Integration with Belarus Has Gotten Cheaper :: Charter'97 :: News

Russian Prime Minister Mikhail Fradkov showed his support for Belarusian President Alexander Lukashenko`s efforts to deepen integration in the union state yesterday in Minsk. He promised to a lot by the end of the year $146 million for the purchase of natural gas from Gazprom at new, higher prices. In addition, Fradkov opened an exhibit of Russian goods in Minsk and spoke at the first union business forum.

Integration with Russia began early yesterday morning in Minsk. First Lukashenko received the prime minister, in Belarus on a one-day visit, at his residence. “There was a conversation on issues of effective bilateral cooperation,” Fradkov reported when he left. The effectiveness of integration of the two countries is impressive indeed. Russia is paying less every year for the gas it delivers to Belarus. Last year, Gazprom raised the price for its product from $30 per 1000 cu. m. to $46.68. The Russian federal budget paid the Belarusian federal budget the difference in the form of a $175-million interstate credit. In 2005, they plan to give the Belarusian budget only $146 million. Of course, that is small-scale economics so far. But that $29 million is still not unneeded in the Russian budget and, if Belarusian Prime Minister Sergey Sidorsky and his deputy Vladimir Semashko are to be believed, the Belarusian budget plans to pay its gas debt in the coming years. In any case, Sidorsky and Semashko claimed yesterday that the Belarusian gas debt would be reduced in the next several years from $300 million to $120 million. Sidorsky also said that the country is paying Gazprom now only in cash. Gazprom does not deny that information. But it is not hurrying to send Belarus more gas either. Gazprom is supposed to provide Belarus with 20.5 billion cu. m. of gas this year. The Belarusians are asking that that delivery be increased, without a price increase, to 22 billion cu. m. in 2010, 23.7 billion in 2015 and 25 billion in 2020. Gazprom, however, wants to reduce deliveries to 18 billion cu. m. per year. The Russian company is already dissatisfied with the price of $46.68 per 1000 cu. m. They plan to sell gas to Ukraine for $160 per 1000 cu. m.

Yesterday`s negotiations were not limited to the gas problem. At the opening of the exhibition of Russian goods, Fradkov noted the competitiveness of many models. That, he said, should make it possible to restore the small bilateral trade turnover this year, which customs officials say, has been declining. In 2004, trade turnover reached $17 billion, but6 for the first half of this year, it was only $7 billion. Belarusian customs statistics indicate that trade is up 20 percent this year. No one was surprised at this difference. Each counts in its own way.

Lukashenko explained yesterday how to count. Opening the first union business forum in Minsk yesterday, he reminded the audience that “We have to overcome what divides us patiently and preserve what joins and unites us, without giving up our sovereignty to each other, neither country, choose unified legal, economic and organizational systems that will become the basis for the future union state.” The most important conclusion Lukashenko reached was on the economic unification of the countries. “In their time, many spoke about the incompatibility of the Belarusian and Russian economies, but it seems they are compatible.” Belarusian Minister of the Economy Nikolai Zaichenko explained to what degree they are compatible. “A difference of opinion remains on the emission center,” he admitted. In particular, the Belarusians are continuing to insist that their national bank have equal rights with the Central Bank of Russia in managing the emission center, which in Zaichenko`s words, “would create the real possibility for admittance of other states into the currency union of the two states.” At the Russian Central Bank, they hold that only Russian financial authorities should be in charge of the emission center. It is a clear negotiations deadlock. Lukashenko was careful not to mention currency integration yesterday. That must be coming in the second union business forum, which will be held in Moscow.