Lukashenka and Putin set to talk over entire spectrum of bilateral relations

Press service of the Russian president has announced a meeting between Putin and Lukashenka, which is likely to focus on ritual mutual assurances of alliance and unlikely to lead to specific agreements. The most complicated issues on the bilateral agenda, i.e. loans, terms of delivery and processing for oil and gas, nuclear power plant and the Russian air base, are likely to be discussed and the presidents may outline their compromise scenarios.

Of all bilateral issues, the deployment of the Russian air base seems to be the simplest – the parties have not found additional arguments to facilitate or to block it. Russia neither has new instruments of pressure, nor the urge to solve this issue as soon as possible. Rather, quite the opposite, so as the attention has shifted from Ukraine to Syria and Turkey, the urgency of real Russian military facility in Belarus has reduced. In addition, Lukashenka’s position is not strong enough to insist on his terms: Russian aircrafts under Belarusian command. The issue is likely to be postponed.

In addition, the presidents are unlikely to close the issue with the EEU loan for Belarus, since it is negotiated through other channels and the federal authorities only approve/disapprove the idea per se. There is a ‘principled’ decision to approve a loan for Belarus and its terms are negotiated through the EEU bodies by Russian and Belarusian lobbyists. It is known that Belarus has reduced the requested amount to USD 2 billion, which is likely to lead to softer loan requirements by the Fund.

Regarding the Nuclear Power Plant, yet in the summer Belarus has been allowed to repay the loan in the loan currency (USD) and in Russian roubles. The construction of the nuclear power plant is a major source of foreign investment in Belarus this year. Perhaps, at the meeting the presidents may announce the arrival of the first reactor unit in Belarus. At some point, the parties will have to discuss how to bridge energy from the Belarusian nuclear power plant to Kaliningrad, which means that Belarus may count on additional investments in this sphere.

The outcome of the talks on oil and gas will primarily depend on the outcome of the confrontation between Russian industry lobbyists and the Russian Finance Ministry. In 2016, conditions for Belarus should not change significantly, but the situation on the global energy markets is seriously curtailing Belarus’ benefits from special relations with Russia in this area.

In addition, the presidents may discuss the matter of granting the ‘domestic’ status to Belarusian goods on the Russian market within the Union State.

Overall, Lukashenka’s visit to Moscow is unlikely to lead to major breakthroughs or serious conflicts. The meeting is likely to produce a pro forma report for the public, while de facto the presidents may agree on basic parameters for cooperation within the framework of ongoing trends.