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Knights Close the Ranks: New Sanctions Against Belarus

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Photo: kremlin.ru

Another package of sanctions has been introduced against the Republic of Belarus. The USA, UK and Canada simultaneously announced restrictive measures against a number of Belarusian officials, security officials and persons close to the government structures. The restrictions also affected a number of Belarusian legal entities. These countries openly say that the imposed sanctions are a response to the “migration crisis” on the Belarusian-Polish border, as they believe the Belarusian authorities engineered the crisis. The new sanctions are a signal that countries will not be able to play such games with migrants without expecting a tough response. The Belarusian leader has at least two scenarios of retaliatory steps — to “swallow” the new sanctions and keep a low profile, or to amp up the stakes again.

The new sanctions against Minsk are notable for several reasons. First, the course of toughening the introduced measures continues. If in 2020, against the background of the presidential elections and public protests, the restrictive measures were more symbolic and a means of signalling, then in the summer of 2021 it became clear that the West clearly did not want to limit itself to cosmetic measures. The course of sanctions is being developed. Second, the US and EU are aligning and harmonising their sanctions. Brussels mirrored the US measures in August 2021 in part, while Washington mirrored some of the EU summer restrictions. We observe this synchronisation of actions among the Western allies towards Belarus. Britain and Canada also maintain close coordination with their allies, although they have not repeated the decisions verbatim. Fourth, US sanctions pose the greatest threat to Minsk.

Western sanctions are nothing new for Belarus. Their history stretches back to the 2000s. The EU began to introduce them in 2004, and by 2012 there were 243 individuals and 32 organisations in the black list At the time, Washington also introduced blocking sanctions against a number of Belarusian individuals. Both the EU and the US reacted to the concentration of political power in Belarus, accusing the current authorities of manipulating the elections and suppressing the opposition. The legal mechanisms of those times are still in force, although in response to the softening of domestic policies, the EU and the United States reduced the number of persons under sanctions or introduced temporary exemptions. By 2016, only four people remained in the black lists of the EU, and the United States issued a general license toward previously blocked Belarusian enterprises.

Clouds reappeared on the horizon in 2020, and after the incident with the Ryanair flight, the pressure on Minsk increased significantly. The European Union has expanded its lists of blocked persons. By June 2021, these were 166 individuals and 15 legal entities, including such large companies as MAZ and BELAZ. Sectoral sanctions have been introduced. Among them are bans on the supply of defence products, goods for the tobacco industry, restrictions on importing a number of petroleum products and potash fertilizers, a ban on transactions with government debt securities with maturities of more than 90 days, a ban on the insurance of government agencies of the Republic of Belarus, and a ban on the European Investment Bank’s operations with Belarus. The United States initially limited itself to blocking sanctions against officials, but after the Ryanair incident, it also took tougher measures. Washington did not renew the general license for nine Belarusian enterprises that were previously on the black list. In August 2021, President Biden signed Executive Order 14038, which set up a stricter legal framework for sanctions against Belarus. Blocking sanctions were introduced against 21 organisations, including large Belarusian enterprises. The UK, Switzerland and Canada have updated their sanctions regimes.

The December round of sanctions continued the course of tough measures. The EU has expanded its list of blocked persons, including some companies that the Americans previously blocked. The United States, for its part, has also expanded its number of sanctioned individuals. In both cases, they targeted officials, security officials and other persons involved, according to the sanctions initiators, in the “migration crisis”, as well as companies and organisations connected with the Belarusian authorities. In addition, other Belarusian enterprises, not involved in the crisis but important from the point of view of exports and obtaining foreign exchange earnings, were also subject to sanctions. On top of that, the Americans imposed sectoral sanctions on the financial sector, barring American individuals from purchasing Belarusian debt securities with a maturity of more than 90 days. The UK and Canada took more modest measures, blocking a number of individuals and businesses.

Of course, the measures that were taken will not yet lead to the collapse of the Belarusian economy. A significant proportion of the country’s trade is with Russia. However, in a number of areas, sanctions are still quite painful, especially in the field of oil refining and the production of potash fertilizers. The most problematic are the US sanctions. Those included by the US Treasury in the list of blocked persons face seriously complications in their international activities. Any transactions in dollars and all economic transactions with American citizens, companies, or persons directly or indirectly associated with the United States are closed for them. The interpretation of the number of such persons is extremely wide. As a result, many foreigners face criminal or administrative responsibility in the United States. Any business with any significant international dimension fears coercive US measures and keeps its distance from blacklisted individuals. That is why US sanctions are so important in the first place.

