US embassy cable - 05MINSK1347

C O N F I D E N T I A L SECTION 01 OF 05 MINSK 001347 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 10/31/15 
TAGS: PREL, PGOV, BO 
SUBJECT: Belarus and Russia to Unite?  Not this Year 
 
Refs: (A) Minsk 904, (B) Minsk 499, (C) Minsk 1231 
 
Classified by Ambassador George Krol for Reasons 1.4 (B,D) 
 
1. (C) Summary: Reportedly on November 15, Presidents Putin 
and Lukashenko are scheduled to review the latest draft of 
the Constitutional Act on the Belarus-Russia union 
(although rumors now circulate that this could be postponed 
to December).  The draft has not been made public, and is 
reportedly incomplete.  It remains unknown what sort of 
union the Act envisions, although some details concerning 
the union parliament have been leaked.  The Act would have 
to be adopted in popular referendum in both countries. 
Several analysts have predicted Belarus would seek to hold 
its referendum concurrently with presidential elections, to 
give Lukashenko's inevitable "reelection" legitimacy.  Even 
if adopted, the Act may only provide for a lengthy 
transition to union, not union itself.  Belarusian analysts 
say Russia wants union, while Lukashenko does not. 
However, Lukashenko needs Russia, so he needs to appear to 
support the union politically, while working against it 
ever coming into force.  End summary. 
 
2. (U) On October 20, the commission preparing the draft 
Constitutional Act (CA) for the proposed Belarus-Russia 
union met in Moscow.  Participants in that meeting have 
told the press the draft CA will be reviewed by the Supreme 
State Council of the union state (i.e. Presidents Putin and 
Lukashenko) on November 15.  This cable explains what the 
CA is believed to be, and Belarusian reaction to this 
latest step towards union. 
 
 
The Easy Part is Done 
--------------------- 
 
3. (SBU) Participants in the October 20 meeting, namely 
Speaker of the Russian Duma Boris Gryzlov and Head of the 
International Affairs and CIS Relations Committee of the 
Belarusian parliament Vadim Popov, announced the CA is only 
90 percent complete.  Independent analysts argue the 
completed portion represents the easy decisions, such as 
creating a common customs space (for example, the two 
states have already unified 86 percent of tariffs).  The 
remaining ten percent contains markedly more difficult 
issues, such as whether there will be a union state 
president, what form union would take (a single state, 
something EU-like, or a loose confederation), or how to 
implement the proposed single currency. 
 
 
What is the Union State? 
------------------------ 
 
4. (SBU) The draft CA has not been made public, but from 
press comments it appears to be nearly identical to earlier 
draft CA's from 1999 and 2003.  If accepted, the CA would 
modify the constitutions of Russia and Belarus, but in what 
way depends on what the CA says.  The union state would 
have a bicameral parliament.  The upper chamber, the House 
of the Union, would consist of 72 senators, half from each 
Belarus and Russia seconded from the two countries' 
parliaments.  The lower chamber, the House of 
Representatives, would have 75 deputies from Russia and 28 
from Belarus elected directly in popular elections.  Press 
reports say a Prime Minister would head the union state, 
although one analyst claimed the CA does not outline how 
the PM is chosen.  Other press reports describe a 
presidency rotating between the Russian and Belarusian 
presidents.  One press source added the union state would 
also include a court and a Bureau of Accounts. 
 
5. (SBU) Popov told the press the Supreme State Council 
would be the highest body in the union state.  He outlined 
the hierarchy in the following example, "If the union 
government prepared a budget, it would be accepted by the 
union Parliamentary Assembly, but only the Supreme State 
Council could approve it."  Popov also stated the union 
state commission debated putting a union state presidency 
into the draft CA, but decided such a step was premature. 
 
