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Poland, Belarus & Ukraine Report: April 4, 2006


4 April 2006, Volume 8, Number 13
BELARUS
IS A RUSSIAN-BELARUSIAN GAS WAR BREWING? At a meeting with Belarusian officials on March 30, Aleksei Miller, the CEO of Russia's state gas monopoly Gazprom, announced that in 2007 Belarus will be charged European rates for Russian gas. That could mean the country paying up to five times as much -- something that could seriously affect the Belarusian economy, which has long depended on cheap gas imports. Could this be the start of a new gas war?

Only a few weeks after being reelected, Belarusian President Alyaksandr Lukashenka could now face a gas war with Russia.

Things looked much rosier in December 2005. Russia and Belarus signed a one-year contract for 2006 gas deliveries at $46.68 per 1,000 cubic meters. In return, Belarus agreed to complete on schedule its section of the Yamal-Europe pipeline, which will transport gas to Germany via Poland. Belarus also agreed to resolve problems regarding the leases for land on which Russian compressor stations are to be built.

Meeting with Lukashenka in Sochi on December 15, 2005, Russian President Vladimir Putin backed Lukashenka in the forthcoming presidential election. Putin was optimistic about ties with Belarus.

But the spirit of bonhomie wasn't in existence on March 30 when Miller met with Belarusian Energy Minister Alyaksandr Ageyev and Dimitry Kazakov, the head of Beltranshaz, the Belarusian state company that owns and operates the country's gas-pipeline network.

Miller gave them advance notice that in 2007 Belarus will be charged European rates for Russian gas deliveries. Western European buyers of Russian gas now pay approximately $230 per 1,000 cubic meters.

The official reason for this was later explained by the Russian ambassador to Belarus, Aleksandr Surikov, who said that the price increase was needed in order for Russia to be accepted into the World Trade Organization, Belapan news agency reported on March 31.

Some analysts have suggested that Gazprom's announcement could be meant to lessen criticism of Russia's use of gas as a tool of foreign policy prior to Group of Eight (G-8) industrialized countries' summit in July. The topic of energy security will top the agenda at the meeting. Russia, which is currently the chair of the G-8, could then say it is being even-handed in its gas-pricing policy and is selling to friend and foe alike at "European prices."

Syarhey Zvanko, head of the Department for Russia and the Union State in the Belarusian Foreign Ministry, reacted cautiously to the news that Gazprom might raise prices in 2007. He explained on March 31 that, according to a Belarusian-Russian agreement, "economic entities in both countries are to enjoy equal conditions and a price policy accord that entitles Belarus to gas deliveries at the rate charged for consumers in Russia's fifth price zone," Belapan reported.

Gazprom sells gas to its domestic customers on the basis of 11 regulated geographical price zones. The price for 1,000 cubic meters of gas in the fifth zone, including VAT, in March was $46.72 for nonresidential consumers and $36.52 for residential users. Overall, prices in the zones vary from $28.65 in the first zone to $54.81 in the 11th. This unwieldy system was designed to prevent a "payments crisis," after Gazprom was faced with nonpayment of gas bills from domestic consumers in the early 1990s.

Does this mean the era of cheap gas for Belarus is now coming to an end?

Valery Karbalevich, an analyst with the independent Minsk-based Strategy Center for Political Analysis, thinks probably not. He says the Belarusian authorities do not seem to be overly concerned as they know that the country offers Russia a transit route to its European markets and there is very little Gazprom can do to impose its will.

Karbalevich says if the price is pushed up, the Belarusian authorities could just take as much Russian gas as they need to satisfy the country's requirements, as Ukraine has done.

"If Russia refuses to supply the gas, he [Lukashenka] will simply take the gas being transported to Europe and all the problems will be settled," Karbalevich says.

He adds that Russia has very few possibilities to pressure both Minsk and Kyiv until a pipeline under the Baltic Sea, which will bypass Belarus and Ukraine, is completed by the end of this year.

