Russia Looming Large in Belarus & Ukraine

Belarus is falling fast into Russia’s waiting clutches.  The latest domino to fall is Belaruskali, the potash producer, 35% of which will be handed over to Sberbank as collateral for a $2 billion loan.  An analyst quoted by the Moscow Times said that the value of Belaruskali was ‘clearly way above $2 billion’, speculating that there is a power grab in the works for Suleiman Kerimov’s Uralkali.  Putin’s eager comments last week about welcoming Belarus into Russia were tempered by the caveat that any such move would be ‘the will of the Belarussian people’, but if the country’s ongoing financial emergencies continue to be met by a ready and willing Russia, there may not be time for such pleasantries.

Russia is also backing another former Soviet neighbour, although not in the way one might anticipate.  Now that the indignant Yulia Tymoshenko has been thrown in prison for her regular court outbursts (she refuses to stand when speaking to the judge) and vocal assertions that the charges against her and the entire trial constitute little more than a circus, President Dmitry Medvedev’s administration have launched in to defend her, with a warning to Viktor Yanukovych.  ‘The arrest will have international repercussions and is unlikely to yield positive results for Yanukovych,’ said a presidential source quoted today in the Moscow Times.  Russia may simply be eager to hold on to what many say amounts to a lucrative deal for them – the gas contract negotiated by Tymoshenko and Vladimir Putin in 2009, which increased the price of Russian gas for its Ukrainian customers by $220 per 1,000 cubic meters, is the reason why the former Ukrainian PM is on trial in the first place (even staunch anti-Kremlin activist Boris Nemtsov defends the deal as legit).  But in defending Tymoshenko against those who want her imprisoned, Medvedev’s camp are also performing a volte face on Yanukovych, who was a Kremlin favourite ahead of his 2010 election and in the many years leading up to it.  Perhaps this is Russia’s way of reminding him who calls the shots.