state.

Gazprom will modernise the gas transportation system inside Belarus. The Russian corporation aims to modernise 35 gas transportation stations in Belarus by 2015. Also, Gazprom is going to modernise the underground gas storage in Mazyr and will connect it with the compressor station in Nyasvizh by a gas tube.

The Russian corporation also tries to be socially active. Gazprom will finance construction of an office complex, a multi-apartment residential building for families with many children, a junction, reconstruction of the bus station in Minsk, and one of the barracks of Brest Fortress.

An enterprise from the relatively poor Russia would find it more reasonable to invest money into its own state. However, Russian gas monopoly performs not just an economic function in Belarus. The corporation carries a simple message from the Russian government to the Belarusian society: selling Belarusian enterprises brings welfare.

Gazprom means not just gas industry. The Russian corporation owns Belgazprombank in Belarus. It seems likely that Gazprom will increase its influence in other spheres of the Belarusian economy as well.

The Russian Offer

The example of Gazprom clearly shows that Russia will conduct modernisation of the Belarusian enterprises and will invest money into the Belarusian economy on the terms that Lukashenka will be gradually selling strategically important enterprises to Russia. This means, money in return for independence.

Lukashenka remains a complicated ally for Kremlin, therefore the Russian authorities also work directly with the Belarusian society. In Spring 2012, Gazprom raised the wages of the Beltransgaz workers by 3 times, which worked as a demonstration of the economic and political power. Its easy to guess that the workers of the sold enterprise greeted such decision of the new owner.

The situation with wages looks surreal. An anonymous "Beltransgas" employee informed Belarusian Internet portal Onliner.by , that, when a vacancy appears at the enterprise the director cannot tell the potential contender by phone about the wages he is going to pay him at this position. Moreover, the director demands that the employees should not tell each other how much they earn.

Kremlin realises that Belarusian economic problems offer the best vehicle for increasing the influence. Moscow demands privatisation from Minsk not because there are liberally-minded people in Kremlin. The reason is more simple: Russia wants to buy all strategically important enterprises in Belarus. ​

Russias modernisation of Belarus combined with involvement into the Customs Union, the United Economic Space and the future Eurasian Union shows that Kremlin hopes to securely chain, if not incorporate Belarus.

The Regime Decides

The official Minsk does not show much willingness to accept the Russian's offer.

First, Belarusian authorities understand the political bias of Russias economic influence in Belarus. Officially, on 22 November Lukashenka said: "We greet Gazproms arrival to Belarus with huge investments, we support this, we are going to benefit from this". Non-officially, the Belarusian ruler knows Russian intentions.

On the other side, Lukashenka understands that Russia does not show a good example of modernisation. Russia remains a country which strongly depends on its power resources, not on high-technology industry.

Expansion of Russias influence on Belarus is happening on the background of stagnation in the Belarus-Europe relationship. The regime cannot imagine how to improve relations with the West and not to lose its own face. The West suffers from the same problem.

It looks like the regime considers its reputation much more important than the economic independence of the country. According to Polish expert Wojciech Borodzicz-Smoliński "the Belarusian side should understand that putting its own independence in the game and blackmailing the EU is dangerous."

However, the Russian variant of modernisation looks much more secure in financial terms than the "European Dialogue on Modernisation", adopted by the European Union. Kremlin offers concrete money, which will let the regime survive for quite a long time, although it will happen at the price of gradual succession of the Belarusian independence.

The European politicians cannot send a message which will be heard with interest by the Belarusian regime. Talks about the democratic values and human rights do not find any response in the Belarusian officials. If the EU and the U.S. want to influence the regime, they should offer money - the only thing the official Minsk will definitely react to.