Belarus-Ukraine: New emphases – open opportunities
Gennady Maksak

Summary

In 2010, development of bilateral relations between Belarus and Ukraine was substantially influenced by the change of political elites in Ukraine and involvement of the top echelons of both states in election processes. The beginning of the year was marked by mutual interest of the heads of state in neighborhood matters. The interest shifted to the government level by year end. This can be explained partly by the lack of progress in dealing with sensitive political issues and partly by the lowered degree of politicization of mutual relations following the rapid improvement of the Russian-Ukrainian relations. Despite all preconditions, the chronic issues like the undetermined legal status of the Belarusian-Ukrainian border and beginning of the demarcation process remained unresolved in 2010.
The usual emphasis on economic cooperation enabled to set up system-based frameworks for an upturn of bilateral cooperation and achievement of the pre-crisis sales turnover. Despite the underdeveloped systematic approaches and insignificant volumes, the cooperation in the energy sector has become geostrategic to a certain extent owing to the joint efforts put forth to arrange an alternative route for energy supplies to Belarus through the territory of Ukraine.
The 19 December presidential election in Belarus and Ukraine’s decision to second the OSCE Mission’s assessment added new parentheses to Minsk-Kyiv relations, which are likely to be shaped up more or less distinctly by mid-2011.

Tendencies:

• The new political elite of Ukraine did not reconsider the Belarusian-Ukrainian agenda leaving the basic plans unchanged;
• Contacts between the two governments were quite stable and fruitful throughout the year that made it possible to concentrate on finding solutions to particular problems, which both countries needed to address;
• In the economic sector, Belarus and Ukraine approached the commodity circulation close to the 2008 pre-recession peak;
• The high hopes for joint participation in EU Eastern Partnership projects deflated due to the EU’s undetermined foreign policy in this area;
• Kyiv’s decision to use the Odessa-Brody oil main in the direct mode for transportation of Venezuelan oil to Belarusian refineries was a symbolic act displaying a possibility of joint decision making aimed at energy security of the two states and the entire Eastern European region.