 
So What Happens Next? 
--------------------- 
 
6. (SBU) All agree the CA would have to be approved by 
popular referendum in both Russia and Belarus.  Different 
experts have outlined different timelines.  Gryzlov 
predicted the referendum would be held in both countries on 
 
MINSK 00001347  002 OF 005 
 
 
March 12.  Pavel Borodin, State Secretary of the Union, 
said it would be in October or November 2006.  Lidiya 
Yermoschina, head of Belarus' Central Election Commission, 
explained the GOB's view in detail to Belarus' state press 
agency.  She said that if Putin and Lukashenko agree to the 
text on November 15, the CA would go to the Parliamentary 
Assembly of the Belarus-Russia Union for consideration. 
They would consider the draft and make changes through the 
end of January or the middle of February.  From there it 
would go back to Lukashenko and Putin.  If both presidents 
approve the text, they would send it to their national 
parliaments for ratification.  Yermoschina thought that 
would occur in mid-March for Belarus.  After ratification 
the two countries would announce public referendum on the 
CA.  Yermoschina stated, "It is wished that these would 
happen on the same day."  [Note: this implies it could be 
held on different days.]  As it would take three months to 
prepare any referendum, the earliest they could occur in 
this timeline would be mid-June.  [Note: Belarusian 
presidential elections have to be held no later than mid- 
July, so it is likely the GOB would hold the referendum on 
the same day, as it did with the October 2004 referendum, 
to distract from the presidential elections.] 
 
 
And then there is a Union?  Maybe Not 
------------------------------------- 
 
7. (SBU) Belarusian independent press has quoted Pavel 
Borodin, perhaps the most enthusiastic supporter of union, 
as saying the current Constitutional Act is only a 
transitional document.  He said the CA anticipates creating 
a six to seven year period of gradually phasing in the 
union state.  Both the 1999 and 2003 drafts, which were 
made public, were also transitional in character. 
Belarusian independent press has also picked up on a 
comment made by Gryzlov, where he said that only 
after/after the CA passed both referendum would it be 
published in the Belarusian and Russian press (implying the 
people would vote without knowing what is in the text).  It 
would then enter into force 30 days after the referendum. 
 
 
Belarusian Experts Skeptical 
---------------------------- 
 
8. (C) Econoff discussed the union state with Yaroslav 
Romanchuk on October 26 and Andrey Suzdaltsev on October 
28.  Romanchuk heads a political/economic think tank and is 
a deputy leader in the opposition United Civic Party. 
Suzdaltsev is an independent political analyst who wrote 
his dissertation on the union state.  Both had participated 
in a Gleb Pavlovsky-hosted discussion on the union state in 
mid-October in Moscow. 
 
9. (C) Despite the furry of press, Romanchuk does not think 
any serious progress towards union has been made.  He 
argued that, as always, the main unresolved issues are 
whether there will be a union president, and what form 
union will take (a unitary state, something resembling the 
EU, or a loose confederation). 
 
10. (C) Both agreed that Russia wants union, and Lukashenko 
does not.  [Note: Lukashenko's angry reaction to comments 
made by Russia's proposed Ambassador to Belarus in June, 
that he would be the last ambassador before union, bear 
this out Q ref A.  As a result of that flap, Russia still 
has no ambassador in Minsk.]  Romanchuk claimed the union 
is being pushed by Russian chauvinists out to recreate the 
USSR/Russian Empire, while Suzdaltsev opined Putin wants to 
create a greater pro-Russian bloc, and that Russia's elites 
see union as a natural development.  Lukashenko is against 
union because it would decrease his own powers.  However, 
Lukashenko needs Russia.  He is afraid of what he sees as 
Western efforts to unseat him in 2006, and wants Russian 
support when he runs for president.  Lukashenko also needs 
continued cheap Russian oil and natural gas, as well as 
easy access to the Russian market, to keep the Belarusian 
economy growing.  Suzdaltsev argued Lukashenko therefore 
needs to convince Putin he supports union, while really 
trying to forestall it. 
 
