Belarusian President Alexander Lukashenko chairs a Safety Council assembly in Minsk, Belarus, Wednesday, Aug. 19, 2020. Authorities in Belarus on Wednesday resumed detentions of protesters who maintain taking to the streets to demand the resignation of authoritarian President Alexander Lukashenko, as opposition leaders ratchet up strain on the federal government by forming a coordination council to push for for a brand new election. (Andrei Stasevich/BelTA Pool Photograph through AP)
KLAIPEDA, Lithuania — For almost 20 years, lengthy freight trains laden with reddish-brown grit have rumbled into Lithuania’s most important port on the Baltic Sea, offering an financial lifeline for Alexander Lukashenko, the autocratic president of neighboring Belarus.
That lifeline is to be minimize Feb. 1 after a choice by the Lithuanian authorities to halt the wagons carrying Lukashenko’s largest supply of money: potash fertilizer for export to Europe and past via the port of Klaipeda.
Lukashenko’s opponents applaud the transfer, however others fear about an unintended consequence: It advantages Russia, which is predicted to take over the transport of Belarusian potash and will acquire a stranglehold over a considerable portion of the world’s provide of the obscure however indispensable commodity.
Potash, which Russia additionally produces, won't appear like a lot, however, prized as a crop nutrient important for world meals safety, it has greater than doubled in value over the previous yr, producing billions of dollars in further revenue for Lukashenko and different producers. The closing of what had been Belarus’ solely export route for the commodity via the Baltics will drive costs even increased.
The nation’s state-owned railway and the Klaipeda port earn a big chunk of their income from potash. Arguments amongst Lithuania’s political and financial elite about what to do concerning the commerce restrictions have been so heated that the federal government in December provided to resign over the problem. The ruckus erupted after the chair of Parliament’s overseas affairs committee, Zygimantas Pavilionis, accused the federal government of betraying the US, a key ally that final yr imposed sanctions on Belarus’ state-owned potash producer, and of enabling a dictator.
Pavilionis, a hawkish former Lithuanian ambassador to Washington, stated that the problem had develop into so tense as a result of “it's about very massive cash.”
In a December letter to Lithuania’s state-owned railway, the U.S. Treasury defined that U.S. sanctions on an enormous Belarusian potash producer didn't apply to overseas entities, but it surely urged what it known as a “risk-based method” to compliance, suggesting there could possibly be issues in future.
Belarusian opposition chief Svetlana Tikhanovskaya, who lives in exile in Lithuania and who has lengthy lobbied to cease the potash shipments, stated she was delighted to see the top of what she known as an “immoral” enterprise whose termination will assist empty “the dictator’s deepest pocket.”
That pocket is Belaruskali, a large state-owned potash producer that serves as a money cow for Lukashenko’s authorities. Belarus’ largest taxpayer and largest exporter, the corporate accounts for round 20% of world potash provides.
However the U.S.-led drive to bankrupt Lukashenko has stirred alarm concerning the ensuing windfall for Russia. Canada, the world’s largest potash producer, may also acquire from an anticipated surge in costs, however Russian features go far past simply value.
“Russia is applauding,” Algis Latakas, director of Klaipeda port, stated. Belaruskali, he stated, will almost definitely merely swap to utilizing Russian trains and transport the commodity to Ust-Luga, a Russian port close to St. Petersburg whose growth has lengthy been a pet challenge of President Vladimir Putin. Latakas stated he understood his authorities’s want to “combat nondemocratic forces” however cautioned that the top end result on this occasion may properly be that “Russia will get an enormous financial benefit” and the “energy to regulate meals costs.”
Whether or not sanctions work has lengthy been a subject of educational and political debate, however within the case of these imposed on Belarus, the outcomes have to this point been significantly meager.
Over the previous yr, throughout which the European Union and the U.S. imposed a number of rounds of financial restrictions on Belarus, the worth of commerce between Europe and the East European nation has almost doubled. That's largely due to sharp will increase within the value of the commodities that Lukashenko exports, primarily potash and oil merchandise, whose worth has soared thanks partly to rising, sanctions-induced uncertainty over provides.
