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Reference ID Created Released Classification Origin
06MOSCOW12600 2006-11-24 10:38 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

DE RUEHMO #2600/01 3281038
P 241038Z NOV 06

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 012600 
E.O. 12958: DECL: 11/24/2016 
REF: MINSK 1184 
Classified By: Deputy Chief of Mission Daniel A. Russell.  Reasons:  1. 
4 (B/D). 
1.  (C) Summary.  Another Putin-Lukashenko meeting has come 
and gone with few evident results.  It occurred against a 
widespread perception here that Putin would like to rein in 
Lukashenko as part of Russia's growing assertiveness. 
Unresolved problems, most notably those related to energy, 
plague the bilateral relationship, while after nearly a 
decade of posturing, a "Union State" remains only a distant 
possibility.  Lukashenko's populism resonates among Russia's 
disenfranchised rural dwellers which, some believe, creates 
low-grade anxiety in the Kremlin, where senior officials do 
not hide Putin's dislike of the Belarusian President. 
Gazprom's new, more market-oriented approach to Belarus is 
seen here as an inevitable, if painful phase in the bilateral 
economic relationship.  End Summary. 
Putin-Lukashenko: Tug of War 
2.  (C) The popular Moscow daily newspaper Kommersant 
characterized the November 10 three hour Lukashenko-Putin 
meeting as a "waste of time."  Reportedly on the agenda were 
Belarus re-exports of Russian oil to Europe and gas price 
increases.  Putin has publicly threatened to terminate 
current oil delivery arrangements, which allow Belarus to 
import crude oil without paying duties, refine the crude for 
export to third countries and then pocket the resulting 
export duties.  On gas, Russia wants significant increases 
over current prices for 2007 while demanding an interest in 
Beltransgaz, the Belarusian gas transport system.  The sides 
continue to wrangle over an appraisal of Beltransgaz's market 
value.  Belarus watchers told us that the discussions were 
Russia's Cold Feet, Belarus' Cold Winter? 
3.  (C) Carnegie Moscow Center's Nikolay Petrov argued that 
the new dynamic between Belarus and Russia, in which Moscow 
had put more pressure on Minsk, was fueled by changes within 
-- not outside -- Russia.  Russia's growing wealth had caused 
it to become more assertive.  At the same time, in his view, 
the color revolutions had made Russia feel vulnerable and 
spawned Moscow's efforts to exert more influence over its 
neighbors.  Gazprom's new approach -- raising gas prices for 
former Soviet states to market rates -- was a clear 
reflection of this, as was Russia's pressure on oil export 
duties.  Petrov thought that for Lukashenko, this change of 
heart on energy subsidies on Russia's part was unacceptable. 
Aleksandr Fadeyev of the CIS Institute claimed that 
Lukashenko continued to believe that Putin could simply order 
Gazprom to set a gas price at a certain level.  With ten 
percent of its national outlays spent on gas, the GOB 
considered further price increases as an attempt to drive 
Belarus to bankruptcy.  The experts we spoke to believed that 
Belarus' attempts to find another energy supplier -- Iran, 
Venezuela -- would be unavailing, but, as in the past, it 
would somehow manage to strike a deal with Russia. 
How to Deal with Luka? 
4.  (C) MFA Deputy Director Victor Sorokin told us after the 
November 10 meeting that there were two ways to deal with a 
regime like Lukashenko's: 1) isolation in an effort to impose 
European standards; 2) or a dialogue designed to edge Belarus 
closer to those same standards.  He argued that the first 
approach, which is preferred by the EU and the U.S., would 
produce no results, while Russia's patient engagement will 
eventually bring change.  (Comment:  Sorokin had little else 
to share about the meeting, which reflects in part the MFA's 
marginal role in setting Belarus policy.) 
5.  (C) Other interlocutors disagreed about the possibilities 
for change.  Andrey Ryabov of the Institute for World Economy 
and International Relations (IMEMO) warned against a 
simplified view of Lukashenko.  "He is not a marionette which 
Russia can easily control.  He is a seasoned politician who 
knows how to manipulate the media and the public."  Aleksandr 
Fadeyev of the CIS Institute seconded Ryabov, offering as 
evidence a September gathering of Russian regional 
