Putin and Lukashenko agree to deepen economic ties in sanctions business and economic news

Russia and Belarus agreed on Thursday to strengthen economic policy coordination, but did not agree on a common currency.

As the Kremlin began to take advantage of Alexander Lukashenko’s international isolation status, President Vladimir Putin and his Belarusian allies agreed to strengthen economic ties and obtain new loans from Moscow.

Putin told reporters after the Kremlin talks on Thursday: “We must first lay the economic foundation before we can move on to the political track.”

The two neighboring countries are linked together in a so-called alliance country and agreed to strengthen coordination on economic policies, but there is no unified currency. As the two countries gradually integrate their energy markets, Russia will continue to provide Belarus with heavily discounted natural gas supplies before the end of next year. Putin also stated that Russia will provide Belarus with another US$630 million in loans before the end of next year.

The integration negotiations that began three years ago were deadlocked by Belarus’ unwillingness to implement existing agreements on a single currency and other joint mechanisms in accordance with the terms of the Kremlin.

But as the United States and the European Union imposed sanctions on his brutal suppression of opposition protesters since the controversial presidential election in August last year, Lukashenko has sought Moscow’s increased financial support. This is Lukashenko’s sixth visit to Russia for talks with Putin. The agreement reached on Thursday will be finalized by officials before the end of the year.

The two leaders also discussed closer defense and security cooperation, but did not provide details.

Russia is strengthening its military presence in Belarus, deploying Su-30SM fighter jets to conduct joint patrols in the airspace of the Belarusian border. According to the Minsk Ministry of Defense, the anti-aircraft missile force also began a joint mission along the western border of Belarus on Thursday, which is adjacent to the North Atlantic Treaty Organization.

The leaders touted the Zapad-2021 joint war game that started on Thursday. According to RIA Novosti, the exercise will be conducted in Russia and Belarus, involving as many as 200,000 soldiers, as well as hundreds of aircraft, armored vehicles and ships.

Regional tensions

Although Belarus has so far rejected requests to establish Russian bases on its territory, the exercises were conducted at a time when tensions in the region increased. Poland declared a state of emergency last week after accusing Belarus of using asylum seekers as weapons because immigrants from Iraq and Afghanistan crossed the border. NATO allies, Latvia and Lithuania, and Belarus have reached a similar stalemate over immigration into EU countries.

Putin accepted Lukashenko and offered assistance to Russia to counter Western attempts to put pressure on the former collective farm owner who has been in power since 1994. Lukashenko received a US$1.5 billion loan and oil and gas supply agreement from Russia.

On Thursday, Putin said that by the end of 2022, Russia will continue to supply natural gas at a price of US$128.50 per thousand cubic meters, far lower than the current price of about US$650 in Europe.

“We argued for a long time,” Putin said. “Our Belarusian partners are difficult to negotiate.” He did not provide details on how to integrate with Belarus’s highly centralized and state-controlled economy.

“Not all the knots in our relationship have been untied,” Lukashenko said, adding that if “our people want it,” further political integration can be grasped.

-With the help of Henry Meyer.