As expected, the meeting between Presidents Alexander Lukashenko and Vladimir Putin, held in St. Petersburg on December 20, did not bring breakthrough results. The need to resolve the issue of preferential energy supplies being provided by Russia to Belarus still remains on the agenda. It would not be an exaggeration to say that the prospects for economic growth in Belarus, as well as the ability of the country to draft a budget or forecast revenues, depends significantly on prices for Russian gas and oil. The issue of compensation for a tax manoeuvre in the oil industry, as well as the price of gas, are raised regularly by Belarus. In previous years, the integration process within the framework of the Eurasian Economic Union has repeatedly been held hostage to this situation. Each time, the issue was resolved, if not completely, in favour of Belarus, taking into account the short-term needs of its economy.
The Belarusian leadership is interested in maintaining political control over the nation’s economic resources, while at the same time gaining a comfortable trade regime and low-cost energy resources from Russia. Russia, meanwhile, has a vested interest in linking Belarus to Russia in longer-term ways, rather than in loans or discounts on gas and oil. This function is connected with both obligations within the EAEU and deepening integration within the Union State. In both cases, Russia seeks uniform rules and shared institutions. At the same time, the issue of including Belarus in the Russian Federation is hardly realizable, despite the obsession with this topic among the Belarusian and Western expert communities. Such a scenario is unlikely, and its negative consequences are obvious. They would include the further deterioration of relations between Russia and Western countries, and a sharp increase of anti-Russian sentiment in the Republic of Belarus itself, as well as military and strategic problems.
Nevertheless, every year Russia takes an increasingly tough stance regarding the need for reciprocity in the integration process. According to publicly available information regarding the current “roadmaps” within the framework of the program for deepening integration in the Union State, the plans are very ambitious. They would entail a single tax law, a shared trade policy, banking supervision, a shared oil and gas regulator, etc. Such a “reset” of the Union State could provide an answer to the scepticism that has grown significantly in recent years regarding the advisability of this association in the context of the already existing integration process within the EAEU.
The signing of the “roadmaps” may well take place in the short term. Formally, this will be an important event in the development of the Union State. At the same time, the signing will only become a real breakthrough if the implementation of the agreements follows. All previous experience in union building warns against excessive optimism. The prospects for the full implementation of the “roadmaps” depend not only on subjective political factors, but also on economic circumstances. For example, the long-term imperative is to keep the Belarusian leadership’s control over the country's economy, since it is the specifics of the socio-economic model that makes a significant contribution to the stability of the political regime. The short-term ones include the upcoming presidential election in Belarus (2020). The current president is going to participate in them, which means the need to listen to the opinions of various groups of the population regarding Russian-Belarusian rapprochement.
As for economic factors, despite the impressive volume of mutual trade and in-depth interaction in other areas, the economic systems of the two states and their economic policies are considerably different from each other. You can try to dock them in formal issues (for example, in approximating tax laws), you can reach an agreement on certain issues (for example, cancelling roaming service). But the emergence of contradictions and fragmentation of the formed “united” spaces is inevitable, when we talk about the essence of socio-economic models, about the main instruments of control over economic resources, and about the role of the state in the economy. This has all been clearly demonstrated in the establishment of the Customs Union and the Common Economic Space of the Eurasian Economic Union. Incidentally, the need to synchronize this process with plans for the implementation of the “Four Freedoms” within the EAEU will also become another difficult issue in case of a deeper integration within the Union State.
Written by Yevgeny Treshenkov
Eurasia Diary reports citing Vladia Club