Belarus's current gas contract with Russia was signed at the height of the Ukrainian-Russian "gas war." The low price for Belarus was used by Western critics as proof that Russia was raising gas prices for Ukraine as part of a policy to punish the new, pro-Western Ukrainian leadership, while subsidizing its friends in Belarus.

Lukashenka then tried to counter Western critics who claimed that his country was getting cheap gas for political reasons.

"Belarus gets Russian gas cheaply not for friendship's sake," Lukashenka told the Russian newspaper "Rossiiskaya gazeta." "We do not ask Russia to sell us gas for a song," he said. Lukashenka added that the transit of Russian gas through Belarusian territory costs one-fifth to one-third less than that through Ukraine.

Russia pays Belarus $0.75 per 1,000 cubic meters per 100 kilometers for transporting gas via the Beltranshaz pipeline and $0.46 per 1,000 cubic meters per 100 kilometers along the Yamal-Europe pipeline.

Another important factor is the ownership of the trunk pipelines running through Belarus. One pipeline was built in Soviet times and is owned by the Belarusian state. The second, the Yamal-Europe pipeline, will be completed by the end of this year and is currently running at reduced capacity. This pipeline belongs to Gazprom, but the land on which it is built belongs to the Belarusian state and is leased to Gazprom on a long-term basis.

Jan Maksymiuk, RFE/RL's Belarus and Ukraine analyst, says that Moscow has pushed Minsk to give up control of the Belarusian gas-pipeline network.

"Moscow unambiguously indicated that it wants control over Beltranshaz, the state-run operator of Belarus's gas pipeline network. Lukashenka, who promised in 2002 to set up a Belarusian-Russian venture to run Belarusian gas pipelines, backed down on his decision in 2004," Maksymiuk says. "That provoked an angry response from Gazprom, which even cut off Belarus's gas flow for one day."

Belarus owes Gazprom $120 million for gas debts run up since the 1990s. A substantial price increase for 2007 gas deliveries could place Belarus in a difficult position and might force it to relinquish control over Beltranshaz to Russia in return for a cheaper gas price and the cancellation of the debt.

This could further upset the already shaky foundations for a union between the two countries. It could also raise European concerns over reliable gas deliveries through the Yamal-Europe pipeline. (Roman Kupchinsky)

(RFE/RL's correspondent Valentinas Mite contributed to this report.)

MEASURING THE SUCCESS OF PROTESTS IN STEPS, NOT STRIDES. Belarusian opposition leader Alyaksandr Milinkevich believes that the week of street protests that followed the country's March 19 presidential vote made "cracks in the fortress" of the ruling regime. However, President Alyaksandr Lukashenka -- who won a third term in office following his landslide victory -- appears unmoved. The opposition has the West's backing as it continues to press for a repeat election, but success largely depends on the real impact the vote and ensuing protests had toward effecting change in Belarus.

The opposition's hopes for a revolution in Belarus were not realized, and President Alyaksandr Lukashenka remains at the helm of the state.

Regardless, main opposition candidate Milinkevich on March 28 found room for optimism. He says Belarus is on the right path and that the opposition movement will continue to facilitate change.

"We were also discussing what to do next," Milinkevich said. "This is very important. And we discussed also how to avoid pessimism. I think we have made the first and very serious step toward victory."

Many agree that the election and ensuing protests, while failing to unseat President Lukashenka, did succeed in leaving a positive mark on the country.

U.S. Secretary of State Condoleezza Rice on March 28 praised the Belarusian opposition. Although she describes it as "nascent" and "incipient," Rice notes that the opposition's strength has increased over the past year and believes that its presence is an achievement.

Stuart Hensel of the London-based Economist Intelligence Unit says the achievements should not be overestimated. The demonstrations in Minsk were not large enough to force the regime to change course -- and thus cannot be compared to the success of Ukraine's Orange Revolution. However, Hensel believes things may be looking up for the Belarusian opposition.