New emphases of usual agenda

The events that marked mutual relations build-up in 2009 created a realistic platform for their rethinking and opening of new directions conditioned by geopolitical transformations in the Eastern European region. Resumption of top-level contacts and stepped up completion of the regulatory and legal framework signaled a more pragmatic approach to pressing and vitally important problems waiting to be resolved by both states. In 2009, the Belarusian-Ukrainian political “thaw” had a distinct anti-Russian foundation.
Early in the year 2010, Ukraine and Belarus signed more than 180 bilateral documents including nine interstate, one inter-parliamentary, and 76 intergovernmental ones alongside a number of interdepartmental and inter-regional agreements.
Appreciable progress was achieved in the dialog with the Viktor Yushchenko Administration in 2009. When oppositional politician Viktor Yanukovich took office in February 2010, Minsk was quite optimistic at first. Lukashenko and Yanukovich spoke over the phone on February 20. Alongside routine congratulations on the election win, the two presidents touched upon matters related to bilateral relations. As soon as February 24-25, the president of Belarus made a working visit to Ukraine to attend the ceremony of his counterpart’s inauguration and discuss priority matters of mutual concern.
The Belarusian-Ukrainian agenda did not undergo a dramatic change with the coming to power of the new administration in Ukraine. Kyiv still regarded the status of the Belarusian-Ukrainian border as a key point together with infrastructural projects and an upgrade of trade and economic cooperation. It was clear though that the political component of bilateral relations related to the projects launched as part of the European Union’s initiatives would be recalibrated substantially in view of the new format of relations between Kyiv and Moscow.
As Belarus was approaching the presidential election scheduled for late 2010, it had to take account of Ukraine’s position when thinking over foreign policy priorities. Firstly, Minsk was losing an ally amid the heated confrontation with Moscow that obviously narrowed the room for maneuver. Secondly, Kyiv was not that eager to play the role of an intermediary between Brussels and Minsk anymore that gave less chance for Ukraine’s indulgent opinion of the democratic nature of political processes in the neighboring country.
Against the background of the shifted emphases in the bilateral agenda, the 2009 trend, i.e. quite intensive top-level communications, was still intensifying in 2010. During the very first meeting between the presidents of Belarus and Ukraine held in February 2010, the parties planned Yanukovich’s visit to Belarus in spring. A huge amount of work was done to arrange that visit. In 2009, the presidents mostly focused on joint actions under the Eastern Partnership projects, while in 2010, political negotiations included participation of the Ukrainian military in the parade timed to the 65th anniversary of the Viktory in the Great Patriotic War (1941-1945) in Minsk, and participation of Belarusian units in the 9 May parade in Kyiv.
It was symptomatic of the new format of relations that the Belarusian-Ukrainian intergovernmental joint commission for trade and economic cooperation, which was planning on holding a session on April 15 in Kyiv, served as a basis for bilateral communications. The primal questions included stepping up of trade and economic cooperation, trans-border cooperation, and energy projects.
It looked like the arrangements on ratification of the border agreement by Belarus and the consensus-based option of Ukrainian electric energy supplies to Belarus on preferential terms as redemption of Kyiv’s debt worked out in 2009 brought the parties closer to resolving the issues. On April 2, the House of Representatives of the National Assembly of Belarus ratified the Belarusian-Ukrainian border agreement, and the Council of the Republic did the same on April 26. It was a significant progress in bringing together both positions on the problem, which had been bothering the two states for a long time.
President of Ukraine Viktor Yanukovich made a working visit to Belarus on April 29 together with a delegation formed of vice premiers and ministers that indicated major importance of the visit for both states. Following the meeting, interdepartmental consultations, and expert discussions, the heads of state presented a plan of joint actions focused on Belarusian-Ukrainian cooperation priorities, the so-called “road map.”
However, May saw a malfunction in the well-tuned top level communication mechanism. Lukashenko was going to visit Ukraine in May 2010 to exchange ratifications of the worked out plan of joint actions. The visit was cancelled and no univocal official comments followed. Most likely Minsk did not want to make concessions on the issue of the status of the Belarusian-Ukrainian border – a matter of principle for the Belarusian government – after Kyiv reconsidered its position on supporting Belarus in the conflicts with Russia. Ukraine looked at this issue as one of the central problems and protraction of the case on the part of Belarus was rather painful for Yanukovich and his team.
At the same time, representatives of the diplomatic corps voiced the opinion that the presidents of Ukraine and Belarus had already made a strong contribution to development of bilateral relations and the governments should have taken it from there to maintain relations at the tactical level, while the border issue was still at the negotiation stage. The heads of state met twice more by the end of the year during various international events. No joint declarations concerning bilateral cooperation were made, though.
Since May 2010, most of the talks were held at the intergovernmental level. The first vice premiers, Vladimir Semashko and Andrey Klyuev, signed the road map on May 29 in Homiel. Considering that both countries had not drawn up a long-term strategic document to regulate the economic cooperation sector, the road map was kind of a pragmatic step towards each other. Officials said it could help to take the bilateral commodity turnover to the new record-breaking level of USD 7 to 8 billion. Revitalization of mutual trade could be achieved by setting up joint ventures to be engaged in exports to third countries and development of cooperation in such branches of industry as mechanical engineering, transport, and metallurgic engineering.
One of the road map paragraphs determined cooperation in transit of oil through Ukraine and supplies of Belarusian oil products to Ukraine. Given the situation in the region, this provision was a cornerstone of Belarus and Ukraine’s energy security.
In April, the first trial delivery of contracted Venezuelan oil – 80,000 out of four million metric tons – was made by sea to a Ukrainian port from where it was transported by railway to the Mazyr refinery in Belarus. On June 12, the Ukrainian Cabinet and the government of Belarus signed the agreement on cooperation in oil transportation to Belarus via Ukraine. From an economic point of view, the amount of Venezuelan oil was insignificant relative to the needs of Belarus’ petrochemical industry. But it was a clear and loud political signal that Belarus and Ukraine could unite efforts to actualize supplies diversification strategies.
For Ukraine, this project turned geopolitical rather than just economic when it came to transportation of oil not by railway but through the Odessa-Brody main in direct mode. In August, the Ministry of Transport and Communications of Ukraine approved the use of the Odessa-Brody main in direct mode on the condition that Belarus would guarantee pumping of more than 9 million metric tons of Venezuelan oil per year. As early as late October, Ukraine and Belarus signed a contract on the trial transportation of oil through the Odessa-Brody pipeline.
The first trial transportation to Belarus was arranged in late November 2010. After doing the math, the parties agreed that the transportation was economically efficient and the pipeline system was ready technically. This project will be continued in 2011, but it is obvious that there is more strategic pragmatism in the energy sector now that affects energy security of the Eastern European region in the context of the present-day threats and challenges.
Officials of Belarusian-Ukrainian institutional departments continued regular meetings. Defense and foreign policy agencies were quite active too.
Ukraine appointed a new ambassador to Belarus in the middle of the year. On June 14, after two months of tenure of appointment, Plenipotentiary Ambassador of Ukraine Roman Bezsmertny presented his credentials to President of Belarus Lukashenko. It is worth noting that Mr. Bezsmertny was appointed ambassador by President Yushchenko when the latter was already vacating his office. His motivation to appoint the former party associate is unclear. It is however symptomatic that neither the new president of Ukraine, nor the foreign minister disputed Yushchenko’s decision.

