Belarusian President Alexander Lukashenko, left, walks with Russian President Vladimir Putin after a meeting in the Black Sea resort of Sochi last week. Photo: AFP / Valeriy Melnikov / Sputnik

It looked like a surprisingly amicable bout in a strongman versus strongman competition. “Completely independent states do not exist,” Russian President Vladimir Putin stated during the latest talks with his Belarusian counterpart, Aleksandr Lukashenko.

The two leaders were discussing prospects of their two nations’ integration. “All countries are interdependent,” added Putin – almost certainly a reference to Belarus’ dependence on duty-free oil exports from Russia, the halting of which has sparked tensions between the neighbors in recent times.

According to observers, the Kremlin has been using economic pressure to try to to convince Belarus to gradually give up its sovereignty and merge with Russia into a single unified state.

Lukashenko, who has been leading Belarus as “Europe’s last dictator” since 1994, was as diplomatic and ambiguous as he always is when dealing with his powerful eastern neighbor. “We’re ready to unite and consolidate our efforts, states and peoples as far as you are ready,” he said. Yet, he said, Belarus’ sovereignty is “sacred” and not open to question.

In a previous meeting last December, Lukashenko’s tone was harsher. He openly accused Russia of using tariffs on oil exports as a way to blackmail Belarus and undermine sovereignty: “I can read between the lines and I understand the hints,” he said in front of the Russian press. “You should just say it out loud: Destroy the country and become part of Russia.”

No integration? No subsidies!

Belarus (“White Russia”) is a land-locked country to the south of the Baltic States, east of Poland and west of Russia proper. But with its population of 9.4 million and a GDP of $201 billion last year, it is a minnow compared to giant Russia, with its population of 146 million and a GDP of $4.3 trillion.

Formerly part of the Soviet Union and before that, the Russian Empire, Belarus acquired independence in 1991, following the collapse of the Soviet Union. Together with Kazakhstan, Armenia and Kyrgyzstan, it is now part of the Russia-led Eurasian Economic Union. As such, Belarus has been able to import tax-free oil products from Russia, refine them domestically and resell them to the West at market prices.

However, last June, Russia announced that energy subsidies to Belarus would be halted, presumably because they had become too much of a burden for an economy squeezed by Western sanctions. The oil tax maneuver is a significant blow for Belarus’ state budget, which could lose around $10 billion by 2025.

Minsk’s attempts to be compensated for these losses have yielded no concrete results. In December, Putin said clearly that if Belarus wants to keep its trading privileges with Russia, it should move further along the path to integration.

“Russia is ready to continue to advance along the path of the construction of the Union State,” Russian Prime Minister Dmitry Medvedev said during a visit to the Belarusian city of Brest. Medvedev was referring to the 1999 Union Treaty, which envisioned a merger of the two nations into a single federal entity called the Union State of Russia and Belarus, with a common money issuing center, customs service and judiciary.

However, little progress has been made on the integration treaty since being signed – due mainly to Lukashenko’s hesitation. He sees common monetary and immigration policies as a threat to Belarus’s sovereignty – and therefore, to his own power.

But some members of the Russian elite think Lukashenko has taken advantage of Russia’s generous subsidies for too long, while giving too little in return. Hence, Putin’s ultimatum seems clear: If you want to keep subsidies, then surrender some of your sovereignty.

A diplomatic source, speaking on condition of anonymity, believes that the creation of a United State of Belarus and Russia is a ploy by Putin to keep the reins of power after his mandate constitutionally expires in 2024. A bi-national merger would allow him to proclaim himself as head of the new supranational state, and thereby continue his presidential duties.

Merger looks unlikely

After Russia’s annexation of Crimea in 2014, the possibility of the newly aggressive Russia swallowing up Belarus has become more real. Like Eastern Ukraine, Belarus shares a common Soviet legacy with Russia, as well as deep linguistic and ethnic ties which, according to the most imperialistic factions of the Russian elite, qualifies it as part of the “Russian World.”

However, according to Belarusian journalist and political analyst Artyom Shraibman, a fully-fledged merger of the two countries is unlikely anytime soon.

Firstly, most Belarusians do not support unification with Russia. According to recent polls, the overwhelming majority of Belarusians are happy with the current degree of integration with Russia; only around 10% would support a full-blown merger.

In terms of foreign policy, Belarus has been enjoying benefits from its neutral role in the escalating conflict between Russia and the West, and around 60% of the population support this policy direction.

Moreover, unlike in Ukraine, Belarus has no pro-Russian political force or ethnic minority which could be used by Moscow to destabilise the local government. Lukashenko heads a strong authoritarian regime, with local elites fully loyal to him and no space for dissent or subversive movements. Besides cracking down on pro-Western activists, Lukashenko’s security apparatus has also been persecuting voices that openly advocate a merger with Russia.

A direct military intervention is another far-fetched scenario. Unlike Donbass, in eastern Ukraine, Russia would not be able to count on the support of the local population and a military offensive would likely face popular resistance. And forceful annexation would almost certainly result in additional Western sanctions, which would further squeeze the stagnating Russian economy and possibly trigger dangerous unrest at home.

Even the theory that Putin seeks the merger in order to retain power, is improbable, according to Shraibman: Putin could feasibly change the Russian constitution to remain in power, or he could select a successor, thereby ensuring a safe exit for himself in 2024.

Overall, the benefits for Moscow in swallowing up Belarus look limited compared to the risks. Besides, as Shraibman notes, Moscow is already in a win-win position. “If Belarus agrees to further integrate, Moscow wins,” he said. “If Minsk rejects the proposal, Moscow also wins, as it will be saving money on oil tariffs.”

According to Shraibman, Lukashenko is likely to go for the second option as the lesser evil.

“Losing Russian subsidies will be a blow for Lukashenko, but it would still preferable to losing his absolute control over the country,” he said.

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