BELARUS NEWS AND ANALYSIS

DATE:

08/08/2007

A Gas Stance that Deserves Good Marks

The Financial Times

At a time when Russia has often come under intense international criticism over its handling of disputes with neighbors and partners, it is worth noting that Moscow is behaving in an exemplary way in its current gas feud with Belarus.

For a start, Gazprom gave Minsk plenty of warning about the price increase at the heart of the dispute. It doubled prices Jan. 1 to $100 per 1,000 cubic meters but gave Belarus until the end of June before it started trying to collect the increased revenues.

Moscow then spent a month negotiating with Minsk before this week threatening to halve gas exports. Knowing the possible impact on European Union customers supplied via Belarus, Russia notified its downstream customers and the European Commission, the executive branch of the EU. Gazprom even organized a special telephone conference for foreign journalists to explain its actions.

Moscow has also been careful to avoid bringing politics overtly into the dispute and has even brought matters to a head in the summer. It is all a far cry from the last time Russia turned off the taps -- in its dispute with Ukraine in the winter of 2005-2006, when Moscow ran into a storm of criticism from the EU for giving no warning to its customers and for acting in a provocative way.

Of course, Belarus is not Ukraine. While President Vladimir Putin is often irritated by the maverick policies of Belarussian President Alexander Lukashenko, he does not see him as a serious threat to the Kremlin's efforts to reimpose political dominance on the former Soviet Union. By contrast, Viktor Yushchenko, Ukraine's president, is openly working to reduce Russian influence in his country by increasing links with the EU and NATO. Therefore, Putin has much less cause to lose his temper over Minsk.

What seems to have provoked the Kremlin's wrath is the sense that Lukashenko is taking advantage of Russia. Even after the price increase, Belarus receives the cheapest gas in the former Soviet Union. In general, Moscow is correct to end Soviet-era subsidies and charge its customers market prices for gas. Countries that want better terms face demands for a quid pro quo, usually in the form of selling energy assets to Russian companies.

Given the Kremlin's penchant for political meddling, these processes are often more complicated than they should be. Handling disputes in a predictable manner will not solve every problem, but, as the case of Belarus shows, it certainly reduces tensions.

Transparency in gas supply is in the interests of both Russia and its customers.

This comment appeared as an editorial in the Financial Times.

Source:

http://www.themoscowtimes.com/stories/2007/08/08/005.html