Election processes as an accelerator of bilateral relations policy

Attention should be paid to Belarusian-Ukrainian relations in the context of the presidential election in Belarus in December 2010. Although the election outcome was easy to predict, official Kyiv did not openly declare support for the incumbent president of Belarus, and did not single out any other candidate for the position. If to have a look at the election programs, it would be apparent that the presidential candidates did not pay much attention to Belarus and Ukraine’s mutual prospects.
At the same time, official Minsk was very much interested in recognition of the election results by Kyiv as well as CIS monitoring missions invited to oversee the election in Belarus. With this objective in view, the Belarusian government invited representatives of the Communist Party of Ukraine and observers from the border regions of Ukraine. During the briefings held by election commissions on December 20 in the regional centers of Belarus, the election was expectedly recognized democratic and free considering many aspects including the very procedure of “monitoring.”
But the official position of Ukraine was quite different from what the Ukrainian monitoring mission pronounced. On December 21, the Ukrainian Foreign Ministry said Ukraine was concerned over the “inadequate” use of force in relation to the opposition and mass media during the 19 December election and that Ukraine was going to be guided by the election assessment made by international observers delegated by the OSCE.
The 19 December presidential election in Belarus and Ukraine’s decision to second the OSCE Mission’s assessment added new parentheses to the Minsk-Kyiv relations system, which is likely to be shaped up more or less distinctly by mid-2011.

Economic recovery

In 2010, Ukraine remained one of the major trade partners of Belarus and was the second largest partner in terms of commodity turnover. Efforts of the Belarusian-Ukrainian intergovernmental commission for trade and economic cooperation greatly contributed to this success. The commission held two sessions in April and September 2010 to address expansion of bilateral cooperation.
Both states worked hard on the regulatory and legal framework last year (they signed four international economic agreements including the road map), but they still have not developed a strategic contractual basis capable of setting a right vector for economic development in view of the latest global and regional transformations. The Interstate Program for Long-Term Economic Cooperation between Belarus and Ukraine in 1999-2008 and the Belarusian-Ukrainian agreement on economic cooperation in 1999-2008 expired in 2008. No new long-term regulatory platform has been offered yet.
Belarus has not ratified the intergovernmental agreement on free trade signed in 2007 that opens the possibility of mutual restrictions aimed at protection of the home markets. After Belarus joined the Customs Union with Russia and Kazakhstan, resolution of this issue was postponed indefinitely. In May 2010, the two governments adopted an action plan focused on cooperation priorities, which is certainly an accomplishment, but this plan is only a mid-term plan.
Formation of the institutional component of trade and economic cooperation between Belarus and Ukraine continued in 2010. An advisory council was established on May 29 in Homiel within the framework of the 10th Belarusian-Ukrainian Business Council, which sat in session on June 16-17 in Vitebsk, following the working meeting between First Vice Premier of Ukraine Klyuev and First Assistant to the Prime Minister of Belarus Semashko.
Owing partly to recovery of the Belarusian and Ukrainian economies and partly to the system measures taken to upgrade trade and economic cooperation, the 2010 commodity exchange amounted to USD 4,439.9 million. The share of Belarus’ export reached USD 2,562.3 million and imports stood at 18,776 million with an external surplus of USD 684.7 million.

