Wednesday, December 13, 2006

Capitulation to Russian oil...

From an anonymous commenter:

In today's news we see that Russia is increasing export duties to its oil to Belarus to the level it charges other countries, which means that Belarus will no longer make a killing by re-exporting Russian oil it got on the cheap. It also means that the Union State is dead, as this was one of its "perks".
We have been debating for a while how Belarus would weather an end of Russian subsidies (estimated by the Harvard Review at anywhere between 10% to 20% of its GDP). My prediction is that the economy will take a severe hit, and Lukashenka will turn on Russia ceaselessly denouncing its perfidy, in the process souring Belarusians on Russia. Which will earn him points with the West, but I don't know that it'll be enough for them to forget about the "last dictator" in Europe stuff. I think Russia understands very well that this may cost her the "loyalty" of the last major country in Europe allied with her. However, the loyalty of Belarus has always been more about getting hand-outs than true friendship. So Russia will now just rather take the money owed to it, thank you very much.

Yes, it has seemed lately as though the issue of forming the Union State was solely and entirely to create a relationship with Russia that would allow for prices similar to that which Russian territories pay for oil and gas. On the Russian side, there are many who have been saying that Russia has been losing a fortune by subsidizing several CIS countries in this way; oil of course being one of the prime resources which finance modern Russia.

However, without sounding as if I am only arguing semantics, I am not so sure that Belarus has made any sort of "killing" with the deal it has had so far, though there has been some minor level of prosperity because of it. I am also not really sure that this will be the issue that sends Belarus towards the west, which is the main thrust of your point.

Belarus has been trying to make as many contacts with foreign countries and potential investors as it can and in fact seems to have made pretty good friends with the Chinese- a lot of people like to do business with them, by the way- the Iranians, Azerbaijan, Viet Nam, Cuba and of course Venezuela, amongst others. Certainly this list would seem to be a rogue's gallery to Americans, but nevertheless, these people have agreed to buy weapons, clothes, tractors and to build large scale projects here. Certainly oil is the most profitable tool, but these other things are also real commodities which generate revenue. Belarus has also argued against American sanctions (i.e., has extended its hand to the Americans) simply because the inability to trade openly on the markets only decreases Belarus' ability to be independent and increases their dependency on the Russians. But of course as you have also seen in the news this week, the Americans are continuing to be bastards as well.

So in the end, though I think your point is a reasonable one to make, I think it is a bit short sighted and one that asks for an overly simple solution to a much more complex situation. Lukashenka has already announced publicly that next year might be a difficult one financially. However, rather than begging from the west for answers to these issues, over the last year he has expressed interest in funding nuclear power as a way of differing that same 20-25% you spoke about of Belarusian energy requirements and he has made as many associations as possible with other foreign countries to try and diversify Belarus' interests. Certainly Russia is playing a game of hardball based upon the fact that they hold the upper hand on their "finite" resources and want as large a profit from them as they can get. But even in the worst case scenario, I think that 83% of the voters specifically will want to solve the problems of Belarus' future themselves. I think they agree with how their president is going about working for their futures and will agree to weather the tough times without capitulating to western demands. I believe this is so because they have gone through 15 years of poverty and neglect already because of a lack of decent and fair potential business with the west and I don't think that a year or two of fresh paint and new flower beds will have made them so soft that they will cave now. And besides, none of the previous few years of prosperity came as a result of anything from the west anyway; what makes you think they have anything to be grateful for from them now?


Anonymous Anonymous said...

Well, we'll see. According to this story,
the change in Russian policy (with oil companies already looking into switching to refining within Russia), the economic activity of refining Russian crude for re-export was worth about 8% of the GDP of Belarus. Similarly, it accounted for $1.7B in revenues of a $15B state budget.
The Belarussian response is typically cynical. They are squeaking about Russia "breaking" the free-trade accord. What they fail to mention is that the proceeds from the oil refining was supposed to be divided between both republics. Even if we assume that the split would be 50/50 (although Russia has been pushing for an 85/15 split), we are talking about billions of dollars that should have been coming to the Russian budget. Belarus has *not* transfered a single ruble since 1995 to the Russian budget on this account. So the position of Russia is simply that it won't be taken for a fool any longer. Lukashenka has amply demonstrated that all his talk of Slavic brotherhood was simply a scam to continue to sucker Russia into passing him billions of dollars a year to prop up his regime and innefficient economy.

Thursday, December 14, 2006  
Blogger BEING HAD said...

Yes, as you say, we will see. But your point in singularly pro-Russian as it was on the comment I based the article on. At moments like these when many, many people are waiting on the results of this deal, let us not forget that the pro-Russian news sources are very eager to please their readers in much the same way that most profit based journals will. "Tell 'em what they wanna hear", that's the way to sell newpapers. Sun Su taught us that it is essential to have the moral high ground in a war- if the Russians are now pushing this as an excuse for trying to gouge each and every kopek they can find from the oil business before it is all gone- (and it will be gone!), I think we might better refer to this news as P-r-o-p-a-g-a-n-d-a!

And even though Lukashenko has told us that the Union will be no matter what and that most of the legislation is already there anyway, I still disagree as to the future you are waiting for. Even if you are right and they pull the plug on the Union State over this, Belarus will just keep on chugging along. They have been finding a way to get it done without for a decade and a half. And if they go ahead and keep that green border anyway, hey, It only means that Belarus gets an influx of drunks, drug dealers and other Russian exports more redily than before, and our own guys can get raped and robbed by the Moscow mofia more quickly and easily than ever.

But hey, I ride a bike: Shows you what I think of the oil business.

Thursday, December 14, 2006  
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Monday, January 22, 2007  
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Sunday, January 28, 2007  
Blogger BEING HAD said...

I normally don't care for anonymous comments, but as you are being so complimentary and observant, I guess I can let this one in…

Sunday, January 28, 2007  

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