"It could be that the opposition has managed at this point to carve out a bit more room for itself within the Belarusian domestic political scene and this could be interesting to watch going forward," Hensel said. "I think Mr. Lukashenka is now faced with an opposition leader in Mr. Milinkevich, who is quite different than anything he has faced in the past."

Hensel says that Milinkevich, who was little known just a year ago, found more success in reaching out to voters than observers expected before the vote. The opposition leader is already creating a new political movement and cannot be waved aside easily.

However, Hensel says it does not mean that the opposition will be able to push Lukashenka from power in the future.

"It doesn't look like the opposition has sufficient strength in order to seriously challenge Lukashenka -- certainly in the next couple of months and potentially throughout the course of this [third] term, but what we've seen potentially is what we've saw in Ukraine four or five years ago -- is the growing size of the opposition's ability to mobilize and make it's voice heard despite extremely constrained political surroundings," Hensel said.

It would be an oversimplification to blame only Lukashenka for the state of affairs in Belarus. Hensel says the biggest problem is overcoming the lack of unity among the politicians in the Belarusian opposition. During the March election the opposition again failed to find common ground and wound up offering two candidates -- Alyaksandr Kazulin and Milinkevich. Aleksei Malashenko, an expert at the Carnegie Center think tank in Moscow, says achieving political unity is only a part of the problem the opposition faces. He says the provincialism of Belarusian society and it's isolation from the changes taking place in neighboring countries is the core of the issue.

"Belarusian society is provincial in character and in its political culture," Malashenko said. "One gets the impression that it [the society] is lagging behind [the neighboring countries] by some 10 or 15 years. It is not a fault but it is a disaster. It might look funny but it still lives in this Soviet-era inertia."

Malashenko says the majority of Belarusian citizens seem to be satisfied with the stability Lukashenka offers and are afraid of the uncertainty that follows change.

"As you see, we observe complete self-satisfaction," Malashenko said. "One gets the impression that for many [Belarusians] the main value is stability. People point to Ukraine, Russia -- some kind of demonstration taking place there, some kind of meeting; prices are going up, defaults happen. But here [in Belarus] everything is quiet and good. It is completely a trait of Soviet psychology [to be happy with what one has.]"

Meanwhile, Milinkevich is calling for an end to what he calls Belarusians' "slavery" to this kind of thinking, and says the protests mark the beginning of "a revolution of the spirit."

Milinkevich says this shift away from a Soviet mindset marks the greatest achievement of the recent protests. (Valentinas Mite)

UKRAINE
TYPOLOGY OF THE UKRAINIAN ELECTIONS. Now that Ukraine's March 26 parliamentary elections are over, what has emerged is a country firmly split along regional and ideological lines?

The website of the Ukrainian Central Election Commission (http://www.cvk.gov.ua) has posted a breakdown of votes cast in Ukraine's 25 regions and the cities of Kyiv and Sevastopal. This data, along with the findings of the Fund for Democratic Initiatives and the Kyiv Institute of Sociology, shows some emerging trends in Ukrainian politics.

Regional Preferences

The Party of Regions, led by former Prime Minister Viktor Yanukovych, won the majority of seats with 32.12 percent of the vote and will have 186 seats in the new parliament. The results show that it has remained a regional party appealing almost exclusively to voters in the eastern and southern regions of Ukraine. As expected, the Party of Regions swept Donetsk with 73 percent, Luhansk with 74 percent, Crimea with almost 58 percent, Mykolayiv with 50 percent, and Kharkiv with 51 percent. Altogether, the party won nine regions and the city of Sevastopol with an average of 55 percent. Thus the line dividing Ukraine into east and west remained intact.

The most unexpected results were registered by the Yuliya Tymoshenko bloc, which came in second behind the Party of the Regions with a total of 22.27 percent of the vote. Around 5.6 million voters cast their ballots for the Tymoshenko bloc, which will now have 129 seats in parliament. The bloc's popularity has grown phenomenally: in 2002, it only managed to garner 1.9 million votes in parliamentary elections.