 
Will Lukashenko Sign the Constitutional Act? 
-------------------------------------------- 
 
11. (C) Romanchuk and Suzdaltsev both believe Lukashenko 
will probably sign the CA, and then schedule the referendum 
for the same day as Belarusian presidential elections (most 
 
MINSK 00001347  003 OF 005 
 
 
likely on July 16).  Both agree Lukashenko would use the 
referendum to solidify his reelection, but differ as to 
how.  Romanchuk stated Lukashenko would most likely 
"reluctantly" sign the CA, but then campaign against union 
and for Belarusian independence, thereby co-opting a plank 
in the opposition's platform.  Suzdaltsev thinks Lukashenko 
would campaign in favor of the referendum and then use its 
passage to give his own inevitable "reelection" legitimacy, 
as well as to ensure Belarus keeps getting cheap Russian 
energy.  However, Lukashenko would be careful to include 
language that mandates further discussions on union through 
2008 to make sure no real progress is made until after 
Putin leaves office.  In this way Lukashenko would use the 
referendum only to further his own political life while 
making no serious step toward union with Russia. 
 
12. (C) [Note: Suzdaltsev also stated Lukashenko is using 
the opposition to legitimate his reelection.  He allowed 
the 10+ coalition to hold its nomination congress in Minsk, 
against all predictions, to ensure there is an opposition 
candidate.  State media has so far not attacked that 
candidate, and will hold off until he officially registers 
as a candidate, at which point they will attack viciously.] 
 
 
Lukashenko under Pressure 
------------------------- 
 
13. (C) Romanchuk said his sources inside the GOB say 
Lukashenko thinks Russia is bluffing with this talk of 
union.  However, Lukashenko reportedly returned from his 
recent vacation to Sochi very depressed because "a number 
of Russians gave him ultimatums" that he had better accept 
the union.  Romanchuk believes the Kremlin will place 
serious pressure on Lukashenko two or three days in advance 
of the November 15 CA review to accept Russia's position on 
the outstanding issues.  (The Russian charge d'affairs 
recently told Ambassador that it looks like the November 15 
Putin-Lukashenko meeting may be postponed until December.) 
 
14. (C) Romanchuk has heard the Kremlin is considering 
replacements for Lukashenko in the event he does not sign 
the CA.  According to rumors, two possible replacements are 
State Control Committee head Leonid Tozik and former 
Prosecutor General Oleg Bozhelko.  [Note: Bozhelko had 
"resigned" after investigating the disappearance of 
prominent Belarusian opposition leaders.]  Romanchuk added 
that General Pavlov, a retired Belarusian general living in 
Moscow, claimed Putin recently met with Russia's preferred 
Belarusian presidential candidate.  Pavlov would not say 
who that person was, only that it is not Social-Democrat 
Aleksandr Kozulin.  Any Russian-backed candidate can be 
expected to expose Lukashenko's corruption or role in the 
disappearance of opposition figures as part of his 
campaign.  If Lukashenko in the end does not agree to 
union, Romanchuk believes the effectiveness of Russia's 
response (such as supporting a different presidential 
candidate) will be very indicative of Russia's real power 
in the near abroad. 
 
15. (C) Suzdaltsev claimed Putin is fed up with Lukashenko. 
He said in the past several presidential meetings, whenever 
Putin raises union Lukashenko quickly agrees, even before 
Putin stops talking.  Lukashenko then immediately reneges 
on whatever he agreed to.  In a meeting in Sochi in April, 
Suzdaltsev explained Lukashenko asked Putin for Russian 
support when he runs for reelection.  Putin agreed, if 
Lukashenko signs the CA.  Suzdaltsev believes Gazprom will 
be the best indicator of Russian intentions.  Despite 
Belarusian announcements, the two countries have not signed 
an agreement on gas deliveries for 2006.  When and on what 
terms a deal is signed will show whether the two sides have 
reached an agreement on union. 
 
 
Real Barriers to Greater Union 
------------------------------ 
 
16. (C) Currently there are very few tangible signs that 
Russia and Belarus have been developing a union seriously 
after ten years of discussion.  The border between the two 
is open, but Belarus is considering reimposing customs 
controls to limit losses in trade under new VAT rules.  The 
two countries have a common air defense system, but a 
Russian offer to provide for free S-300 missiles fell apart 
and Belarus is now paying USD 13 million for the system. 
Russia maintains two small military bases in Belarus, and 
Belarus conducts some military training in Russia.  Belarus 
was supposed to have adopted the Russian ruble in January 
 
MINSK 00001347  004.2 OF 005 
 
 
2005, but this has been delayed repeatedly as Belarus 
presented several improbable demands (ref B). 
 
