Belarus and Russia to Unite? Not this Year

C O N F I D E N T I A L SECTION 01 OF 05 MINSK 001347

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/31/15
TAGS: PREL PGOV BO
SUBJECT: Belarus and Russia to Unite? Not this Year

Refs: (A) Minsk 904, (B) Minsk 499, (C) Minsk 1231

Classified by Ambassador George Krol for Reasons 1.4 (B,D)


1. (C) Summary: Reportedly on November 15, Presidents Putin
and Lukashenko are scheduled to review the latest draft of
the Constitutional Act on the Belarus-Russia union
(although rumors now circulate that this could be postponed
to December). The draft has not been made public, and is
reportedly incomplete. It remains unknown what sort of
union the Act envisions, although some details concerning
the union parliament have been leaked. The Act would have
to be adopted in popular referendum in both countries.
Several analysts have predicted Belarus would seek to hold
its referendum concurrently with presidential elections, to
give Lukashenko's inevitable "reelection" legitimacy. Even
if adopted, the Act may only provide for a lengthy
transition to union, not union itself. Belarusian analysts
say Russia wants union, while Lukashenko does not.
However, Lukashenko needs Russia, so he needs to appear to
support the union politically, while working against it
ever coming into force. End summary.


2. (U) On October 20, the commission preparing the draft
Constitutional Act (CA) for the proposed Belarus-Russia
union met in Moscow. Participants in that meeting have
told the press the draft CA will be reviewed by the Supreme
State Council of the union state (i.e. Presidents Putin and
Lukashenko) on November 15. This cable explains what the
CA is believed to be, and Belarusian reaction to this
latest step towards union.


The Easy Part is Done
--------------


3. (SBU) Participants in the October 20 meeting, namely
Speaker of the Russian Duma Boris Gryzlov and Head of the
International Affairs and CIS Relations Committee of the
Belarusian parliament Vadim Popov, announced the CA is only
90 percent complete. Independent analysts argue the
completed portion represents the easy decisions, such as
creating a common customs space (for example, the two
states have already unified 86 percent of tariffs). The
remaining ten percent contains markedly more difficult
issues, such as whether there will be a union state
president, what form union would take (a single state,
something EU-like, or a loose confederation),or how to
implement the proposed single currency.


What is the Union State?
--------------


4. (SBU) The draft CA has not been made public, but from
press comments it appears to be nearly identical to earlier
draft CA's from 1999 and 2003. If accepted, the CA would
modify the constitutions of Russia and Belarus, but in what
way depends on what the CA says. The union state would
have a bicameral parliament. The upper chamber, the House
of the Union, would consist of 72 senators, half from each
Belarus and Russia seconded from the two countries'
parliaments. The lower chamber, the House of
Representatives, would have 75 deputies from Russia and 28
from Belarus elected directly in popular elections. Press
reports say a Prime Minister would head the union state,
although one analyst claimed the CA does not outline how
the PM is chosen. Other press reports describe a
presidency rotating between the Russian and Belarusian
presidents. One press source added the union state would
also include a court and a Bureau of Accounts.


5. (SBU) Popov told the press the Supreme State Council
would be the highest body in the union state. He outlined
the hierarchy in the following example, "If the union
government prepared a budget, it would be accepted by the
union Parliamentary Assembly, but only the Supreme State
Council could approve it." Popov also stated the union
state commission debated putting a union state presidency
into the draft CA, but decided such a step was premature.


So What Happens Next?
--------------


6. (SBU) All agree the CA would have to be approved by
popular referendum in both Russia and Belarus. Different
experts have outlined different timelines. Gryzlov
predicted the referendum would be held in both countries on

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March 12. Pavel Borodin, State Secretary of the Union,
said it would be in October or November 2006. Lidiya
Yermoschina, head of Belarus' Central Election Commission,
explained the GOB's view in detail to Belarus' state press
agency. She said that if Putin and Lukashenko agree to the
text on November 15, the CA would go to the Parliamentary
Assembly of the Belarus-Russia Union for consideration.
They would consider the draft and make changes through the
end of January or the middle of February. From there it
would go back to Lukashenko and Putin. If both presidents
approve the text, they would send it to their national
parliaments for ratification. Yermoschina thought that
would occur in mid-March for Belarus. After ratification
the two countries would announce public referendum on the
CA. Yermoschina stated, "It is wished that these would
happen on the same day." [Note: this implies it could be
held on different days.] As it would take three months to
prepare any referendum, the earliest they could occur in
this timeline would be mid-June. [Note: Belarusian
presidential elections have to be held no later than mid-
July, so it is likely the GOB would hold the referendum on
the same day, as it did with the October 2004 referendum,
to distract from the presidential elections.]