Apparently, the “migration crisis” really was a demonstration that Minsk will not leave the summer sanctions unanswered. Belarus cannot give Washington and Brussels a proportional economic response. However, it is quite capable of causing concern in other areas, including migration. Such a fight looks like a duel between a well-armed knight and a simple infantryman. The latter has no choice but to look for improvised means, use ingenuity and non-standard steps.

If this is really so, then in part, Minsk has managed to achieve its goal. Brussels is worried about the problem. However, the crisis has only helped Warsaw. There were no large-scale border breakthroughs by migrants, and Poland proved to be an indispensable player in containing the “threat from the East”. In any case, they decided to punish Belarus resolutely. The knights closed their ranks and launched an attack.

Now the Belarusian leader faces two basic scenarios. The first is to “swallow” Western sanctions, to keep a low profile and, at least temporarily, not to carry out similar demarches. He has opted for such manoeuvres in the past, which have led to the relaxation of sanctions. The second way would entail a new round of escalation, playing on other topics that are painful for the West. But this scenario could lead to a new escalation of sanctions. The West is in a better position here. Its safety margin is higher, and the measures can be more and more serious. In addition, Brussels, Washington and other players will most likely link the lifting of sanctions to a political transition in Belarus, and not on the terms of the current government.

Strengthening ties with Russia would be a logical step for Minsk to take, given the current conditions. At least it is necessary to develop the financial infrastructure of the Union State of Belarus and Russia, which would secure bilateral transactions from the influence of third countries. Russia can mitigate damage from foreign sanctions. However, it is unlikely to fully compensate for them.

From our partner RIAC

RIAC Director of Programs, RIAC Member, Head of "Contemporary State" program at Valdai Discussion Club, RIAC member.

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Eastern Europe

China Still Ambivalent About the Middle Corridor

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Image Source: Mbkv717/Flickr

Despite the oft-touted momentum behind the Eurasian Middle Corridor circumventing Russia, China still appears not to be fully behind the project beset by geopolitical challenges and infrastructure hurdles.

Overlapping Interests

Russia’s war on Ukraine has been a game-changer for Eurasian connectivity. The route through north Eurasia running from China to Europe that served as a major conduit between the two is now less attractive as a result of the Western sanctions imposed on Moscow. China-EU shipments along the Northern Corridor have decreased by 40 percent according to data from October 2022. This new reality serves as a major incentive for finding alternative routes.

It is rare in geopolitics that so many states in such a short timeframe would agree on advancing a certain project. The Middle Corridor, connecting China and Europe via Central Asia, the Caucasus and the Black Sea, is a good example of a vision where different countries from across Eurasia have accelerated the work not only on promoting the idea, but also laying the ground for its expansion.

In the months following the invasion of Ukraine, the EU has re-invigorated its policies toward the wider Black Sea region and has actively engaged Central Asia through high-level visits, pledging economic and political support. No longer willing to trade with China through Russia, Brussels is now pushing for the expansion of the Middle Corridor.

Small nations along the Corridor, too, have upped their diplomatic game. Leaders of Azerbaijan, Georgia, and Central Asian states have grasped the emerging opportunity and begun inter-state cooperation through bilateral visits and the signing of memorandums on the minimization of tariffs and border crossing hurdles.

The effects of such cooperation are already evident. Indeed, emerging connectivity opportunities push the governments to reconsider their previous position on long-stalled projects such as the Anaklia deep sea port in the case of Georgia or the China-Kyrgyzstan-Uzbekistan railway, which the cooperating states pledged to begin work on in 2023.

Then, there is Turkey. Seeing an opening in the region, Ankara has increased its outreach to Central Asia already following Azerbaijan’s victory over Armenia in 2020. Effectively the initiator of the Middle Corridor idea back in 2000s, Turkey is now arguably one of the critical players driving the concept. A series of “block train” transports were initiated in recent years, traversing the corridor. In February 2021, a train reached China from Turkey’s eastern provinces after nearly twenty days of transit. In April 2022, another train was dispatched via the same route. Turkish President Recep Tayyip Erdogan and his Kazakh colleague Kassym-Jomart Tokayev commended during their summit in Ankara in 2022 “the growth of cargo transit via the Baku-Tbilisi-Kars railroad and the East-West Middle Corridor.” Moreover, the two sides “stressed the importance of strengthening coordination between the relevant institutions for the effective and sustainable use of the Middle Corridor.”

Yet, one critical player– China – is largely missing. Beijing has rarely commented on the Middle Corridor and Chinese analysts write exceptionally little on the issue. Most importantly, Beijing has invested very little in the actual development of the corridor.

