Kirill Koktysh

Russia Today: Both sides are hoping for some closer ties during this latest meeting. But let us look at the foundations for that co-operation, particularly in the political sphere. Both show quite strong anti-American rhetoric. What do you think is the main purpose of Mr Mahmoud Ahmadinejad’s visit to Belarus?

Kirill Koktysh: Well, I guess this anti-American rhetoric is just a sort of resolve for both presidents. But the main purposes for both presidents are quite different. For Mahmoud Ahmadinejad, Belarus is a European country and he is visiting Europe and so he is legitimated by Europe. For him Aleksandr Lukashenko is not a rogue, Belarus is not a rogue state and Mr Lukashenko is not a tyrant, but a usual European president. For Mr Lukashenko, paradoxically, President Mahmoud Ahmadinejad’s visit can be what he hopes to make his rush to Europe, because if as a result of this visit he will get the Iranian oil and the oil pipeline system Odessa – Brody, that means that the Iranian oil will appear in Eastern Europe and in Europe, too. Currently Iran is selling most of its oil to China. So this could be the bid for Mr Lukashenko to struggle for. And this is something that he can bring to Europe for Europe to accept him. So, if we want to talk about his underwater intentions, this could be his intention to make this rush to Europe, through Mahmoud Ahmadinejad’s visit. Well, after all, there is a possibility for military co-operation, but it is mostly hopes and rhetoric because Iran has no illusion that Belarus does not have up-to-date military technologies. But Belarus can hope to get some technologies from Russia which is a much more convenient partner for Tehran to acquire such technologies. So, I guess, it would be more or less rhetoric and public coverage that there are military preparations, but actually there is nothing but prospects for it. But there are prospects for co-operation in the oil sphere.

RT: How do you think that the rest of the world will view this meeting today? Are we seeing an emergence of a closer political partnership between these two?

K.K.: Lukashenko is not a partner you could rely on and I guess that Mahmoud Ahmadinejad has no such illusions about Mr.Lukashenko’s reliability. So, Mr Lukashenko is mostly interested in declarations and making the illusion of success, making PR but not the real politics. So it could convert into the real policy but actually if you look at Mr Lukashenko’s past, and at his previous successes you will see that he has reached little, actually. Most of his loud initiatives converted just into PR actions, nothing more.

RT: You touched on earlier the issue of energy co-operation between the two. Belarus had said that it wants to cut dependence on Russian energy supplies and look for ways to diversify its suppliers. Would you say that this is the main area of interest between Iran and Belarus, but also are there other potential spheres in the business area that you have suggested they could work together in?

K.K.: Well, if we take business reasons for such co-operations there are only few of them. Actually Iranian oil makes no market difference for the oil market in Europe currently, because Russia conducts a policy quite different from the Soviet one,  because the Soviet Union just wanted to demonstrate that it can impose an energy blockade like it did to Lithuania  in 1989. But the Russian Government and the Russian  leadership are acting according to market reasons. If one takes into account market reasons there is no sense to get additional oil but there is a political reason for it.

Earlier, Kiril Koktysh shared with Russia Today his view of the possible fallout of the recent Russia-Belarusian oil deal.

Experts say Belarus is strong enough to stand the current oil dispute with Russia. Mr Koktysh voices moderate optimism, pointing out that "Belarus does have a certain 'safety margin'. But, if we sum up what the country loses under the new oil and gas contracts, it makes a lot of Belarus's gross domestic product, which is a pretty hard blow. On the other hand, if we remember the essence of the recent Russia-Belarus dispute, we'll see it was not about punishing Belarus or undermining its economy, rather about closing the Belarusian oil-and-gas offshore loophole."

The way the oil-and-gas dispute has been resolved is going to make the life of Belarusian people harder, Mr Koktysh believes, as “just recently the gas price reached the level of $US 100 per 1,000 cubic metres, and now it’s soaring as high as $US 150 for Belarusian consumers. Moreover, private consumers in Belarus are going to put up with the price of about $US 160-170 per 1,000 cubic metres, translated into terms of household costs. So, in fact, the government has already reloaded the burden of new-rate payments on individuals. And here we have an interesting pattern: gas accrues about $US 7-8 to its price on its way from East Siberia to Russia, while on the short Russia-Belarus track it puts on another $US 50.”

Meanwhile, according to the expert, Russia has not lost anything in this deal, as its “objectives has been to introduce similar rules both at home and in Belarus. Speaking about oil, until recently Belarus - making best out of the customs agreements - used to enjoy custom duty rates different from those imposed on Russia: Russia had to pay export duty of $US 180 per ton, while Belarus kept the rate as low as $US 120, which made it possible for the country to offer offshore services to some Russian companies.”