And then there is a Union? Maybe Not
--------------


7. (SBU) Belarusian independent press has quoted Pavel
Borodin, perhaps the most enthusiastic supporter of union,
as saying the current Constitutional Act is only a
transitional document. He said the CA anticipates creating
a six to seven year period of gradually phasing in the
union state. Both the 1999 and 2003 drafts, which were
made public, were also transitional in character.
Belarusian independent press has also picked up on a
comment made by Gryzlov, where he said that only
after/after the CA passed both referendum would it be
published in the Belarusian and Russian press (implying the
people would vote without knowing what is in the text). It
would then enter into force 30 days after the referendum.


Belarusian Experts Skeptical
--------------


8. (C) Econoff discussed the union state with Yaroslav
Romanchuk on October 26 and Andrey Suzdaltsev on October

28. Romanchuk heads a political/economic think tank and is
a deputy leader in the opposition United Civic Party.
Suzdaltsev is an independent political analyst who wrote
his dissertation on the union state. Both had participated
in a Gleb Pavlovsky-hosted discussion on the union state in
mid-October in Moscow.


9. (C) Despite the furry of press, Romanchuk does not think
any serious progress towards union has been made. He
argued that, as always, the main unresolved issues are
whether there will be a union president, and what form
union will take (a unitary state, something resembling the
EU, or a loose confederation).


10. (C) Both agreed that Russia wants union, and Lukashenko
does not. [Note: Lukashenko's angry reaction to comments
made by Russia's proposed Ambassador to Belarus in June,
that he would be the last ambassador before union, bear
this out Q ref A. As a result of that flap, Russia still
has no ambassador in Minsk.] Romanchuk claimed the union
is being pushed by Russian chauvinists out to recreate the
USSR/Russian Empire, while Suzdaltsev opined Putin wants to
create a greater pro-Russian bloc, and that Russia's elites
see union as a natural development. Lukashenko is against
union because it would decrease his own powers. However,
Lukashenko needs Russia. He is afraid of what he sees as
Western efforts to unseat him in 2006, and wants Russian
support when he runs for president. Lukashenko also needs
continued cheap Russian oil and natural gas, as well as
easy access to the Russian market, to keep the Belarusian
economy growing. Suzdaltsev argued Lukashenko therefore
needs to convince Putin he supports union, while really
trying to forestall it.


Will Lukashenko Sign the Constitutional Act?
--------------


11. (C) Romanchuk and Suzdaltsev both believe Lukashenko
will probably sign the CA, and then schedule the referendum
for the same day as Belarusian presidential elections (most

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likely on July 16). Both agree Lukashenko would use the
referendum to solidify his reelection, but differ as to
how. Romanchuk stated Lukashenko would most likely
"reluctantly" sign the CA, but then campaign against union
and for Belarusian independence, thereby co-opting a plank
in the opposition's platform. Suzdaltsev thinks Lukashenko
would campaign in favor of the referendum and then use its
passage to give his own inevitable "reelection" legitimacy,
as well as to ensure Belarus keeps getting cheap Russian
energy. However, Lukashenko would be careful to include
language that mandates further discussions on union through
2008 to make sure no real progress is made until after
Putin leaves office. In this way Lukashenko would use the
referendum only to further his own political life while
making no serious step toward union with Russia.


12. (C) [Note: Suzdaltsev also stated Lukashenko is using
the opposition to legitimate his reelection. He allowed
the 10+ coalition to hold its nomination congress in Minsk,
against all predictions, to ensure there is an opposition
candidate. State media has so far not attacked that
candidate, and will hold off until he officially registers
as a candidate, at which point they will attack viciously.]


Lukashenko under Pressure
--------------


13. (C) Romanchuk said his sources inside the GOB say
Lukashenko thinks Russia is bluffing with this talk of
union. However, Lukashenko reportedly returned from his
recent vacation to Sochi very depressed because "a number
of Russians gave him ultimatums" that he had better accept
the union. Romanchuk believes the Kremlin will place
serious pressure on Lukashenko two or three days in advance
of the November 15 CA review to accept Russia's position on
the outstanding issues. (The Russian charge d'affairs
recently told Ambassador that it looks like the November 15
Putin-Lukashenko meeting may be postponed until December.)


14. (C) Romanchuk has heard the Kremlin is considering
replacements for Lukashenko in the event he does not sign
the CA. According to rumors, two possible replacements are
State Control Committee head Leonid Tozik and former
Prosecutor General Oleg Bozhelko. [Note: Bozhelko had
"resigned" after investigating the disappearance of
prominent Belarusian opposition leaders.] Romanchuk added
that General Pavlov, a retired Belarusian general living in
Moscow, claimed Putin recently met with Russia's preferred
Belarusian presidential candidate. Pavlov would not say
who that person was, only that it is not Social-Democrat
Aleksandr Kozulin. Any Russian-backed candidate can be
expected to expose Lukashenko's corruption or role in the
disappearance of opposition figures as part of his
campaign. If Lukashenko in the end does not agree to
union, Romanchuk believes the effectiveness of Russia's
response (such as supporting a different presidential
candidate) will be very indicative of Russia's real power
in the near abroad.


15. (C) Suzdaltsev claimed Putin is fed up with Lukashenko.
He said in the past several presidential meetings, whenever
Putin raises union Lukashenko quickly agrees, even before
Putin stops talking. Lukashenko then immediately reneges
on whatever he agreed to. In a meeting in Sochi in April,
Suzdaltsev explained Lukashenko asked Putin for Russian
support when he runs for reelection. Putin agreed, if
Lukashenko signs the CA. Suzdaltsev believes Gazprom will
be the best indicator of Russian intentions. Despite
Belarusian announcements, the two countries have not signed
an agreement on gas deliveries for 2006. When and on what
terms a deal is signed will show whether the two sides have
reached an agreement on union.


Real Barriers to Greater Union
--------------


16. (C) Currently there are very few tangible signs that
Russia and Belarus have been developing a union seriously
after ten years of discussion. The border between the two
is open, but Belarus is considering reimposing customs
controls to limit losses in trade under new VAT rules. The
two countries have a common air defense system, but a
Russian offer to provide for free S-300 missiles fell apart
and Belarus is now paying USD 13 million for the system.
Russia maintains two small military bases in Belarus, and
Belarus conducts some military training in Russia. Belarus
was supposed to have adopted the Russian ruble in January

MINSK 00001347 004.2 OF 005


2005, but this has been delayed repeatedly as Belarus
presented several improbable demands (ref B).


17. (C) Despite ten years of talks, Romanchuk maintained
Belarus' nomenclature, military and security services are
all against union. All would lose position and authority
if Belarus lost independence. Moreover, Lukashenko has
carefully placed his own people throughout the government,
who will follow his lead on union. This is especially true
in the BKGB, which Lukashenko purged to cut their ties with
Russia's FSB. Suzdaltsev, on the other hand, opined the
Belarusian nomenclature does not like Moscow, but will
grudgingly support union as they know Belarus cannot get
gas from the West. Romanchuk believed the Belarusian
people increasingly oppose union. [Note: according to the
IISEPS September poll, only 13 percent of Belarusians
support uniting with Russia into a single state, while 50
percent support a looser union that would preserve
Belarusian sovereignty; ref C.]


18. (C) Suzdaltsev argued Lukashenko would also renege on
agreements with Gazprom to privatize Belarus' domestic gas
distribution network, Beltransgaz. Both Romanchuk and
Suzdaltsev asserted Belarus and Ukraine recently began
repairing relations and are talking about presenting Russia
with a united front to use Russian dependence on them for
gas transit as leverage.


19. (C) Suzdaltsev pointed out that GOB officials have by
and large remained silent on union; most of the press
statements are from Russian officials. Belarus' state
press has also been largely quiet. On the other hand,
Suzdaltsev claimed Belarusian state media has been quite
critical of Russia since the beginning of summer. He sees
this as a sign Lukashenko is trying to build popular
sentiment against union.


Comment
--------------


20. (C) Comment: Exactly what the Constitutional Act means
for progress on the union state will largely depend on what
is in the CA. So far many of the main points remain
undecided or have not been made public. When a draft of
the CA appeared in the independent press in 2003, the then
Russian Ambassador in Belarus told the then U.S. Ambassador
that the CA was a meaningless document. This probably
remains true today. We agree with the Belarusian analysts
that strong progress on union is unlikely. Despite ten
years of talk, Russia and Belarus have made little
progress, and it is clear political will is lacking, at
least on the Belarusian side. Despite general agreements
on a single currency, Lukashenko publicly supports his
National Bank when they further delay introduction of the
Russian ruble. Lukashenko also lambasted Russia's incoming
Ambassador for stating his main task would be to bring
about union and put himself out of a job. After that
gaffe, Russia has not had an Ambassador in Minsk for five
months, and has yet to name a replacement.


21. (C) Comment cont'd: The union may be attractive to some
in both countries. Russia's hardliners would gain the
satisfaction of solidifying their sphere of influence and
preserving a buffer against NATO. However, Russia would
carry the political and economic burden of Belarus under
Lukashenko's dictatorship. But the Russian Federation
contains many such dictatorships within its current
composition. For Belarus, union would mean cheap energy
resources and presumably Russian capital flowing in to buy
out Belarusian firms. This could stimulate more reform,
but the Lukashenko regime would lose economic and political
power, while Belarus would clearly lose its de facto
independence, if Russia has its way. Under these
circumstances, it is easy to see why Russia pushes union,
while Lukashenko plays the reluctant bride. Ever the
clever politician, Lukashenko seeks to use the union issue
as he sees fit. After all, he created the concept years
ago, and now uses it adroitly, both against Russia and
domestically to keep himself in power. Belarus has not
implemented most of the reforms that Russia has, and is in
fact re-nationalizing what little Belarusian industry was
under private control. Belarus' tax and business laws are
overly complex and restrictive, to the point where GOB
officials do not even understand them. From the Belarusian
side, the GOB has actively hindered Russian companies
gaining control of Belarusian firms. Even the loosest
union would force Lukashenko to give up some political and
economic means of control. Such issues put further doubt

MINSK 00001347 005.2 OF 005


on union progress.


KROL