Significant Constraints

China’s reticence so far can be explained by pure pragmatism. Of course, there is a major imperative for Beijing to find alternative routes as transit through Russia becomes problematic. In that regard, the Caspian Sea and the South Caucasus indeed constitute geographically the shortest link to Europe.

Yet, the route is not an easy one – it is multimodal, i.e. consists of both sea lines and land routes and crosses multiple countries which have made little effort to synchronize their transit capabilities and develop infrastructure before 2022.

Currently, there is close to no joint tariff coordination, effective inter-governmental dialogue and adequate infrastructure to process the throughput which has been shipped through Russia. For instance, lack of infrastructure in the Caspian Sea prevents convenient transit from Central Asian ports to Azerbaijan. Similar troubles beset the Georgian side of the Black Sea, especially as there is no deep sea port. The construction of the Anaklia port was postponed due to political infighting in the country with new construction plans only recently announced. In 2022, the Middle Corridor could only absorb 3-5 percent of the China-EU trade, which limits Beijing’s interest in the route.

Finally, geopolitical factors, such as instability in the South Caucasus, have contributed to making the Middle Corridor not as attractive for China as it might seem on the first sight. Russian influence is a primary factor. Despite Russia’s current weakness and incrementally growing dependence on China, the latter will have to carefully measure how Moscow will be responding to the development of a route which circumvents it from the south, in the region where Moscow has four military bases.

Kremlin could potentially rupture the connection both politically and through the use of more radical measures if deemed necessary. Much will depend on how Moscow fares in Ukraine. Perhaps a victory might even embolden it to prevent the corridor from materializing. But even if defeated or bogged down in a protracted war, Russia’s behavior will remain unpredictable, keeping China at unease.

From the South Caucasus, the Middle Corridor continues to either the Black Sea or Turkey. The former is currently a war theater, with chances for peaceful implementation of the corridor quite limited. This leaves China with Turkey.

Ankara and Beijing have promoted inherently competing visions of Eurasian connectivity. There were even hints that Turkish and Chinese influence clashed in Azerbaijan, which limited China’s engagement in the expansion of the Middle Corridor. After the outbreak of the war in Ukraine, the situation seems to have changed and Turkey and China have opened more active talks on cooperation along the corridor. For instance, China-Turkey Communication Forum was held in September 2022, focusing, among other things, on synergizing the Belt and Road Initiative (BRI) with the Turkey’s Middle Corridor. Yet, the pace of cooperation remains slow with little practical steps taken so far.

Looking Ahead

China might eventually grow interested in the re-invigorated Middle Corridor as a part of a hedging strategy. As was the case with silk roads in ancient and medieval times, trade corridors rarely remain static. They constantly adjust to emerging opportunities and evade potential geopolitical dangers. In the same vein, China’s massive BRI is far from stationary, but constantly evolving and adjusting to varying circumstances instead.

Although the South Caucasus and the Caspian Sea have not featured high in the BRI documents published by Beijing, the region can rise to rank higher among Chinese interests amid a new emerging geopolitical reality. This is especially the case if Russia grows even more sidelined in Eurasian geopolitics and Beijing realizes that betting on Russia long-term is a dead-end.

Author’s note: first published in chinaobservers

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Eastern Europe

A turning moment in Ukraine Crisis

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Germany’s decision to send tanks to Ukraine is a major moment in the Ukraine Crisis. It will have a far-reaching impact and may turn it into World War III. It is a tradition of the US to gang up to counter its adversaries. Iraq war, Libyan attacks, Syrian aggression, and the Occupation of Afghanistan, all were the result of allied forces, the US has the skills to make allies in addition to NATO and achieve its political objectives.

The US lobbies against its adversaries, and use all dirty tricks including media to malign its adversaries. They mislead the public and level the ground for the next stage – armed intervention. Looking at US interventions in any part of the world, you may conclude a similar approach.

Ukraine is also no exception. The US was preparing grounds for this crisis for a long and dragged Russia into it. Including Ukraine in NATO, was a red line for Russia, but, deliberately, this path was chosen to spoil global peace.

After failing all negotiations, Russia was left with no option except launch a special military operation on the same line as the 2014 Crimea operation. It was just a limited operation and should have been over after securing Russian borders only.

Unfortunately, the US had different intentions and trapped Russia in Ukraine and a full-scale war started. It was purely American war against Russia, but, as usual, America ganged up with NATO and also sought assistance and support from friendly countries.