journalists in Minsk at Lukashenko's invitation.  The 
journalists, he said, were entertained by Lukashenko for more 
than four hours, showered with gifts, and returned "smitten" 
with Lukashenko.  The journalists came from Russian regions 
where some continued to believe that Lukashenko personified a 
social "paternalism" practiced by an ideal leader, a 
conserver of Soviet values.  Irked by the visibly widening 
MOSCOW 00012600  002 OF 002 
gap between the rich and the poor in Russia, the journalists 
wrote for readers, Fadeyev said, who viewed Belarus with 
nostalgia as a place where everyone might be poor but were 
all equally poor. For them, dreams of a Union State were part 
of the nostalgia for a more just political structure. 
Carnegie's Petrov agreed that the Kremlin had good reason to 
ar the populist Lukashenko, who would be in power long 
after Putin left office, and who could at some point play a 
role in Russian politics. 
Weak Opposition 
6.  (C) While most observers viewed Lukashenko as a 
continuing irritant for Putin, they did not think Russia had 
any alternatives in Minsk.  Fedor Lukyanov, Editor of Russia 
in Global Affairs, pointed out two problems with the existing 
Belarusian opposition: 1) they were weak and not united and 
2) they were too identified with the West.  This left Russia 
with no option but to stick with Lukashenko.  Lukyanov 
stressed that the West, too eager for any sign of a 
democratic movement, clung to weak opposition figures such as 
Milinkevich and Kozulin when they had no meaningful power 
base. Lukyanov thought that the EU's biggest mistake in 
trying to influence what happened in its neighborhood was to 
close the door on further EU expansion.  Any talk of future 
entry to EU, however unlikely, might have worked as a strong 
incentive for Lukashenko. 
Union State:  Going Nowhere? 
7.  (C) Most of the expert community in Moscow saw progress 
on the long-planned Union State as halting.  Both sides paid 
lip service to the goal, but Lukashenko would not accept 
Belarus becoming just another Russian region and Putin was 
not prepared to consider Belarus Russia's equal. Observers 
alleged that there was a clear divide in Russia between city 
dwellers, who scoff at the concept of a union, and some in 
the provinces who supported it.  In any event, many Russians 
considered Belarus "somehow" part of Russia.  Konstantin 
Eggert of BBC Moscow saw an opportunity for Putin to create a 
legacy for himself by pursuing the Union State idea.  He 
repeated speculation that Putin could re-create a Soviet 
Union-like structure, and perhaps find himself a new job in 
the process as head of the new organization when his 
presidential term expires in 2008. 
Whatever Comes Next, No Conflict with Belarus, Please 
--------------------------------------------- -------- 
8.  (C)  While Russia might push Belarus hard on energy 
issue, the observers we spoke to argued that there were 
limits to such pressure and that Minsk was aware of this. 
Aleksey Vlasov of Moscow State University (MGU) held that 
conflicts with Belarus were not beneficial to Russia. 
Belarus was a small, isolated, underdeveloped country which, 
for its survival, depended on its "transit" function between 
Russia and the West.  It could not be ignored and abused by 
Russia, he said, or there would be negative consequences for 
Russia.  While a handful of Belarusian "dissidents" in 
Moscow, headed by Valeriy Pavlov of the Dionis Club, dream of 
overthrowing Lukashenko, we could not find any expert who 
thought they had much sway with the Kremlin.  While Moscow 
kept a watchful eye on them, it did not seem to influence 
their activities.  Nor would anyone speak to the possibility 
that someone in Lukashenko's ruling circle could be turned. 
9.  (C) Moscow is clearly trying to redefine the relationship 
by exerting growing pressure on Minsk.  Beyond the core issue 
of energy, there are many levels of political dissonance 
between the two, spurred in part by Putin's intense personal 
dislike of Lukashenko, which senior Kremlin officials do not 
disguise in their conversations with us.  At the same time, 
Moscow is aware that there are limits to what it can get from 
Belarus and is cognizant as well that, from its perspective, 
there are no appealing alternatives to Lukashenko's rule. 


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