|Author: Mamuka Komakhia, Analyst
Review period: March 16-31, 2020
Russia claims regional hegemony in the post-Soviet space and considers that strengthening Western positions in the region poses a threat to its national interests. The purpose of our review is to provide readers with information about important events related to Russia’s policy in the post-Soviet space. The review is a biweekly publication and will be useful for everyone – decision-makers, public employees, media representatives and other people who are interested in the ongoing processes in post-Soviet countries.
New Coronavirus and Challenges of the Eurasian Economic Union
Main Event: The member states of the Eurasian Economic Union challenged by the threat of the new coronavirus closed their borders to prevent the virus spread, including with the Union member states.
Event in Details: The member states of the Eurasian Economic Union took precautionary measures over the threat of the virus spread in early March. The Central Asian countries had to make radical decisions such as canceling Nowruz celebrations, on March 21, and ceremonial parades related to the victory in World War II, on May 9.
The Chairman of the Eurasian Economic Commission, Mikhail Miasnikovich, called on the Union members to work out joint measures to fight against the virus spread. He said the pandemic has already affected the shipment of goods, creating problems with monetary policy as well.
The Union members discussed existing challenges during a video conference on March 16. Most likely, a meeting of the Union prime ministers, scheduled for April 9-10 in Minsk, will be held remotely.
Challenges: The member states of the Eurasian Economic Union face several challenges, some already on the horizon, including from a humanitarian prospective, and some soon to emerge. Citizens of a member state of the Union located either in a member state of the Union or the CIS will not be able to travel. Labor migrants from Central Asian countries, who traditionally travel to Russia during the spring, face problems as well. The border restrictions stopped movement between Russia and these countries by air or land. Migrants whose legal stay in Russia expires can no longer return to their homeland.
In the next few months, the migrant crisis will especially affect the economy of Kyrgyzstan, the weakest country in the Union. There are many labor migrants from Kyrgyzstan to Russia who send their families remittances. Due to the problems in the field of the economy, the unemployment rate of labor migrants to Russia will increase and, consequently, the income of the country will decrease.
Closing borders has a negative impact on trade and economic relations. The fall of oil prices will result the devaluation of the Russian ruble. This will have a special impact on the member states as Russia is the main member state of the Union.
Belarusian Position: Belarus, unlike the member states of the Eurasian Union and many other countries in the world, has a special vision on how to overcome the crisis. The Belarusian leader, Aleksander Lukashenko, refused to close the border and quarantine. Minsk focused on control and isolation. Lukashenko called the situation created by the new coronavirus – a psychosis. He expressed outrage at Russia’s decision to unilaterally close its border with Belarus (the border between the two countries is not demarcated). According to Lukashenko, this will deal a big blow to the economy; however, the move will not help fight against the virus.
Impact of the New Coronavirus Pandemic on the Integration Processes: The global crisis challenged the combined anti-crisis capabilities of the Eurasian Economic Union and many regional and international organizations. The lack of joint mechanisms to fight against the crisis will hamper the integration processes within the Union in the short run and push the member states to take selfish steps.
Soviet Nostalgia Among Russians
Main Event: According to a poll conducted by the Levada Center, an independent and authoritative research agency, 65% of Russians in Russia regret the dissolution of the Soviet Union and 75% consider the Soviet era the best period in the country’s history.
Event in Details: The Levada Center conducted a survey in 137 cities and 50 regions of Russia. Three-to-four years ago, 56% of the population regretted the collapse of the Soviet Union. In 2012, this number was 49%. The number of people who do not agree with the opinion that the Soviet period was the best in the history of the country totals only 18%.
According to researchers, in Russia the phrase “Soviet era” is most associated with the stability and the belief in the future (16% of respondents) and a good life in the country (15%). According to the study, this approach is typical not only for the older generation who lived in the Soviet Union but also for the younger generation who were born in the post-Soviet period. The popularity of the Soviet period among the youth is explained by the fact that the memory of a “good life” in the Soviet Union is preserved through both internal family and institutional means such as state media which raise awareness about the Soviet Union among the younger generation in a way that they also feel a sense of belonging to the “powerful state.”