Dynamics of foreign trade with Ukraine, USD million

Source: Embassy of the Republic of Belarus in Ukraine

Belarus mostly exported refrigerators and freezers, tractors and truck tractors, ethylene polymers, sugar, butter, tires, plastic containers, metal products, mineral fertilizers, petroleum products, combine harvesters, charred coal and bitumen, hosiery, parts and equipment for automobiles and tractors, organic solvents and thinners, synthetic fibers, commercial motor vehicles, and fish products. Ukraine basically supplied metal products, oilcake, electric energy, sunflower oil, railway cars, corn, pharmaceuticals, parts for railway vehicles, tobacco, chocolate, parts and equipment for automobiles and tractors, equipment for thermal processing of materials, beer, carbonates, accumulators, pressed wood-fiber boards, paper, cardboard, and confectionery products. In 2010, Ukraine delivered 2.94 billion kWh of electric energy (69.7% of the total exports), which was up 40.2% year on year.
Mutual investments remain low as usual. In January-June 2010, the amount of Ukraine’s investments in Belarus stood at USD 1.6 million. Experts say the inflow of investments was impeded by meddling of government institutions in management of economic entities, business activity retardation due to the lack of liquid assets, and insufficient number of country offices opened by Ukrainian banks in Belarus and vice versa.
Belarus continued its task-oriented policy aimed at development of distribution networks in Ukraine and establishment of joint ventures. The Minsk Tractor Plant, Belshina, and Keramin opened trading companies; BelAZ, Gomelsteklo, Santa-Bremor, Mogotex, Milavitsa, Conte Spa and some other Belarusian manufacturers opened subsidiary enterprises and joint ventures. The Belarusian Agrarian Company (sugar), BOC-Ukraine (oil), and subsidiary Production Association Belorusneft opened in Ukraine in 2010.
Cooperation at the level of the chambers of commerce and industry in regions of Belarus and Ukraine is also increasing. Commodity exchange is currently carried out with all regions of Ukraine, the Kyiv, Dnepropetrovsk, Donetsk, and Lvov regions and the city of Kyiv being in the lead.

Conclusion

Development of bilateral relations between Belarus and Ukraine in 2010 was determined by the change of policy approaches in both states. Kyiv was likely to pursue operationalization of benefits in bilateral relations to a greater degree and Minsk basically attempted to define acceptable terms for coexistence under conditions of misalignment or partial matching of principal interests.
The Yanukovich Administration put an emphasis on optimization of the process of finding solutions to long-standing and already traditional cooperation problems. Ukraine is thus less inclined to substitute political declarations for actual result of cooperation. Ukraine’s new approach to traditional problems does not always satisfy Minsk. Perhaps that is why the year 2010 saw no breakthroughs in resolution of the border issue, which is sensitive for Ukraine.
Leaving aside the motivation of both countries, it should be acknowledged that the alternative energy supplies way opened owing to joint efforts of the parties was a huge step forward. Successes in this field were less than few before and many attempts were often “extinguished” by Russia, which made advances to one of the countries thus pressurizing another one.
Maintaining high-level contacts and creation of system preconditions for resolutions of traditional problems in bilateral relations in 2010 should be also attributed to successes. It brought commercial and economic activities back to a high level.
Unfortunately, the year 2010 did not become a landmark of Belarusian-Ukrainian cooperation under Eastern Partnership projects since the European Union paid little attention to this initiative. As a result, most of the promising infrastructural projects did not receive an impetus to develop. The Russian Federation remained a major external factor, which indirectly affected Belarusian-Ukrainian bilateral relations.
The critical assessment made by the OSCE Mission following the December presidential election in Belarus did not instill much hope for a cloudless future of Belarusian-Ukrainian relations. Kyiv took it as a signal to be more cautious in building up political platforms with the participation of Belarus in the near term.

This article uses materials of Belarusian and Ukrainian news agencies and data available on the official websites of the Ministry of Foreign Affairs of Belarus, Ministry of Foreign Affairs of Ukraine, and diplomatic missions.