29 October 2020, Thursday, 5:42
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The Game Of Thirty One

The Game Of Thirty One
IRYNA KHALIP

Lukashenka needs $ 50 billion from Moscow.

The end of last year did not bring any integration sensations: the December meetings of Aliaksandr Lukashenka and Vladimir Putin, announced as fateful, with the signing of a package of integration documents and the beginning of a new life, did not take place. Rather, they took place, but not in the fateful format. However, what can we say about integration, if even for the first time in the history of bilateral relations the parties could not agree on the prices of oil and gas?

First, Aliaksandr Lukashenka and Vladimir Putin met on December 7 in Sochi - a day earlier than the planned celebration of the twentieth anniversary of the union treaty. It was assumed that on this day they would sign the mysterious road maps, which had been talked about for a year, and the next day, December 8, there would be magnificent integration festivities. But after negotiations, Aliaksandr Lukashenka got on a plane and flew away. There was not even a joint press release with the usual “we are brothers forever and continue to work”. Only Head of the Ministry of Economic Development Maxim Oreshkin then said that the parties had reached a serious rapprochement of the positions on oil and gas.

The next day, both Minsk and Moscow showered the public with press-releases about the next meeting, which will be held on December 20 in St. Petersburg, and then everything will be definitely signed and celebrated. Prime Minister of Belarus Siarhei Rumas regularly reported on the progress of agreeing on the road maps: in November, he said, 20 out of 31 maps were agreed, and in December already 30 out of 31. All of these road maps remained closed to citizens, their content was only reported approximately : like, they agreed on energy, customs, roaming ...

But on December 20, a meeting of the Eurasian Economic Community and an informal summit of the leaders of the CIS countries were held in St. Petersburg - and again nothing fateful.

True, Aliaksandr Lukashenka tried his best to inspire oil and gas optimism: “We agreed on volumes, and agreed on oil, that we will buy 24-25 million tons of oil from Russia. Prices will not be higher than the current 2019 level ... There will be a set price for oil in two days. And for gas, I think, in two or three days. On Tuesday, experts will meet at Gazprom, and there will already be specific numbers. But in general, the price remains at the current year level.”

The press-centers hastily announced that the next meeting for the integration negotiations would be held on December 29, but it did not take place at all. On December 23, Dmitry Medvedev partially revealed the mysterious thirty-first roadmap: according to the head of the Russian government, it is about creating supranational authorities, a single currency and a single emission center. That is, for a long time, all the officials of both countries lied to Russians and Belarusians, assuring that the roadmaps concern only economic issues and do not touch upon sovereignty at all.

Aliaksandr Lukashenka simply hid the thirty-first roadmap in his fist, and promised that it would be signed after the oil and gas contracts were inked. But neither one nor the other were signed.

There has never been such a New Year’s night in Belarus. Even at the peak of the 2006 “gas war”, Minsk and Moscow signed a gas contract at 23.59 on December 31, a minute before the New Year’s bells started ringing.

In 2019, this did not happen. Rather, in the last hours of the year, Gazprom agreed to sign a contract for two months with maintaining the previous gas price - $ 127 per thousand cubic meters. And the annual contract was not signed for the first time in the history of the Belarusian-Russian relations.

In early December, Aliaksandr Lukashenka, speaking to the so-called deputies, was indignant: “What further integration can we talk about if we don’t have an agreement on natural gas supplies today?” The key issue of this round of trade was to reduce prices to the level of Smolensk region, that is, not 127, but 72 dollars per thousand cubic meters. Almost twofold cheaper. The argument for lowering the price was simple: the integration is equal conditions for business entities, and equal energy prices. At the same time, according to Aliaksandr Lukashenka, Gazprom insists on the price of $ 152 per thousand cubic meters - in case integration does not happen. In any case, it was this figure that Lukashenka called in an interview with Alexei Venediktov at the end of December.

With oil, too, so far nothing has happened. Russia offered to keep the prices and conditions of 2019, and Belarus insisted on compensation for the Russian tax maneuver, which it could not achieve over the past year. The losses from the Russian tax maneuver in the Belarusian government were estimated at $ 10 billion, but the Russian side proposes to talk about compensation only after the unification of tax legislation.

In addition, the allies did not agree on compensation for the Russian “dirty” oil either: Moscow is ready to compensate only for documented losses, Minsk insists on compensation for lost profits. And finally, the issue of bonuses for the suppliers: earlier it was $ 10 per ton, but Minsk refused to pay premiums amid the tax maneuver. Intensive negotiations at the end of December did not lead to the signing of contracts, and on January 1, Russia stopped supplying oil to the Mazyr and Navapolatsk refineries. The enterprises reduced the load to 30 percent, and continued to operate on stocks. At the same time, Belarus stopped export to meet the needs of the domestic market.

On January 3, a statement appeared on the Belneftekhim concern website: “The current situation is not the best stage in the economic cooperation with our Russian partners. So, taking into account the implementation of the next stage of the tax maneuver in the Russian Federation, the price of “cheap duty free Russian oil” today makes 83 percent of the world price. Of course, taking into account the compensation that the Russian Federation provides to its refineries, this negatively affects the disparity in prices on the domestic markets of Russia and Belarus.” And the very next day it became known that two Russian companies - RussNeft and Neftisa, which are part of the Safmar conglomerate owned by Mikhail Gutseriev, will supply oil to the Belarusian Naftan. The details of the contract were not disclosed. Moreover, it is generally not known whether a contract was signed between Belneftekhim and potential suppliers - or Lukashenka’s old friend Mikhail Gutseriev simply poured oil with a wide gesture without any papers.

Belarus for Mikhail Gutseriev is the same alternate airfield, which every Russian billionaire is simply obliged to acquire. Although temporary, it’s more reliable than Western countries: there, as recent history shows, they may be interested in the origin of money, freeze accounts and seize assets, and revoke an investor’s citizenship or visa. And in Belarus, any friend of the ruler with billions in his pocket can open the door to any government office with his foot and with confidence “bend his fingers” even with the minister, even with the prime minister. Therefore, Mikhail Gutseriev, just in case, has long made friends with Aliaksandr Lukashenka. And when Gutseriev in Moscow had the danger of being arrested on charges of tax evasion in 2007, he flew to London not from Moscow, but from Minsk, having spent a week before leaving in a cottage near Minsk, and received the most sincere assurances of eternal friendship.

Now Gutseriev is building a mining and processing plant in Belarus, not far from Lyuban, and Lukashenka has promised to rename Lyuban to Gutserievsk.

And so, step by step, the head of RussNeft acquired a household in Belarus: he built himself a hotel, a terminal at the airport, a recreation center, a business center, and he is also building a school and a church. So with the help of neighbors everything is clear.

There’s something more which is also clear. Integration, or no integration - this is the last thing on Lukashenka’s mind. There are secret conversations going on now, about something else. Belarus is to hold the presidential election (at least they call it so) this summer. And Aliaksandr Lukashenka, as usual, must secure financial support from Moscow for his entire seventh term, since it was on it that the previous six lasted. As far back as 2016, the IMF estimated Russia's total support for the Belarusian economy at an average of $ 10 billion a year. These figures have not changed.

So, Aliaksandr Lukashenka needs $ 50 billion from Moscow - for all five years of the seventh term.

And you say tax maneuver, bonuses to suppliers. Think bigger.

Iryna Khalip, Novaya Gazeta