17. (C) Despite ten years of talks, Romanchuk maintained 
Belarus' nomenclature, military and security services are 
all against union.  All would lose position and authority 
if Belarus lost independence.  Moreover, Lukashenko has 
carefully placed his own people throughout the government, 
who will follow his lead on union.  This is especially true 
in the BKGB, which Lukashenko purged to cut their ties with 
Russia's FSB.  Suzdaltsev, on the other hand, opined the 
Belarusian nomenclature does not like Moscow, but will 
grudgingly support union as they know Belarus cannot get 
gas from the West.  Romanchuk believed the Belarusian 
people increasingly oppose union.  [Note: according to the 
IISEPS September poll, only 13 percent of Belarusians 
support uniting with Russia into a single state, while 50 
percent support a looser union that would preserve 
Belarusian sovereignty; ref C.] 
 
18. (C) Suzdaltsev argued Lukashenko would also renege on 
agreements with Gazprom to privatize Belarus' domestic gas 
distribution network, Beltransgaz.  Both Romanchuk and 
Suzdaltsev asserted Belarus and Ukraine recently began 
repairing relations and are talking about presenting Russia 
with a united front to use Russian dependence on them for 
gas transit as leverage. 
 
19. (C) Suzdaltsev pointed out that GOB officials have by 
and large remained silent on union; most of the press 
statements are from Russian officials.  Belarus' state 
press has also been largely quiet.  On the other hand, 
Suzdaltsev claimed Belarusian state media has been quite 
critical of Russia since the beginning of summer.  He sees 
this as a sign Lukashenko is trying to build popular 
sentiment against union. 
 
 
Comment 
------- 
 
20. (C) Comment: Exactly what the Constitutional Act means 
for progress on the union state will largely depend on what 
is in the CA.  So far many of the main points remain 
undecided or have not been made public.  When a draft of 
the CA appeared in the independent press in 2003, the then 
Russian Ambassador in Belarus told the then U.S. Ambassador 
that the CA was a meaningless document.  This probably 
remains true today.  We agree with the Belarusian analysts 
that strong progress on union is unlikely.  Despite ten 
years of talk, Russia and Belarus have made little 
progress, and it is clear political will is lacking, at 
least on the Belarusian side.  Despite general agreements 
on a single currency, Lukashenko publicly supports his 
National Bank when they further delay introduction of the 
Russian ruble.  Lukashenko also lambasted Russia's incoming 
Ambassador for stating his main task would be to bring 
about union and put himself out of a job.  After that 
gaffe, Russia has not had an Ambassador in Minsk for five 
months, and has yet to name a replacement. 
 
21. (C) Comment cont'd: The union may be attractive to some 
in both countries.  Russia's hardliners would gain the 
satisfaction of solidifying their sphere of influence and 
preserving a buffer against NATO.  However, Russia would 
carry the political and economic burden of Belarus under 
Lukashenko's dictatorship.  But the Russian Federation 
contains many such dictatorships within its current 
composition.  For Belarus, union would mean cheap energy 
resources and presumably Russian capital flowing in to buy 
out Belarusian firms.  This could stimulate more reform, 
but the Lukashenko regime would lose economic and political 
power, while Belarus would clearly lose its de facto 
independence, if Russia has its way.  Under these 
circumstances, it is easy to see why Russia pushes union, 
while Lukashenko plays the reluctant bride.  Ever the 
clever politician, Lukashenko seeks to use the union issue 
as he sees fit.  After all, he created the concept years 
ago, and now uses it adroitly, both against Russia and 
domestically to keep himself in power.  Belarus has not 
implemented most of the reforms that Russia has, and is in 
fact re-nationalizing what little Belarusian industry was 
under private control.  Belarus' tax and business laws are 
overly complex and restrictive, to the point where GOB 
officials do not even understand them.  From the Belarusian 
side, the GOB has actively hindered Russian companies 
gaining control of Belarusian firms.  Even the loosest 
union would force Lukashenko to give up some political and 
economic means of control.  Such issues put further doubt 
 
MINSK 00001347  005.2 OF 005 
 
 
on union progress. 
 
 
KROL