The New York Times
January 12, 2007
Memo From Moscow
Belarus Learns That Days of Wine and Roses Are Over
By STEVEN LEE MYERS

MOSCOW, Jan. 11 – President Aleksandr G. Lukashenko of Belarus
appeared to be the last leader in the old Soviet neighborhood to
realize that he was dealing with a different Russia.

For much of last year, he dragged out negotiations on new gas and
energy deals, assuming that pleas of solidarity and Slavic brotherhood
– encapsulated in a dusty treaty that a decade ago envisioned a
glorious Union State of Belarus and Russia – would avert a steep rise
in prices.

It did not, and now Belarus faces the economic and political
consequences of Russia’s newly assertive, hard-knuckled effort to
cement its position as an energy power.

President Vladimir V. Putin, who spent the first seven years of his
presidency supporting Mr. Lukashenko, despite what is widely reported
to be an intense personal dislike, at last made it clear that the
rules had changed.

When it comes to supplies of energy, cash is czar.

And it underscores how Mr. Putin, whose critics accused him of
dabbling in Soviet nostalgia as he centralized his own political
power, has consistently sacrificed political links to the former
Soviet republics in pursuit of a new strategy. What Mr. Putin is
creating in place of the Soviet empire of ideology is a new empire
based on energy reserves and pipelines and, to his loyalists here,
unrelenting market principles.

`We are still getting rid of some legacy of the Soviet Union,’
said Vyacheslav A. Nikonov, director of the Politika Foundation, a
research institute with close ties to the Kremlin. Prices are rising
for everyone, he added.`I don’ t know why Belarus should be an
exception.’

Indeed, it no longer is.

A day after Belarus agreed to drop a transit fee of $46 a ton that
prompted Russia to turn off for three days a pipeline that moved oil
across Europe, the crude oil started flowing again on Thursday
morning, as did the Russian profits that Belarus had hoped to share,
as it had for the last decade.

These new deals – which more than doubled the price Belarus pays for
natural gas and imposed an export duty on oil shipments – will
generate billions of dollars of added revenue for the Russian energy
giant Gazprom , as well as Russia’s state and private oil companies,
much as recent deals did with Ukraine, Moldova and Armenia.

Mr. Putin has long faced criticism for wielding the country’s energy
resources as a weapon of geopolitics – `tools of intimidation or
blackmail,’ as Vice President Dick Cheney put it last year. Gazprom’s
similar showdown with Ukraine a year ago appeared to many to be a
punitive measure against President Viktor A. Yushchenko’s tilt toward
the European Union and NATO.

The shutdown of the oil pipeline through Belarus revived those
criticisms, but Mr. Putin’s ministers could fairly say that they were
now beingconsistent in demanding market rates for its natural riches.

`When a country has a cheaper price compared to European
consumers,then Russia is accused of bribing them,’ Viktor
B. Khristenko, the energy minister, said this week. `But when we want
to shift to market prices, then we are accused of blackmail.’

What is striking is the degree to which officials in Mr. Putin’s
Russia used the dispute over energy to turn on Mr. Lukashenko. He is
an autocrat who has created a dictatorship in all but name, but he
enjoyed wide political support from lawmakers here – even if it was
driven in part by a fear of the emergence of a Western-oriented
alternative, as happened in Ukraine with Mr. Yushchenko.

Last March, after tainted elections in Belarus denounced as fraudulent
in Europe and the United States, Mr. Putin praised the vote as fair
and congratulated Mr. Lukashenko. Less than two weeks later, Gazprom
announced that it would demand that Belarus pay more for natural gas.

On Thursday, Vladimir V. Zhirinovksy, the flamboyant Russian
ultranationalist leader better known for his denunciations of the
United States, called Mr. Lukashenko a dangerous man. `Lukashenko is
a petty tyrant, and thistyranny should lead to his resignation and a
new presidential election,’ Mr. Zhirinovsky said in an interview on
the state-owned Mayak Radio.

The collateral damage, if not the intended target, of price war was
the Russia-Belarus union treaty. It was negotiated in 1996 between
Mr. Lukashenko and a weakened Boris N. Yeltsin when Mr. Yeltsin faced
a bruising re-election challenge from the remnants of the Communist
Party.

In Russia, it was viewed as a populist attempt to win over those
voters lamenting the decline of the Soviet Union. In Belarus, it was
viewed as a vehicle for Mr. Lukashenko to become the leader of the
newly unified nation, a notion that quickly became moot with the
emergence of a strong leader like Mr. Putin.

In 2002 he dismissed Mr. Lukashenko’s constant public reminders of the
treaty ‘s existence by offering, in essence, to absorb Belarus’s
provinces into the Russian Federation. The offer was not well
received. `Lukashenko does not want to be the governor of a Russian
province,’ Anatoly Lebedko, one of the Belarussian president’s
fiercest critics, said in a telephone interview from Belarus on
Thursday.

Since then, the two countries have repeatedly postponed deadlines to
establish the Russian ruble as a common currency and to draft a
constitution for the union, which officials now describe as little
more than an economic alliance. The union has a bureaucracy and a
budget, but few of its promiseshave been accomplished.

Andrei V. Sharonov, a deputy economic development minister, blamed Mr.
Lukashenko, suggesting that he kept alive the dream of a union only to
justify the subsidized gas and oil Russia was providing.

`When there is nothing but talk for many years and no deeds,
preferences become meaningless,’ he told Rossiskaya Gazeta, the
official state newspaper, ` and we are justified in putting all these
things on a strictly economic footing.’

Russia’s new power centers – Gazprom, the pipeline monopolyTransneft
and the state-owned oil giant Rosneft – will almost surely continue to
press ahead, buying more and more assets at home and abroad, expanding
the country’s energy network as long as the reserves hold out.

Still, some question the cost of Russia’s tactics. Garry Kasparov, the
former chess champion and an opposition leader here, said in an
interview as the New Year’s confrontation unfolded thatthe worsening
of relations with Belarus `might have unpredictable consequences for
everybody.’

`I’m not a big fan of Lukashenko, as you can guess,’ he said, `but if
our government spoils relations with everybody, there is something
wrong.’

Copyright 2007
The New York Times Company ()