International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Russian opposition activist Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
COVID-19 and Trump’s indifference helped human rights abusers in 2020
Russian opposition activist Navalny calls for supporters to take to the streets this weekend
One of Russia’s biggest wood product companies, Segezha could be Sistema’s next IPO
New Ukrainian VC firm QPDigital aims to invest up to $100 million in digital startups
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Estonian premier quits after Tallinn development scandal
Czech Pirates and Mayors approve final coalition agreement for 2021 elections
OUTLOOK 2021 Czechia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
OUTLOOK 2021 Hungary
Hungarian government remains silent after Capitol riots
World Bank expects modest recovery for Europe and Central Asia in 2021
OUTLOOK 2021 Slovakia
FDI inflows to CEE down 58% in 1H20 but rebound expected
Slovakia to invest €1.2bn in digitisation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
BALKAN BLOG: The controversial recipe for building up Albania
Heavy flooding causes chaos in parts of Southeast Europe
Vodafone Albania plans €100mn infrastructure investments after AbCom merger
Turnover rose on Bosnia's two stock exchanges in 2020 while prices fell
Storming parliaments: New Europe's greatest hits
Kyiv accuses Bosnian President Dodik of lying about icon gifted to Russian foreign minister
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
ING THINK: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
Zagreb Stock Exchange's Crobex10 index at highest level since March 5
OUTLOOK 2021 Kosovo
Arrera Automobili aims to launch Albania’s first supercar
OUTLOOK 2021 Moldova
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Moldova’s PM resigns to prepare the ground for early elections
Montenegrins say state administration is most corrupt institution
75% of Montenegrins want EU membership
Montenegro’s new ruling coalition carves up top state jobs
North Macedonia's manufacturing confidence indicator down by 8.5 pp y/y in December
OUTLOOK 2021 North Macedonia
Transparency International warns of high corruption risk in CEE defence sectors
OUTLOOK 2021 Romania
Romania’s central bank cuts monetary policy rate by 25bp to 1.25%
Romanian construction companies' activity slows in November after intense 2020
OUTLOOK 2021 Serbia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
Slovenia’s dire COVID-19 situation in 4Q20 caused second economic dip
Turkcell denies any affiliation with $1.6bn loan in default extended by Ziraat Bank to Virgin Islands company
BEYOND THE BOSPORUS: Let’s tentatively pencil in a date for Turkey’s hot money outflow
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
Armenia’s PM cautions conflict with Azerbaijan “still not settled” after trilateral meeting with Putin
OUTLOOK 2021 Georgia
Georgia’s political kingpin Bidzina Ivanishvili quits politics
Modern-day “Robin Hood” inspires Georgians drowning in debt
Durov rejects Western funds’ offer to buy 5%-10% of Telegram with $30bn valuation
Iran’s navy conducts missile drill while analyst argues Trump even capable of nuclear strike in final days
TEHRAN BLOG: Who’s more credible? Johnson backing Trump’s Nobel chances or Iran applauding arrest warrant for US president?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
OUTLOOK 2021 Kyrgyzstan
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
OUTLOOK 2021 Tajikistan
China business briefing: Not happy with Kyrgyzstan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
Turkmenistan: The dammed united
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
OUTLOOK 2021 Uzbekistan
Download the pdf version
Despite popular opinion and Belarus’ status as Russia’s closest ally, the relations between Lukashenko and the Kremlin have never been particularly cordial. The conflicts began back in the late 90s when former president Boris Yeltsin banned Lukashenko from visiting Russian regions in what looked more like his campaign for the Russian presidency.
Lukashenko hasn’t always been the Kremlin’s unconditional number one choice either. In fact, the question of whom Russia is going to back had been brought up at least three times – in 1996, 2001, and 2010.
The first time was during the constitutional crisis of 1996 when the parliament initiated the impeachment proceedings against Lukashenko. Russia had to urgently send its delegation headed by Prime Minister Viktor Chernomyrdin to Minsk. The delegation listened to both the president and the speaker of the parliament Semyon Sharetsky, and in the end, decided to back the former.
By the time of his second election in 2001, Lukashenko's position was still relatively shaky. The economy had just begun recovering from a crisis and a scandal was raging in the country following the disappearance of the opposition politicians. In addition to that, Lukashenko started purging the ranks of his officials, which caused widespread discontent among the ruling elite.
Russia has long waited for a single opposition candidate to emerge. In a way, Lukashenko was only saved by the opposition’s ineptitude. It could not decide on a single candidate until it was too late and Russia decided to back Lukashenko; under one condition: the privatisation of several Belarusian state-owned enterprises under the so-called Seleznev’s list.
After winning the election, Lukashenko “dumped” his Russian well-wishers, as he did many times afterwards.
About the same time, Russian President Vladimir Putin came to power, and the Kremlin’s relationship with Minsk soured further. Lukashenko's relations with Putin are known to be extremely cool, while those with former Prime Minister and President Dmitry Medvedev are almost openly hostile. The same is true in terms of the relations with Putin’s inner circle, first of all, Gazprom, with which Belarus has sharp conflicts every other year.
