06MOSCOW6065, SQUEEZING BELARUS, BUT NOT UNTIL IT POPS

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Reference ID Created Released Classification Origin
06MOSCOW6065 2006-06-07 04:45 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO0237
PP RUEHDBU
DE RUEHMO #6065/01 1580445
ZNY CCCCC ZZH
P 070445Z JUN 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 7226
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 006065 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 05/23/2016 
TAGS: PREL PGOV BO RS
SUBJECT: SQUEEZING BELARUS, BUT NOT UNTIL IT POPS 
 
REF: A. MOSCOW 3035 
     B. MOSCOW 1171 
 
Classified By: Minister-Counselor for Political Affairs Kirk Augustine. 
  Reasons: 1.4(B/D). 
 
1. (C)  Summary.  Moscow's embrace of Lukashenko before and 
immediately after his March 19 reelection has tightened into 
a clench.  Analysts here agree the GOR has sent a blunt 
message to Lukashenko: he needs to move from talk to action 
on at least economic integration.  Some observers see 
Moscow's approach as a sign Putin is "playing the Union State 
card" as part of his presidential succession strategy, and 
others suggest the Kremlin is pursuing both Union State (as a 
maximum benefit) and control over state-owned energy company 
Beltransgaz (at a minimum).  Other CIS-watchers think Moscow 
chiefly wants economic benefits from Belarus, contending that 
there is insufficient support in either country for pressing 
to make the Union State a reality in the short term.  One 
experienced CIS observer predicts Russian-Belarusian 
relations will remain at an impasse, as Lukashenko draws on 
his ample experience in resisting Moscow's pressure.  While 
the pressure has been stepped up, we expect Putin will take 
care to avoid pushing Lukashenko to point of destabilizing 
Belarus.  In the lead-up to the G-8 summit, there is likely 
to remain little common ground between the West and the 
Russians on Belarus, since real steps toward democratization 
there would introduce risks Moscow is unwilling to accept. 
End Summary. 
 
Kremlin Strategy on Belarus 
--------------------------- 
 
2. (C)  Most observers with whom we have spoken in recent 
weeks agree that following the March election, the Russian 
government has sought to use its leverage on Lukashenko to 
extract significant benefits.  Independent Ekho Moskvy 
Editor-in-Chief Aleksey Venediktov told us Putin had laid 
down a blunt marker for Lukashenko, saying that gas prices 
would soon rise to world levels; that Russia wanted to 
conclude a comprehensive gas deal; and that Belarus should 
expect to become part of the Russian Federation.  A unnamed 
senior Kremlin official floated the same formula in the press 
May 15: "If Belarus wants cheap gas, it should become a part 
of Russian territory."  Beyond that, official Moscow has been 
mum on likely next steps.  The Russian MFA has has for some 
time been a source only of bland statements about bilateral 
relations, reflecting its marginal role in Belarus 
policymaking (ref B).  Security Council Deputy Secretary 
Zubakov and State Duma CIS Committee Chairman Kokoshin have 
recently passed over opportunities to comment on developments 
in Belarus, while other Russian officials -- notably, Federal 
Assembly International Affairs Chairmen Margelov and Kosachev 
-- have also kept relatively quiet on that issue.  Our 
contacts are interpreting the de facto "no comment" line as a 
sign the Belarus file has been moved into Putin's office. 
 
3. (U)  In the press, a May 12 Kommersant article (entitled 
"Lukashenko Is Being Readied For A Hostile Takeover" and 
citing unnamed Kremlin insiders) reported the existence of 
Presidential orders calling for "exhaustive measures" to put 
economic, financial, and trade relations with Belarus on a 
market-based footing.  Those measures began with Gazprom's 
renewed bid for Beltransgaz's pipeline network and its threat 
to sharply increase gas prices, the article said.  On May 26 
the same newspaper reported that Belarusian Prime Minister 
Sidorskiy had sent Russian Prime Minister Fradkov a letter 
complaining that the foundations of the Union State were 
being undermined by Russian policy.  Fradkov was "not 
hurrying" to respond to Sidorskiy's letter, Kommersant 
reported. 
 
