fbpx

Latynina on Lukashenko’s Graft

Columnist Yulia Latynina on the con artist antics of Europe’s last dictator, Alexander Lukashenko, in regards to his demands that Russia pay $3.5 billion to make up for the lost energy subsidies: lukashenko2.jpg Latynina: Russia is averse to supporting opposition movements in Belarus Moscow Times:

What the actual sum might be is a moot point, since Lukashenko’s grievance is groundless in the first place. It is like a con artist walking into a restaurant and confronting the owner, saying, “I ate a bad shrimp here and nearly died. I want $100,000 in compensation.” It’s clear that the problem here is not the shrimp, but the con artist, who is engaged in a simple act of extortion. It is important to understand that Lukashenko is behaving like the con artist in this story not because he lost his confrontation with Russia, but because he won. Russia had started out in April by demanding $200 per 1,000 square meters, but in the end settled for just over $46, plus a 50 percent share in Beltransgaz, the Belarussian pipeline operator, at a wildly inflated value of $5 billion. Russia had wanted to impose customs duties on oil exports to Belarus, but ended up backing off, thus making it possible for Lukashenko to resell the same oil to Europe after tacking on the same duties himself. Lukashenko managed to force Russia’s hand with his insistent complaining about one bad shrimp. It is clear why Russia ultimately caved in to Lukashenko’s demands. In an extended conflict involving a pipeline closure, Russia stood to lose more than Belarus. As an oil producer, Russia would first have been forced to top off its storage tanks, and then to stop pumping oil, thereby violating contracts with foreign customers. This would have meant billions of dollars in losses. Belarus, as an oil importer, could have simply purchased the necessary quantities of oil from Ukraine. Lukashenko’s tactics were designed to punish his Russian ally. The closure of the pipeline cost Russia more than it cost Belarus.

Complete article here.