It doesn’t mean that Lukashenko had no allies in Russia. He did. First of all, it was Moscow mayor Yuri Luzhkov, Gennady Zyuganov’s Communists, a number of officials and oligarchs, like Boris Berezovsky, Sberbank CEO German Gref, politician Boris Gryzlov and others.
Even though many in Russia did not particularly fancy Lukashenko, he strengthened his power so much that for many years it was impossible to even think that there might be some alternative. For the past 20 years, the only permitted opposition in Belarus were pro-Western nationalists, with whom Russia could not and did not want to have anything in common.
One of the pillars of the Lukashenko regime’s stability is his monopoly on “pro-Russianness.” Any attempts to create an alternative pro-Russian political force bypassing the president are immediately blocked by Belarusian special services.
At the same time, Lukashenko himself, while constantly reaffirming his eternal friendship with Russia, has never been too eager to make any real concessions. The soap opera with the sale of Beltransgaz to Gazprom in 2011 – the national gas pipeline network operator and a key piece of energy infrastructure – dragged on for almost ten years and caused a series of oil and gas wars between the two countries. The tension culminated during the 2010 election campaign, when the Kremlin openly opposed Lukashenko, cut off almost all the subsidies, and virtually forced him to capitulate just one week before the election day. In return for the renewed Russian support, Lukashenko joined the Russia-led Customs Union that later became the Eurasia Economic Union (EEU), and finally sold Beltransgaz.
But in the majority of cases, Russia was left with nothing. Despite numerous negotiations, Belarus hasn’t sold Minsk-based MZKT company, the manufacturer of chassis for Russian mobile Topol-M launchers. The same is true for other Belarusian enterprises, which attracted the interest from Russian oligarchs, especially the country’s two modern oil refineries, Grodno AZOT plant and the potash plant in Soligorsk – all major money-makers.
The Kremlin kept pushing. Lukashenko kept resisting. This was the case with the deployment of the Russian military base in Belarus before the 2015 election. The Kremlin has long lusted after a military base in Belarus, which shares a border with the EU, but with no joy. So were Russia’s demands last year for Belarus to finally fulfil its obligations to form the Union State that would deepen the integration between the two countries and included a common currency among other ideas.
In 2018, Mikhail Babich was appointed Russian Ambassador to Belarus, who immediately became Lukashenko’s biggest foe. Babich attacked Lukashenko, met with the opposition, openly interfered in Belarus’ domestic politics, and behaved like he was the one in charge. Lukashenko almost begged Putin to recall Babich in exchange for deepening the integration.
Lukashenko irritates a lot of people in Russia, while the number of his powerful allies decreases year by year. His old-time cronies Berezovsky and Luzhkov are both dead. Last year, Russian security services destroyed the Lukashenko-linked business conglomerate of the Khotin brothers, one of the largest real estate tycoons in Moscow. Perhaps, Lukashenko’s most powerful ally today is Russian billionaire Mikhail Gutseriev, but his companies are also going through a hard time.
The Kremlin pushes even harder, while Lukashenko has less and less room for manoeuvre. During this election campaign, it was not the Kremlin but Lukashenko who decided to escalate. Last month, Belarus security forces arrested the entire top management of Gazprom-owned Belgazprombank, and arbitrarily appointed a new administration. Gazprom doesn’t seem willing to put up the appropriation of its bank and refuses to even meet with the new management.
Finally, there as the scandal of the detention of 33 Russian mercenaries in Minsk just before the presidential elections. Medvedev said this week that the attempts by the Belarusian authorities to turn Russia into an enemy for the sake of Lukashenko’s domestic political agenda will have “grave consequences.”
It doesn’t necessarily mean that the Kremlin is now going to support the opposition headed by Svetlana Tikhanovskaya. No. But it won’t try too hard to help Lukashenko either. Most likely, the Kremlin will abstain from any direct involvement and remain one the sidelines. On the one hand, Lukashenko is still the most convenient candidate for Russia. He is very well-known in Russia and his limitations are well understood. Most importantly the Kremlin is certain that under Lukashenko Belarus will never turn to the West.
On the other hand, all the leaders of today's Belarusian opposition –Svetlana Tikhanovskaya, the arrested Viktor Babariko, or the escaped Valery Tsepkalo – are not classic pro-Western nationalists. They do not demand Belarus' immediate membership in NATO and don’t oppose close relations with Russia. The only reason they are not convenient for the Kremlin is the same reason why Lukashenko is – they are unpredictable.
The ideal scenario for Russia would be a weak Lukashenko remaining in power. But given all the above and especially Lukashenko’s recent hostile actions, it becomes increasingly likely that if the situation in Belarus gets out of his control, the Kremlin might turn its back on him and let him fall. The Kremlin won’t force him to leave but wouldn’t mind if he did either.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at firstname.lastname@example.org
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: