Mon, Jan 01, 2007 - Page 6 News List

Gas dipute reflects strain in ties


Simmering beneath the natural gas price dispute between Moscow and Minsk is a struggle over the future of Belarus, whose longtime leader has used cheap Russian energy to help maintain his grip on power.

Moscow wants Belarus, which now buys Russian gas for US$47 per 1,000m3, to pay US$75 this year -- and far more in the ensuing years -- as well as handing over a half share in its pipeline network, which carries gas to Europe.

The Russian state gas monopoly, OAO Gazprom, is threatening to cut off supplies to Belarus today if a new contract is not signed. Belarusian President Alexander Lukashenko on Friday called Gazprom's conditions "blackmail" and said Belarus would not give in.

Lukashenko, an open admirer of the Soviet Union, has kept Belarus's economy largely under central control, and its industries depend on cheap Russian gas to remain competitive.

The dispute reflects severe strains in ties between the neighbors, which are rooted in centuries of Slavic, Orthodox Christian and Soviet culture but have been frayed by an ongoing power struggle between Lukashenko and Russian President Vladimir Putin's Kremlin.

In the mid-1990s, Lukashenko and former Russian president Boris Yeltsin signed a treaty to bind the countries together in a "union state" -- a move that allowed both leaders to show their people they were restoring traditional ties damaged by the 1991 breakup of the Soviet Union.

But since Putin became Russian president in 2000, he has shown little interest in a union on equal terms.

In 2002, he infuriated his counterpart by offering a union plan under which Russia would essentially absorb its smaller neighbor, leaving Lukashenko as little more than a provincial governor.

Since his first term, he has campaigned to win for Gazprom a half share in Beltransgaz, the Belarusian pipeline operator, which would give Russia more control over both deliveries to Europe and distribution within Belarus.

Ties between Belarus and Russia remain close. With leaders in several other former republics turning toward the US and EU, the Kremlin cherishes its western neighbor as a military ally and a buffer against the expanding NATO alliance.

But there are signs of growing Kremlin frustration with Lukashenko -- a pariah in the West because of his suppression of dissent and persecution of political opponents -- and an increasing feeling that he is taking advantage of Moscow's support without giving enough in return.

Although Moscow supported Lukashenko when he won a third term in March after scrapping term limits, giving a victory derided in the West as a farce a seal of approval through a Russian-dominated observer group, some observers see the Kremlin growing tired of Lukashenko.

"The Belarusian economy could just collapse, and all this prosperity that was created over the years with cheap gas could evaporate -- and of course that would be followed by a collapse in the rating of Lukashenko and apparently a search for a new leader, who could lead Belarus on a new trajectory of relations," a pro-Kremlin analyst, Andranik Migranyan, said on Friday on Russia's state-controlled Channel One TV.

Under Gazprom's pricing plan, gas prices for Belarus would rise further over the ensuing years and reach close to those paid by European customers by 2011 -- the year of the next presidential election.

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