LRIP

Russia and Belarus Cooperation over Economies

September 10, 2021

The Russian president has announced an agreement on macroeconomic policies as well as common tax and customs measures. During a summit on Thursday evening ahead of massive joint military exercises, Russian President Vladimir Putin and Belarusian President Alexander Lukashenko said they had made progress toward integrating the two countries’ economies. Putin said late Thursday that the two leaders had agreed to coordinate their macroeconomic policies, implement common tax and customs measures, and harmonies other financial controls as part of a 28-point roadmap that is expected to increase Russia’s influence over its neighbor.

According to Putin, the countries will work to integrate their energy markets while maintaining heavily discounted natural gas supplies to Belarus, and Russia will provide another $630 million in loans to the cash-strapped Belarusian government. The texts of the agreements were not made public, and the leaders did not publicly sign any documents. While the two sides announced new economic agreements, they did not introduce a common currency or go into detail on any defence or political agreements, indicating that the scope of the negotiations had been limited.

Lukashenko, who has been recognized by the West for a brutal crackdown on the country’s opposition, is seen as opposing Moscow’s pressure to transfer control of government policy in exchange for Russian support. “First, the economic foundation must be laid before proceeding on the political track,” Putin said following the talks, noting that the two sides had not discussed possible political integration. While the two sides did not discuss openly arms sales or new Russian bases in Belarus, there were signs of increased military cooperation between the two countries.

Lukashenko stated that he hoped to purchase a large shipment of weapons, including combat jets and helicopters, as well as the advanced S-400 air defence weapons, ahead of his sixth meeting with Putin this year. Belarus also claimed that Moscow had sent Su-30 fighters to the country to patrol its borders with Europe. The Kremlin was thought to be using the country’s isolation to put pressure on Lukashenko to finalize a number of integration projects that would bring Belarus much closer to Russia politically, militarily, and economically, even tying the two countries together with a common currency.

Nonetheless, Lukashenko had delayed implementing the agreements, which were drafted as part of a 1999 Union State treaty, realizing that they would undermine his position and cede Belarusian sovereignty to Moscow. According to state media, a Belarusian ambassador stated that the two parties may sign the agreements on Thursday evening. However, similar predictions have previously failed to materialize. The meeting takes place just days before the start of the Zapad-2021 military exercises, in which tens of thousands of Belarusian and Russian troops are expected to take part in planned manoeuvres along Europe’s borders. Moscow stated that up to 200,000 troops were taking part in the training, but that figure was thought to be dramatic.

The four-year exercises typically represent a conflict between NATO and a Russian-led alliance. The 2017 drills sparked widespread concern in the West, with fears that they would be used to justify a military buildup along NATO’s borders. The response to the 2021 drills, which were scheduled to take place from September 10 to 16, has been more muted, though European countries along the Belarusian border have increased security precautions, in part due to a migrant crisis exacerbated by the Belarusian leader.

“I requested you to come to sum up the results of what has recently been done in establishing the Union State program,” Putin said as the talks began on Thursday, relating to a decision to further connect the countries that had delayed since it was first agreed in principle in 1999. “We are moving forward like civilized nations, only as a union nearly a single people,” Lukashenko said rhetorically.

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