This time around, the bloc won the parliamentary race in 13 regions and in the city of Kyiv. Its support base includes four western Ukrainian regions (Volyn-44 percent, Chernivtsi-30 percent, Ternopil-34.5 percent, and Khmelnytsk-35.5) along with most of central Ukraine. The bloc's largest margin of support was in the Kyiv region (44.5 percent) and lowest in the eastern Donetsk region where only 2.5 percent voted for the bloc.

In the regions where the Tymoshenko bloc won, it did so by an average of 34 percent. Many of these votes could be seen as a protest against President Viktor Yushchenko's removal of Tymoshenko as prime minister in the summer of 2005.

Our Ukraine, the pro-presidential bloc, suffered its greatest setback, coming in a distant third with 13.9 percent of the vote. The party is entitled to 82 seats in parliament. It won a plurality in only three western Ukrainian regions: Lviv, Ivano-Frankivsk, and Zakarpathia. In each of these regions it faced a tough fight from the Tymoshenko camp.

Since 2002, it has seen a sharp decline in its support. The U.S.-based "Ukrainian Weekly" wrote on April 2 that "After winning 6.1 million votes in the 2002 election, Our Ukraine won 3.5 million votes this time around -- a decline of 43 percent."

Other parties to enter the parliament are the Socialist Party with 5.6 percent (33 deputies) and the Communist Party with 3.6 percent (and 21 seats.)

The Communists, who have traditionally had their support base in the eastern regions of Donetsk and Luhansk and in the Crimea, saw many of their supporters defect to the Party of Regions. They managed to pass the 3 percent parliamentary barrier with 4.4 percent of the vote in Luhansk, 3.1 in Donetsk, 4.5 in Crimea, and 6 percent in Kirovohrad. It was the poorest ever showing for Ukraine's Communist Party and many analysts believe it is the last time they will be represented in the parliament.

Oleksander Moroz's Socialist Party has remained relatively stable over the past five years with its traditional base of voters in the central, mainly agricultural, regions of Ukraine.

Demographics

According to data from exit polls released by the Fund for Democratic Initiatives and the Kyiv Institute of Sociology, more women voted for the Party of Regions than men. Overall, its supporters were older (60 and above) although the party held considerable appeal among younger voters (18-39). Their supporters also tended to have less formal education.

The Yuliya Tymoshenko Bloc's base of support was equally distributed between men and women, most of whom were middle-aged (between 40-59). They tended to have the most formal education.

Our Ukraine's supporters were also equally divided between men and women, mostly between the ages of 30-49 and had less formal education than the supporters of Tymoshenko's bloc. Their educational level roughly equaled the education level registered by voters for Party of Regions.

What Does It All Mean?

A preliminary conclusion is that Ukraine is headed towards becoming a two- or three-party democracy with a conservative, possibly pro-Russian electorate, in the eastern and southern regions of the country, with more pro-Western liberal attitudes held by voters in the western and central regions.

In all likelihood in the next major elections, the Party of Regions will face the combined forces of Yuliya Tymoshenko's bloc, Our Ukraine, and the Socialist Party (if these three manage to make peace).

Ukrainian President Viktor Yushchenko noted during his radio address on April 2 that "the latest elections represent the first step towards the political structuring of society, when citizens will have to choose among three-four parties with clear ideologies, rather than among 100 parties," Interfax reported.

The smaller parties in Ukraine are on the verge of extinction -- the Communist Party, Natalya Vitrenko's bloc, the Greens, and even the Socialist Party might have seen their final days and their supporters will be forced to make a choice between the emerging larger political parties in the country.

Regionalism will continue to play a significant role in future elections and few voters are likely to cross geographical boundaries. Ideologically, the issues are expected to remain unchanged: the eastern electorate will remain distrustful of Ukrainian speakers who would like to see the country in the EU and NATO; while western and central Ukrainians will continue to be suspicious of their eastern and southern countrymen who, at least in the popular mind, are predominantly Russian speakers and who orient themselves their bigger brother in the east. (Roman Kupchinsky)

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