![Sample our Area Studies journals, sign in here to start your access, latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5922/TOC-Subject-Sample-2021-Area-Studies.jpg"})
Abstract
This paper explores energy policy in Belarus during the Presidency of Aleksander Lukashenka (1994–present), focusing on his adroit use of revenues produced by that sector of the economy to secure the loyalty of his political base and the country’s elites. With a valuable energy infrastructure (pipelines and refineries) inherited from the Soviet period and subsidized commodity imports from Russia, Lukashenka has taken advantage of price differentials, transit fees, taxes, and re-exports to generate rents that are then redistributed among domestic actors, enhancing the popularity of the incumbent and the furtherance of the social contract obtaining there. This is contrasted with the case of neighboring Ukraine, where the same geographic energy legacy resulted instead in an era of rampant corruption and political instability.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1. Effective 1 January 2007, Russia eliminated oil export duty preferences for Belarus and substantially increased its share of export duties charged on oil products refined in Belarus from Russian oil. A week later, Russia’s pipeline monopoly, Transneft, shut off supplies to the Druzhba oil pipeline supplying Belarus, briefly interrupting supplies to Poland and other points west – the first time that Russian (or Soviet) oil supplies to EU consumer countries had been interrupted.
2. While in principle, it is possible to further differentiate the income received by Belarus between profits, rents, and taxes, for the purposes of this article, the three are treated as mutually interchangeable. The standard definitions of energy rents define these narrowly (“the difference between the value of … production at world prices and total costs of production” [World Bank Group Citation2014]) in terms of primary energy production and exports. See also Gaddy and Ickes (Citation2005).
3. While most of the literatures on rentier states refer to income from oil exports, authors, such as Mazzuca (Citation2013), refer to rents from a variety of natural resources including agricultural crops. Wantchekon and Jensen (Citation2000) define a rentier state more broadly, as one exhibiting “high dependence on external rents produced by a few economic actors”.
4. In 2011, the state-owned gas transit company, Beltransgaz, was sold to Gazprom.
5. Calculated by the author on the basis of data in Romanchuk (Citation2007, 16–17) using data from the Ministry of Tax Collection.
6. In the case of Ukraine, this problem continued through the 2000s. As of 2014, only two of Ukraine’s seven refineries were working.
7. Although not the focus of this article, it is important to note significant internal energy rents may also be accrued in situations of energy dependency, for example (as in the case of Ukraine) through corruption and stealing from the state. See Balmaceda (Citation2013a, chaps. 1 and 4).
8. Securitization refers to the presentation of a particular development as a security threat, moving it from other agendas and into a security one justifying “extraordinary” actions (see Buzan, Wæver, and Wilde Citation1998); in the energy area, we refer to securitization as the social construction and articulation of energy dependencies as existential security threats. Such securitization is not an objective process, but one affected by factors involving the actor “doing” the securitization (“securitizing actor”), the “object” being securitized, as well as the actors or audiences (“referent objects,” see Buzan and Wæver Citation2009) vis-à-vis whom the securitization is attempted. For other perspectives on discursive control see also Foucault (Citation1971, 7–30).
9. By “discursive creation of artificial scarcities” we refer to a strategic manipulation before or during energy trade negotiations. It involves the artificial worsening of trade or transit conditions as way of opening the door to certain desired arrangements that may have seemed overly unbeneficial even some days earlier appear as realistic policy options.
10. By “discursive escalation of conflicts” we refer to the artificial exacerbation of conflicts to promote certain responses by either the directly affected party or third parties. For example, low-level business negotiations may be escalated by one of the partners into a high-profile political game in the hope of making the directly affected party (in this case, Russia) fear the impact of the trade confrontation on the overall relationship or of involving interested third parties (such as in this case, the EU).
11. Here, “the electorate” is used for working purposes to mean not only voters in free elections, but those on whose tacit or explicit support Lukashenka has relied in order to maintain power. More generally, electoral politics in Belarus were only one part of a broader game including important doses of “administrative resources,” direct political control by the executive, and, when deemed necessary, repression.
12. For 1997 data see HRW (Citation1998); for 2008 data see IPM (Citation2008). While the dollar-denominated growth of average wages was impressive, growth in real terms was less so due to inflation and exchange rate fluctuations. Not surprisingly, the Lukashenka regime insisted in presenting both wage growth goals and achievements in dollar terms.
13. Although there is no updated survey data on this, from a 2001 poll, we know that nearly half (48 percent) of collective or state farm workers supported Lukashenka; compared to 41 percent in the population as a whole. With 31 percent of the population living in the countryside, they represented a substantial electoral force in Belarus. See Dmitriev and Khurs (Citation2002, 118, 126–127).
14. It is important to note, however, that such a populist use of energy policies never went so far as to endanger Belarus’s ability to pay Russia for its energy (gas) imports – in contrast with Ukraine, where average domestic prices were not set sufficiently high as to cover import prices for much of 1996–2006.
15. See RFE/RL Citation2010. For Nekliaev’s declaration on the sale of oil and gas pipelines, see Dynko Citation2010.
16. For an exception, see Silitski (Citation2004).
17. Estimates (all unconfirmed) on the size of this budget vary, but in the early 2000s they ranged from about US$3 billion to US$10 billion per year, compared to the country’s GDP of US$23.1 billion and official budget of about US$ 11.6 billion in 2004. At its height, Lukashenka’s Presidential Administration machinery is estimated to have employed up to 5000 people, effectively becoming a shadow government (author’s interviews, Minsk, November–December 1997, November 2001, and March 2004). According to former head of the Presidential Administration Ivan Tsitsiankow (Ivan Titenkov), during his time at the Administration (1994–1999), it encompassed more than a hundred companies with a total of 19,000 employees (See Titenkov Citation2001).
18. On formally voluntary but “expected” contributions, see for example Presidential ukase 291 of July 7, 2003 on “O dopolnitel’nyh merah gosudarstvennoj podderžki futbol’nyh klubov (On supplementary measures for state support of soccer clubs),” establishing a system by which all higher level Belarusian soccer clubs “receive financial support from a number of enterprises chosen by the President.” (Interfax.by Citation2008).
19. On the need to stay away from active politics see also Oleg Manaev (cited in Daneiko Citation2007). Although several of Belarus’s wealthiest energy traders (such as Juri Chyzh) were deputies in the National Assembly, given the largely non-confrontational nature of this parliament, this did not automatically amount to “active participation in politics”.
20. In addition, neftetreideri were often able to “find” and import additional amounts oil from Russia, often at prices lower than those set in the state-to-state agreements, helping to bring refineries back to working at high capacity – a problem through the mid-late 1990s – and to bring additional income to the state in the form of export duties. (Author’s interviews, Minsk, November 8, 2006).
21. Such hopes were especially high in 2001, when Mikhail Marynich (former minister of Foreign Economic Relations who switched to the opposition) attempted to run in the presidential elections held that year. After failing to collect sufficient signatures to be registered as a candidate, he was charged and convicted of stealing charges. He remained in prison until 2006.