Oiling the unrest in Belarus

Jun 15, 2011 12:00 AM

Two months ago Alyaksandr Lukashenka ordered to find more oil deposits in Belarus. He was visibly upset that his country did not have enough of its own oil and had to depend on Russia. After all, oil revenues help many authoritarian regimes to stay afloat for decades.
So far Belarusian geologists failed to discover new oil deposits in Belarus. Oil imports from Russia become increasingly expensive.

For over a decade, refining cheap Russian oil and selling oil products to the West has been a cornerstone of the Belarusian economy. Now Belarus has to share a large part of its oil profits with Russia.
Still, exporting oil products remains a lucrative business. With budget revenues dwindling the authorities are trying to seal Belarus Western borders to impose a state monopoly on reselling oil products to the West. These export restrictions and increased gasoline prices make many Belarusians angry.

Earlier, hundreds of cars blocked the centre of Minsk. Motorists were demanding lower gasoline prices.
Although the authorities subsequently imposed fines on the most active protesters, Lukashenka backed down on the next day and ordered to lower gasoline prices. The protesters enjoyed wide support of the public who helped to raise several kilograms of Belarusian money to pay the fines.

A few days later, gasoline-related protests erupted in other parts of the country. New restrictions on gasoline exports by shuttle traders caused the protests. It is no longer possible to frequently travel abroad with a full tank of gasoline. Angered by that, shuttle traders blocked the border crossing on the Polish-Belarusian border near Hrodna for several hours.
Police had to disperse the crowd using tear gas. They also detained over a dozen of protesters and sentenced them to large fines. The authorities also deprived fifteen protesters of the right to travel abroad for a year. Most of those people were shuttle traders who made their living by cross-border trade.

A similar accident occurred not far from Brest at the Varshauski Most border crossing. Around 100 people gathered at the Belarus-Poland border and demanded to cancel quotas on gasoline exports. There police did not have to use force and the protesters left after talking to the head of the administration of the Brest region.
There is more illicit cross-border gasoline trade. A hand-made pipeline was constructed underground to link Belarus with an unnamed neighbouring Baltic state. Belarusian smugglers pumped oil products through that pipeline. Belarusian KGB vowed to punish the smugglers and currently investigates the pipeline construction.

The government is also tightening export restrictions on other goods. Heavily subsidized state enterprises often produce cheaper goods compared to foreign equivalents. Consumers in other countries like it. In the past, when economic subsidies from Russia were more generous it was not a big deal.
But today the government completely banned exports of pastas, refrigerators, gas stoves, cement and other goods. These measures puzzle analysts because while Belarus can control exports to the European Union and Ukraine, the border with Russia remains open. This is where most of Belarusian goods, besides oil products, end up going.

Sviatlana Kalinkina observed in Narodnaya Volya that Belarusians were buying in Lithuania all they could: cheese, coffee, washing powder, butter, construction materials. The Lithuanians are happy to see the surging demand for what they sell and offer Belarusians discount cards. Belarus, on the contrary, imposed harsh export restrictions on nearly everything it produces.
This shows how unhealthy the Belarusian economy is. It will take more than reduction of gasoline prices to cure the economy and appease Belarusians.

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