Is It A Push for Anschluss... 
----------------------------- 
 
4. (C)  Against that background, some here speculate that 
10-year old plans for a Russian-Belarusian Union State may 
have a new lease on life as a potential succession vehicle 
for Putin.  BBC Moscow Bureau Chief Konstantin Eggert told us 
he did not discount that Putin's sharp message to Lukashenko 
was a sign the Kremlin is "playing the Union State card" as 
part of its succession strategy.  Eggert said Deputy PM and 
Defense Minister Sergey Ivanov had hinted to journalists in 
an off-the-record meeting in February that relations with 
Belarus would soon undergo a change.  Heading the Union State 
would offer Putin the "cleanest possible" way to stay in 
power after 2008 and consolidate his legacy, Eggert argued. 
In that scenario, Gazprom's threats to treble the price of 
Russian gas deliveries to Belarus would be intended to force 
Lukashenko from power and give the people of Belarus a chance 
to express their "free will" (on the assumption they would 
approve the Union State).  Eggert thought Belarusians would 
 
MOSCOW 00006065  002 OF 003 
 
 
in fact favor the Union State by a 60-40 majority, if sops to 
Belarusian "sovereignty" were included.  The West would be in 
a poor position to criticize market pricing or a Union State 
endorsed by a free vote of the Belarusian public. 
 
5. (C)  Dmitriy Oreshkin, an analyst with the Mercator Group, 
agreed that the Kremlin is eager to move forward with the 
Union State negotiations.  Concluding a Union State treaty, 
he pointed out, would solve the "third-term dilemma," 
effectively remove Lukashenko (whom he called an 
"embarrassment" to the Kremlin) from power, and thereby 
position Russia as the "savior of democracy."  The West (or 
at least many Europeans), such thinking goes, would even be 
grateful to Russia for removing the last dictator in Europe. 
But Oreshkin did not believe Lukashenko would give up power 
voluntarily, and (unlike Eggert) he thought an overwhelming 
majority of Belarusians would strongly resist the Union. 
 
6. (SBU)  Center for Political Technologies Director Igor 
Bunin suggested the Kremlin is pursuing a "multi-vectored" 
approach aiming at a Union State (as a maximum goal) and 
control over Beltransgaz (as a minimum).  He suggested that 
the Kremlin sees the creation of a genuinely functioning 
Union State, in which Belarus would fall de facto under the 
sovereignty of Russia, as the only alternative to a 
pro-Western path of development in Belarus after the next 
election.  In the near term, Bunin predicted 
Russian-Belarusian relations could undergo a period of open 
conflict, with Lukashenko dialing up his anti-Russian 
rhetoric and Moscow increasing economic pressure, perhaps 
even by turning off gas supplies before next January. 
 
...All About Economics... 
------------------------- 
 
7. (C)  Other analysts told us that for Putin, economic 
integration -- including control of Beltransgaz, a single 
currency and access to Belarusian state assets -- was highest 
on the bilateral agenda.  RFE/RL CIS correspondent Vitaliy 
Portnikov saw the Kremlin's call for integration as "chiefly 
economic," but thought Lukashenko would not ink the Union 
State treaty or sign away Beltransgaz's pipelines, since 
either move would mean giving up political control.  More 
likely, Portnikov said, Lukashenko would do everything 
possible to extend Union State talks past 2008, at which 
point he would expect to have a new negotiating partner in 
Russia. 
 
8. (C)  Moscow-based opposition leader and former Belarusian 
General Valeriy Pavlov said the Kremlin saw Lukashenko, with 
some justification, as an impediment to economic integration 
and wanted to exchange him for "someone more reliable."  Talk 
of the Union State, Pavlov maintained, is driven by the force 
of inertia.  Pavlov supported proposals to trade 
Beltransgaz's pipelines for upstream assets or other 
concessions.  After all, he contended, if Russia redirected 
gas transport through the Baltic Sea pipeline, Belarus could 
lose revenue and its role as gatekeeper.  Given what he 
described as broad dislike for Lukashenko and united 
opposition leader Milinkevich's lack of charisma, Pavlov put 
forward former Presidential candidate Kozulin as the best 
possible "compromise candidate" to replace Lukashenko.  He 
added that Lukashenko had kept Kozulin -- unlike Milinkevich 
and Communist Party leader Kolyakin -- in jail because he is 
genuinely afraid of the political traction that Kozulin has 
with ordinary Belarusians.  (Pavlov said he is putting 
together a group of Russian human rights advocates to protest 
Kozulin's ongoing detention, and asked why the U.S. had not 
joined many European countries in condemning the illegal 
jailing and calling for Kozulin's release.) 
 
9. (C)  Olga Potemkina, Head of European Integration Studies 
at the Institute of Europe, said Lukashenko's foreign policy 
was unpredictable and interfered with forging stronger 
economic ties.  Lukashenko was a "bad ally for Russia" who 
needed to be "put in his place."  Eliminating subsidies to 
the Belarusian economy would be the first step in doing that. 
 Potemkina saw no need for Western help in that effort, 
terming U.S. and EU visa restrictions on GOB officials a 
"violation of human rights."  Potemkina thought there was not 
enough support in Russia or Belarus for ratification of the 
Union State treaty. 
 
...Or Business As Usual in the CIS? 
----------------------------------- 
 
10. (C)  CIS Institute Belarus Section Chief Aleksandr 
Fadeyev told us he was not convinced Russia's Belarus policy 
had entered a new phase.  Two earlier gas rows with Belarus 
had occurred, the Union State negotiations have already 
dragged on for ten years, and the two countries have still 
not reached an agreement even on common citizenship. 
 
MOSCOW 00006065  003 OF 003 
 
 
Lukashenko wanted union only on his own terms, Fadeyev said, 
and even in Russia there was little taste for genuine union, 
since that would bring Lukashenko's entourage to Moscow and 
give the odious dictator -- who is popular in the Russian 
provinces -- entree into Russian politics.  Council on 
Foreign and Defense Policy head Sergey Karaganov told a 
recent Washington visitor that all talk of a Union State 
foundered on the key unresolved issue of what Lukashenko 
would do the day after the Union State was formed.  Until 
that question was resolved, the Union State would not go 
forward. 
 
11. (C)  CIS watcher Fadeyev acknowledged that raising gas 
prices sharply would hurt the Belarusian economy, but the 
impact could be undercut, he said, by possible Chinese 
credits offered to Lukashenko during a trip to Beijing.  In 
any case, Lukashenko would be willing to sacrifice Belarusian 
GDP for a continued hold on power -- a point on which Fadeyev 
and Portnikov agreed.  Unlike Russians or Ukrainians, Fadeyev 
said, the Belarusian people still enjoy a high degree of 
economic equality and tough times would hit everyone equally, 
making unrest unlikely.  Fadeyev also thought Western 
sanctions would not bear fruit since, Lukashenko is already 
quite accustomed to being isolated.  Nor did Fadeyev believe 
local elections this fall would provide further impetus to a 
nascent revolutionary spirit in Belarus, as they will be 
tightly controlled by the regime. 
 
Comment 
------- 
 
12. (C)  Despite Putin's well-known personal antipathy to 
Lukashenko, Russia supported his reelection this spring to 
preclude any possibility of a Belarusian drift out of a 
Moscow-centric orbit.  With that danger temporarily removed, 
the Kremlin has now stepped up the pressure on Lukashenko to 
pay up.  It is impossible to dismiss out of hand a Union 
State succession scenario designed to keep Putin in power 
after 2008, but that option would sharply raise the number of 
variables the Kremlin would have to keep under control.  It 
would entail, e.g., convincing Lukashenko to go quietly (or 
orchestrating his removal against his will) and organizing 
"free and fair" -- and positive -- referenda in both Belarus 
and Russia to dilute Western criticism.  The 
"retaining-power-via-a-Union-State" scenario also implicitly 
presumes that Putin in fact wants to remain in office, which 
we (
and most analysts in Russia) do not assume. 
 
13. (C)  Our sense is that pressing for political integration 
remains at this time primarily an instrument for eliciting 
acquiescence to the maximum possible Russian influence over 
the Belarusian economy, above all in the gas sector -- though 
well-placed Russian officials and businesmen reportedly see 
Belarusian state property (yet to be privatized) as cherries 
ripe for picking.  Achieving real movement toward political 
integration would of course be an historic achievement in 
Russian eyes if successful, but Putin would have to worry 
that pushing Lukashenko to the wall could initiate an 
unpredictable dynamic leading to chaos, anti-Russian 
activities, or even the emergence of a Westward-leaning 
government.  That kind of high-risk undertaking seems 
unlikely as Putin heads for the barn. 
 
14. (C)  Ideally, the Kremlin would like to squeeze 
Lukashenko quietly, beyond the effective range of prying 
Western eyes and wagging Western tongues.  The GOR has 
accordingly resisted a "Belarus" agenda item for G-8 
discussion.  We expect Moscow to continue to play a double 
game, "protecting" Belarus from "outside interference" while 
pressing to extract maximum economic concessions, without 
creating a power vacuum in Minsk into which Western air could 
seep or rush. 
BURNS

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