German Chancellor Olaf Scholz announced the move on Wednesday, bowing to intensifying international pressure – led by the United States, Poland, and a bloc of other European nations, which called on Berlin to step up its military support and commit to sending their sought-after vehicles. The influx of Western tanks into the conflict has the potential to change the shape of the war. The shipments are a breakthrough in the West’s military support for Kyiv, signaling a bullish view around the world about Ukraine’s ability to reclaim occupied territory. Crucially, they may allow Ukraine to take the fighting to Moscow’s forces and re-capture more occupied land, rather than focusing primarily on beating back Russian attacks.

The US has increased its defense budget and military aid to Ukraine. It is aimed to attack Russia, not limited to liberating Ukraine only. It will prolong the war and let Russia bleed for longer.

Participation of Europe in conflict may worsen the situation and may harm Europe more. Although there are public rallies, protests, and agitations in major cities in Europe to end the Ukraine war or at least oppose Europe’s active participation. Some were chanting slogans to leave NATO. It seems the public understands the consequences but the rulers are blindly following US policies. It might create a rift between the public and rulers.

Blunders made by rulers, but, the price is being paid by the public, in the form of inflation, hikes in the price of fuel, energy, food, etc., are a common phenomenon all over Europe. The danger of spreading the war is at high risk.

Imagine, if Russia also seeks assistance from its allies and gangs up to conform to NATO aggression, it will be certainly a Word War III. Today, the World is obviously polarized and blocks are emerging rapidly.

It also can turn into nuclear war too. The 8 declared nuclear states have enough piles of nuclear weapons to destroy the whole world completely. It is scaring scenario.

But despite knowing the consequences, no one is taking any initiative to end the war and seek political solutions to the crisis. The US is not interested in the peaceful resolution of the disputes and Europe is blindly following America.

It is urged that the UN may intervene proactively and initiate a dialogue to reach an acceptable solution for all stakeholders. Unbiased, non-partisan nations may come forward to initiate peace dialogues. All peace-loving countries and individuals may act proactively and struggle to end the Ukraine crisis. Satisfying all concerned parties may achieve sustainable peace and avert any big disaster.

Humankind is the most precious thing in this universe and must be respected. Value human lives, save human lives, and without any discrimination protects human lives across the board all over the globe.

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Eastern Europe

Lithuanian society is left shaken by plans to raise retirement age

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This month Lithuanian society is left shaken after spreading the news about the increasing of the retirement age. In Lithuania, the retirement age has increased every year since 2012 and by 2026 it will be 65 years. Previously, discussion surfaced on whether raising the retirement age to 72 would help offset Lithuania’s ageing population issues.

As Lithuania’s demographic situation continues to worsen, the European Commission estimates that the number of working-age people capable of supporting pensioners will go down in the future. Brussels says that increasing the retirement age could be a solution.

The existing average in Lithuania is now 57.5 years. It should be said that Lithuania expects to reach a life expectancy of 65 years only in 2030.

In some years there will be 50 retirees per 100 working people and it will have crucial implications for public finances and may require raising taxes. At the moment, 35% of the country’s population are aged over 55.

Before prolonging its working age, Lithuania should address the relatively poor health and low life expectancy of its population. Before they even reach retirement age, many people in Lithuania are unable to work due to high prevalence of chronic, non-infectious conditions.

It’s necessary to focus on increasing healthy life expectancy in Lithuania, instead of weighing up the idea of increasing the retirement age, Irena Segalovičienė, presidential adviser has said.

Taking into account the fact that men in Lithuania live an average of 14 more years from the age of 65, and women an 18 more years, Vilnius residents are not impressed with such an idea.

The officials are afraid of possible protests which could lead even to the government resignation.

Thus, late Thursday afternoon millions of French workers were still on the streets protesting against President Emmanuel Macron’s planned pension reforms.

Lithuanian officials were quick to announce that it’s inadequate to consider a 7-year increase in the retirement age at this stage. Most likely, the news was deliberately disseminated in order to study public opinion on this issue.

Discussion is most toxic now, and will continue in Lithuania because wasting money on defence, government puts aging population at risk of poverty and death.

At the same time, the government calls for more defense spending. Together with Poland and the UK, Lithuania is leading a push within the NATO to agree to higher spending goals. In 2023, the country’s national defense budget will reach 2.52% of its gross domestic product (GDP). According to Zilvinas Tomkus, Lithuania’s vice minister of defence, Lithuania is ready to spend even more on the modernization of its armed forces and military infrastructure. The more so, spending money on defence procurement today will not improve Lithuania defence today. The modernized weapons, vehicles and equipment will be available only in some years while old Lithuanians need money right now just to survive.

Thus, chosen political priorities do not reflect the current social and economic situation in the country and even worsen it.

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