Why the Event is Important: The Russian President, Vladimir Putin, considers modern Russia to be the legal successor of the Soviet Union. During his reign, propaganda of the role of the Soviet Union in the Soviet era, and especially in World War II, became a priority for the state. The mood of the population is the result of this powerful propaganda which Putin uses for internal political consolidation and solving foreign policy tasks in a “hostile environment.”
Six Years Since the Annexation of Crimea
Main Event: Despite the coronavirus pandemic, the Russian President, Vladimir Putin, visited Crimea on March 18, 2020 on the occasion of the sixth anniversary of the annexation of Crimea by Russia.
Vladimir Putin in Sevastopol. Source: Web-page of the Russian Presidential Administration
Event in Details: During the visit Putin met with representatives of the Crimean and Sevastopol communities. He also awarded his old friend, Arkady Rothenberg, the Order of the Hero of Labor for the construction of the Crimean bridge that connected the peninsula to the mainland of Russia, a project valued at USD 3.7 billion. The 19-kilometer road bridge was opened in 2018 and the railway bridge – last year. Putin described the construction of the bridge as a dream of many generations. He said that even the Russian Empire and the Soviet Union had been dreaming about this.
Following the events in Ukraine, a referendum was held on March 16, 2014 on the Crimean peninsula with the support of Moscow. On March 18, Putin signed an agreement on the integration of Crimea into Russia.
Despite the economic challenges, a poll conducted by the Levada Center in December 2019 showed that the number of supporters of the integration into Russia, especially among local Russians and Ukrainians, is still high – 82%. However, in the last six years supporters of local Crimean Tatars (12% of the population) has also increased from 39% to 58%.
After the annexation of Crimea, the demographics of the peninsula gradually changed. Most of the anti-Russian Ukrainians and Crimean Tatars left the peninsula. Instead of them, people from Russia, including military personnel and their families, settled on the peninsula.
Over six years, Moscow subsidized more than USD 10 billion in Crimea.
Position of the West: On the sixth anniversary of the annexation, the European Union criticized Russia for increasing militarization and human rights abuses in Crimea. The construction of the Crimean bridge and the opening of the railway line without the consent of Ukraine, the change of the demographic balance through the resettlement of civilians from the peninsula, the deterioration of the ecological situation after the annexation and the illegal detention of citizens who are anti-Russian were also criticized. A number of Russian officials and companies fell under the sanctions lists of the EU, the US and Canada due to the annexation of Crimea.
Why the Event is Important for Russia: For Putin, the annexation of Crimea is one of the most important events as he continues the process of “reclaiming lost lands” for Russia. Crimea was one of the first targets and Putin “reclaimed” the peninsula without bloodshed; however, at the cost of international sanctions. A land connection to the peninsula is also a symbolic expression of the “reclaim.”
Belarus and Russia Agreed on Oil Price
Main Event: According to the Belarusian Ministry of Finance, Belarus will receive Russian oil in April on the terms requested by Minsk. At this stage, Minsk is in the process of selecting suppliers to expand the circle of alternative oil suppliers.
Event in Details: According to the President of Belarus, Aleksander Lukashenko, the prime ministers of Belarus and Russia reached an agreement on the price of Russian oil on March 21. The issue has become topical since January 2020 when Russia refused to supply oil to Belarus at a reduced price as has been the case since the 1990s.
The main novelty of the new agreement is the so-called premium compensation to the Russian supplier which could reach USD 90 million by 2020. According to the prime minister of Belarus, Russian companies will reduce the premium for oil supplies by USD 7 per ton from USD 11.7 to 4.7. In fact, Belarus will not pay this premium and it will be compensated from the Russian budget. Moreover, Belarus is currently in the process of selecting companies that offer the best payment terms. At the same time, Minsk will consider how the companies cooperated during the difficult period for Belarus (January-March) when Russia significantly reduced oil supplies to Belarus.
Alternate Oil: Belarus is actively expanding the circle of alternative oil suppliers to replace Russia. In January, Belarus received the first alternate oil from Norway. In March, the country received 250 thousand tons of Azerbaijani oil, including 85 thousand tons via the Supsa terminal. In total, Belarus will receive 1 million tons of Azerbaijani oil in 2020. Azerbaijani oil is loaded from tankers to the port of Odessa and then delivered to the destination via the Odessa-Brody and Brody-Mozyr pipelines.