In the recent dispute with Belarus “Russia’s objective has been to break off this routine, and it has succeeded in it,” underscores Mr Koktysh. “Now we can state as a fact that the offshore loophole has been closed; besides certain bilateral union agreements have been observed. That is, Belarus enjoys special lowered “union” prices. Meanwhile the practice of re-export of Russian oil has been blocked: now export duties for Belarus would make about $US 170 per ton, which safeguards Russian economy against losses.”

This oil and gas row has dealt a certain blow to Russia’s economical reputation internationally. Speaking about Western partners’ looking for alternative energy supplies, Mr Koktysh has pointed out that this has been going on for a long while, and “we have to remember that it’s a costly business which takes huge investments in the infrastructure. So until very recently this hasn’t gone beyond mere words. I think that, in any case, Russia will be the first to start diversifying its oil supplies.”

Certain measures have already been taken. “There have been orders to overhaul ways of alternative usage of the Druzhba pipeline,” says Mr Koktysh. “Now Russia can find alternative options for about 60% of the oil pumped through this pipeline. So, in case there should be another similar row, Russia will only have to work out alternative ways of pumping less than half of the current oil amount. Besides, I’m sure Russia is able to take necessary steps in advance to avoid such situations in the future.”

Earlier Mr Koktysh commented for Russia Today on the row between Russia and Belarus over the gas deliveries.  

The  authorities in Minsk refuse to accept Gazprom's higher gas price. The company threatens to stop its gas deliveries to Belarus, unless a mutually beneficial agreement is signed. In response, authorities in Minsk warned the Russian gas monopoly of disruptions of its supplies to other European countries if it cuts gas for Belarus.

Mr. Koktysh gives his opinion of the reasons for the current dispute between Russia and Belarus. To the question of whether it’s a pure business issue or a sign of cooling in relations between the countries he said " the relations between the two countries were based on the Union Treaty which was aimed at forming a unified state. That's what explains low prices on gas and oil and a number of other privileges provided to Belarus by Russia. The situation has changed since then. President Lukashenko’s campaign in March 2006 appeared to be a relief for Russia since it went off under the slogan of “For an Independent Belarus.”  Today only 6 % of the Belarus population would agree to integrate into any sort of a unified state. So, Russia was forced to come out of a tricky situation it got into because of that Union Treaty.  Now it’s all simply about introducing order and forming relationships between the two sovereign states: Russia and Belarus.”  

The analyst confirmed the information published in the CIS world fact-book that implies that much of Belarus' growth can be attributed to the re-export of Russian oil at market prices. 

“It is connected to the entire system of Russia-Belarus relations. To be more precise, re-export of Russian oil provides for 40% of Belarus export in general. That’s practically all the export to the EU states.  20 % of Belarus exports remaining are potash fertilizers and the other 40 % are exports to Russia. Therefore Russia’s found itself before the need to find a way of dismantling the relationship with the ally and changing the current paradigm, without turning out to be that evildoer, at the same time, that’s grabbing Belarus.”  

Kirill Koktysh also commented on his view of Belarus' reaction to recent events. 

“Talking about Mr Lukashenko’s reaction, there is a campaign underway against Russia's intended plans to absorb Belarus. That, to some extent, was due to unreasoned statements by Pavel Borodin, the Secretary of the Union of Russia and Belarus.” 

Our guest suggested possible solutions to the situation Russia has found itself in. 

“So, Russia has got into a delicate situation. On the one side, it should prove itself being not an aggressor and demonstrate that it definitely has no intentions to grasp anyone and thereby cease the speculation about the prolongation of President Putin’s term. On the other hand, there’s a need to achieve the primordial aim and build just and fair relationships between the countries.”  

Mr Koktysh sees the problem as a purely economic dispute with no political flavour. 

"In all likelihood, it would be quite a reasonable and logical outcome, but so far Russia has avoided politicizing the issue. This also applies to Georgia, Ukraine, Moldova and other members of the CIS. In every case the action by Russia was purely economic with no politicizing. In relation to Belarus, I doubt Russia will resort to politicizing the issue although it probably would be correct because the supporters of a so-called Unified State, as it was designed, are abundant in Russia, but not the 80% like it was in the 1990s – currently they amount to around 30%. In this respect, the Russian leadership would not like to aggravate the political situation in Russia and place some political claims before Lukashenko, and turn the discussion into a political one. I think this would be a correct outcome but Russia will try to avoid it.” 

The expert thinks the current row will not affect the idea of the Unified State of Russia and Belarus as in its present form this idea is effectively dead. 

"The declaration by Mr Lukashenko claming he wants to have an independent Belarus, effectively buried the idea of a Unified State, because prior to it, for about 5 years, Lukashenko, who was fearing Russia's growing strength, launched an anti-Russia campaign. In this situation, to speak about political sympathies toward Russia in Belarus would be idle talk. So the Unified State, as the project by Yeltsin and Lukashenko, has already ended. It's could be possible to develop another Unified State. It should be created starting with a firm economic foundation – not from the political roof," Mr Koktysh believes.