“Lukashenko is simply making more cash,” stated Laurynas Kasciunas, chair of the Lithuanian Parliament’s nationwide safety and protection committee.
As a substitute of being persuaded to free political prisoners as had been hoped, Lukashenko has arrested solely extra individuals, with round 980 now behind bars for his or her political actions, in response to Viasna, a bunch that screens human rights in Belarus. That's greater than double the quantity reported in June when the present spherical of sanctions started after the pressured touchdown in Minsk, the Belarusian capital, of a Ryanair passenger jet carrying a younger dissident, who was promptly arrested.
Tikhanovskaya acknowledged “the paradox that sanctions have been imposed however Belarus’ revenue has elevated” and stated the squeeze on Lukashenko wanted to be tightened in order to use “insufferable strain” to shake the loyalty of officers and businesspeople Lukashenko relies on to remain in energy.
Essential for his financial survival is potash, of which Russia and Belarus collectively produce round 40% of the world’s provide.
The 2 international locations’ producers have for years competed fiercely for export markets, however, with Belaruskali now prone to develop into depending on Russian railways and ports to promote its merchandise overseas, Moscow will acquire highly effective leverage over the Belarusian firm. That will put it ready to make use of potash a lot in the identical approach it makes use of its management of giant reserves of pure fuel to skew the market and put strain on European international locations.
“Everybody throws round fairly slogans about democracy, however the end result can be precisely the other of what they need,” stated Igor Udovickij, majority proprietor of a bulk cargo terminal at Klaipeda port half owned by Belaruskali.
“Whoever controls potash controls the provision of meals around the globe,” he stated. “We're simply giving Putin a nuclear weapon, however, not like the weapons he already has, that is one which he can truly use.”
Udovickij has a transparent curiosity in holding freight trains from Belarus operating to Klaipeda. However others with no cash at stake additionally fear that Russia would be the most important beneficiary of efforts to halt the potash site visitors via Lithuania, previously a part of the Soviet Union — in opposition to its will — however now a member of the European Union and NATO.
“We have to be very cautious in imposing sanctions to not simply create alternatives for others,” stated Kasciunas. As a stalwart U.S. ally, he stated, Lithuania has an obligation to help sanctions imposed on Belarus by the U.S. Treasury, however the nation additionally has different considerations, specifically Russia.
“No one right here is pro-Lukashenko, however everybody worries most about Russia,” he stated. “There are very difficult geopolitics at play with potash.”
Russia has been pushing for years, to this point in useless, to get management of Belaruskali, the crown jewel of Lukashenko’s in any other case principally decrepit industrial base. In contrast to Belarus’ different most important income, petroleum merchandise that depend on provides of crude oil from Russia, the potash firm doesn't rely on Russia to do enterprise. Not less than not till this month.
Lukashenko, having known as for assist from the Kremlin to place down enormous road protests set off by a presidential election broadly seen as rigged in August 2020, has steadily misplaced his means to withstand Russian calls for. And Belaruskali is now trying more and more weak. In current weeks, the corporate has not solely misplaced its export route via Lithuania but additionally its largest European buyer, Yara, a partly state-owned Norwegian firm.
Yara introduced Jan. 10 that it was phasing out all purchases from Belaruskali and would cease shopping for by April 1.
Tikhanovskaya dismissed considerations that sanctions would push her nation solely nearer to Russia as an argument promoted by Lukashenko and his supporters “to attempt to cease principled motion — it's all a bluff.”
Nonetheless, Lithuania will lose a whole lot of tens of millions of dollars from halting Belarus exports via Klaipeda, and, in response to an inside authorities report assessing potential harm, it may face authorized claims of as much as $15 billion over damaged contracts. Udovickij, for one, says he plans to sue the federal government for hefty damages.
However for a small nation depending on the U.S. for safety in opposition to an more and more assertive Russia, much more is at stake than simply cash, the minister of transport, Marius Skuodis, stated. Potash, he added, “is a really troublesome geopolitical query.”
This text initially appeared in The New York Occasions.