Talks on oil supplies are also underway with Saudi Arabia. The US State Department said US companies were ready to sell oil to Belarus immediately at a competitive market price.
Oil Received by Belarus in 2020: In the first two months of 2020, Russian oil supplies fell by 80%. Under the governmental agreement, Russia will supply Belarus with 24 million tons of oil annually (two million tons per month) – 18 million tons for two refineries and 6 million tons for transit. Currently, Belarus does not receive the agreed amount of oil from Russia. Respectively, the Mozirsk and Novopolotsk Belarusian oil refineries received 32 thousand and 246 thousand tons of oil from different sources in March.
Why the Deal Failed: Despite intensive negotiations, the Belarus-Russian deal was fueled by disagreements between OPEC and Russia over cuts in oil production and the new coronavirus pandemic that reduced the demand for oil and sharply pushed down oil prices.
Why Russian Oil Import is Important for Belarus: In March, amid a sharp drop in oil prices, Belarus found itself in a favorable environment and even buying Russian oil became profitable for Minsk. Until 2024, Russian oil will continue to be the most profitable for Belarus since its price will be cheaper. Under the current conditions, Azerbaijani or Kazakh oil will be 15-17% more expensive.
Why the Event is Important for Russia: Due to a sharp drop in world oil prices, Belarus finds it profitable to cooperate with other importers as well. This could lead Russia to lose a key market and have to compete with other exporters. For this reason, Moscow agreed to export oil on Belarusian terms.
Anti-Russian Government of Moldova
Main event: On March 16, 2020, leaders of the Socialist and the Democratic parties in Moldova announced the formation of a new coalition government.
Event in Details: On March 16, despite the new coronavirus pandemic, a new coalition government was formed in Moldova with 59 votes in favor out of 101. With the formation of the new government, the informal majority, consisting of the Socialist and Democratic parties, has become formal.
On November 12, 2019, the coalition government of the ACUM pro-Western Party and the pro-Russian Socialist Party, whose informal leader was the President Igor Dodon, was dissolved. On November 14, a new minority government of the Socialist Party was formed with the parliamentary support of the Democratic Party and with pro-Russian figures predominating. By virtue of the March 16 agreement, the Socialists and the Democrats agreed to form a coalition government and distributed government portfolios. The pro-Western Democratic Party won five government posts: Deputy Prime Minister for Reintegration, Minister of Foreign Affairs and European Integration, Minister of Defense, Minister of Education, Culture and Research, and Minister of the Economy and Infrastructure.
Why the Event is Important for the Pro-Russian President: Igor Dodon said: “We (the Socialists) formed an alliance with the Democrats as this was the only way out of the situation. Elections would be a bad scenario. Unlike last June (when the alliance was formed between the Socialists and the pro-Western ACUM bloc), today we have a strong position.” Dodon’s goal is to avoid early parliamentary elections and keep the government until the presidential elections, scheduled for the fall, which would be impossible without the support of the Democrats.
Why the Event is Important for the Pro-Western Democratic Party: The Democratic Party was in power from 2009 until last summer. The reputation of the party has deteriorated with its name linked to the loss of USD 1 billion from three Moldovan banks. The former leader of the party, the controversial oligarch Vladimir Plakhotnyuk who has been the country’s informal leader for years, fled Moldova and is on Russia’s international wanted list. The US also imposed sanctions on him. After losing power, the party is trying to “rebrand.” Returning to the government will help strengthen the party’s positions and give some advantage over the rival ACUM pro-Western political group.
Why the Event is Important for the West: The Democratic Party, a member of the new coalition and despite the controversy of the former leader, is seen as a pro-Western force and its leaders have good relations with political circles in the West and in Romania. The West considers that the coalition will weaken the country’s pro-Russian vector.
Why the Event is Important for Russia: The Socialist Party and the President Dodon, overtly pro-Russian, oppose the country’s leading parliamentary parties (ACUM, the Democratic Party) over foreign policy. The new coalition agreement does not envisage the development of relations with the Eurasian Economic Union – a concessions Dodon had to make in exchange for support from the Democrats. Pro-Western forces govern foreign policy and security. This will lead to the expansion of Moldova’s relations with the West at the expense of weakening relations with Russia.