MFA ON "SIGNIFICANT" SHIFT IN RUSSIA-BELARUS

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 004315

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/03/2017
TAGS: PREL PINR MNUC BO RU
SUBJECT: MFA ON "SIGNIFICANT" SHIFT IN RUSSIA-BELARUS
RELATIONS

REF: MOSCOW 4284


1. (C) Summary: Newly installed MFA Belarus Section Chief
Nikita Matkovskiy told us that since Russia began to "put in
order" its relations with Belarus in 2006, Russia has
observed "serious but necessary" changes in the behavior of
the Lukashenko regime. Matkovskiy underscored Russia's
determination to force the Lukashenko regime to honor its
contractual commitments to Russia, noting that Lukashenko
will no longer be able to turn to the Kremlin to delay or
reduce those commitments. However, Matkovskiy was equally
clear in his comments on Russia's continued interest in
maintaining a "special relationship" with the Lukashenko
regime and on Russia's evolutionary (as opposed to
revolutionary) approach to Belarus. Matkovskiy dismissed
alleged statements from the Russian ambassador in Belarus
about Russian nuclear weapons being deployed to Belarus as a
"misinterpretation." End Summary.

There Is A Special Relationship, But...
--------------


2. (C) On August 31, new MFA Belarus Section Chief Nikita
Matkovskiy told us in unequivocal terms that Russia and
Belarus will always have a "special and intense"
relationship. He noted that despite the increase in energy
prices and a "market-based approach" to trade relations,
Belarus still enjoys unique privileges and access to the
Russian market. However, Matkovskiy pointed out that
beginning in 2006 Russia initiated "a significant
transformation" of its bilateral relationship with Belarus
and "remains committed to the new course."


3. (C) Matkovskiy explained that for years Belarus failed to
honor "its political and contractual obligations" to Russia,
while Russia "faithfully" upheld its end of the bargain. In
Spring 2006 the decision was made to "put in order" its
relations with Belarus and, "whether it liked it or not,"
wean the country off of Russian largesse. Matkovskiy
stressed that Russia's new approach to Belarus is gradual and
not aimed at causing economic or political instability.
Rather, Russia believes it is "helping" Belarus slowly
integrate into the global economy.

Tough Love Part of the New "Modus Operandi"
--------------


4. (C) When asked to what extent Russia was prepared to
watch the Lukashenko regime suffer under the pressure of
higher energy payments, Matkovskiy noted that Belarus is
currently facing a serious budget crunch and depletion in its
currency reserves, and yet there are no GOR plans to bail
Lukashenko out. He cited as an example of the "new modus
operandi" Lukashenko's attempts to postpone or reduce
Belarus' payment to Gazprom for gas received in the first
half of 2007. Matkovskiy revealed that Lukashenko sought a
private meeting with Putin in this regard, but Lukashenko was
told to direct his grievances to the leadership of Gazprom,
underscoring that the dispute was an exclusive concern of the
"involved economic entities" (Gazprom and Belarusian gas
monopoly Beltransgaz). In the end, Matkovskiy claimed
Lukashenko was forced to pay Gazprom from his presidential
stabilization fund.

Economic Reform Is Inevitable, Maybe Even Political Reform?
-------------- --------------


5. (C) Matkovskiy argued that the new terms of agreement
between Russia and Belarus should serve as sufficient
incentive for the latter to undertake economic reforms.
According to Matkovskiy, Belarus recently sold its large
mobile telephone company, Velcom, to a Cypriot company in a
secret and last-minute deal worth USD 700 million.

SIPDIS
Apparently, Belarus had to complete the deal quickly to help
avoid a collapse in the currency market. Matkovskiy stated
that the absence of a tender or open competition prior to the
sale is not the way modern governments conduct business, but
at least the GOB understands that tough choices will have to
be made if it is to adapt to Russia's new terms of agreement.



6. (C) Matkovskiy noted that economic reform in Belarus
could even lead to political reform. When asked about the
type of political reform Russia envisioned for Belarus,
Matkovskiy restricted his comments to vague references of how
inevitable economic reform could have a positive impact on
Belarus' "atypical human rights situation and legislative
system."

Personal Relationship Between Presidents
--------------

MOSCOW 00004315 002 OF 002




7. (C) On Putin's personal relationship with Lukashenko,
Matkovskiy was quick to deny there was mutual animosity.
However, he conceded that there have been no
presidential-level meetings in 2007 (outside of brief
encounters in multilateral fora),in contrast to five such
meetings in 2006. Matkovskiy offered as possible
explanations for the sharp reduction in personal contact the
lack of urgency for these meetings and Putin's decision not
to engage Lukashenko on purely economic issues. Prior to
2007, Matkovskiy explained, most of the discussions between
Putin and Lukashenko focused on Russia's economic support of
Belarus - "not anymore." Matkovskiy added that Belarus and
Russia are strategic partners for a variety of reasons, but
not because of a close relationship between Putin and
Lukashenko.

Russian Ambassador Surikov's Remarks "Taken Out of Context"
-------------- --------------


8. (C) Matkovskiy categorically denied that Russia is
considering deploying part of its nuclear arsenal to Belarus,
stressing that such a step is fundamentally at odds with the
GOR position that a country's nuclear weapons should remain
on its own territory. (Note: FM Lavrov made similar
statements in an August 29 meeting with Senator Lugar. See
reftel. End note.) Matkovskiy maintained that after the MFA
examined the transcript of the interview, it was determined
that Russian Ambassador to Belarus Surikov was misquoted and
"is not in any danger of disciplinary action."
Comment
--------------


9. (C) Like most of our MFA contacts, Matkovskiy went to
great lengths to accentuate the positive aspects of
Russian-Belarusian relations, but he was unusually open about
Russia's frustrations with and plans for the Lukashenko
regime. It could be that Matkovskiy, who has been on the job
for only a few weeks, is too new to know any better.
However, Russia's undoubtedly tougher handling of Belarus
this year is consistent with the GOR's general approach in
the former Soviet space to elevate market relations above
past historical and political ties. That said, we have yet
to see any indications of Russian interest in removing
Lukashenko, which it believes is tantamount to fomenting
political instability in a key transit state for Russian
energy supplies to the West. Stability in neighboring states
continues to play a decisive role in Russia's foreign policy,
particularly as the Kremlin shifts more attention to
preparing for the parliamentary and presidential elections.

Burns