Pikulik Presentation

Relations. Towards
Prof. Dr. Alexei Pikulik
The agenda of the presentation:
• Mapping the contexts: Belarus as a rentier-state. The political
creation of the external rents.
• From the pre-elections rhetoric in the Russian media to the
post-election realism. Demystifying Russia's ambitions in
• When the political and the economic logic meet: Belarus as
the offshore zone for Russian business and the
geopolitical/integrational partner of Russia.
• What is next? The post 2012 election scenarios.
• The Belarus-Russian relations are generally non-transparent,
hence the presentation will contain certain speculative
arguments and assumptions.
• Yet, we have enough evidence to see the forest beyond the
trees and to draw the conclusions, although the data is not
alwasy that hard.
Mapping the contexts: the receipt
of Lukashenka's political survival
(the pre-2011 trend)
• Politically create the external economic rents
needed for maintaining an inclusive autocracy.
• Tunnel the rents into the economy to maintain a
socialist-mixed welfare state.
• Preempt democratization (learning from the
fellow autocrats), by making a) exit simple, b)
protest expensive and c) loyalty lucrative.
The sources of the external rents
(up to 30% of the GDP):
• Discounted oil refined in Belarus and exported to the EU
(Russian companies used Belarus as the oil offshore since
early 2000s)
• Discounted gas (products competitive pricewise)
• Unlimited/administratively stimulated demand for
Belarusian goods on the Russian market
• Assymetrical interstate institutions with Russia
(loopholes in the customs institutions, smuggling, barter,
price arbitrage, etc.)
• OVERALL: The Russian budget was the sponsor of the
'Belarusian economic miracle'.
The pre-eleciton anti-Lukashenka
rhetoric in Russian media.
• To lower down Lukashenka's approval rating in
• To send a signal to the Belarusian political elites (in
case anyone would volunteer to become a
• To get extra levers on Lukashenka
The three main myths about
Russia's ambitions in Belarus:
• Russia wants to absorb Belarus politically.
• Russia wants to privatize the Belarusian
economy for 1 dollar. (sad story in
• Russia's main existential fear is that
Belarus might re-open the dialogue with
the West.
Towards the realism:
• Belarus is a key-partner in the new integrational
game of Vladimir Putin.
• (key-point) Economic rents are made available to
Lukashenka again via loopholes in the Custom's
• Russia wants to increase its ROI in Belarus via
rationalization of the economic relations.
• Russia wants economic reforms in Belarus and will
welcome turning Belarus into a new quasi-offshore
Belarus as the new offshore zone
for Russia?
• In the light of the capital flight from Russia (estimates are
about 60 bln USD/year) AND
• In the light of the new conditions for Russian capital is
Switzerland, Luxemburg and Latvia, there is a need for a
new offshore
• Belarus is turning into one (i.e. Gambling, banking
operations, oil trading, etc.)
The political implications
• The Western leverage/linkage are diminished by the
Russian game—hence-- the political warming up might
be postponed for another 6 months.
• In the light of the crisis, and the society 'standing in
between', there is less chance for the managed
democracy to come about in Belarus.
• In the light of the diminishing rents from Russia, the
regime is turning into an exclusive autocratic: rents are
not given away generousely to the many, but the access
to rents is granted to the some.
What's next?
-Russia will increase its pressure on Belarus after 2012
-But will it be really able to afford supporting the
integrational allies?
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