The Donbasization of Belarus. A test for Europe

Without EU action, Belarus will become a failed state on Europe’s doorstep.

What nine months of unprecedented internal repression couldn’t achieve was finally made possible by a far less bloody, but much more publicized hijacking of a Ryanair jet. The European Union (EU) has realized that the Belarus problem will not just vanish and decided to take a first decisive step toward resolving the crisis. In late June, it adopted the fourth package of personal sanctions against the regime, but more importantly, has adopted sectoral economic sanctions. And that is a real game-changer.

From fall 2020, Lukashenka — thanks to EU’s inaction and Vladimir Putin’s support — was able to maintain control of the situation in the country and stifle street protests. But to the surprise of many Western decision-makers, the situation in Belarus has not returned to normal. Quite the contrary, the Belarus situation today can be described as Donbasization. Like Russia’s effective seizure of that Ukrainian territory, it involves transformation into a full-on rogue state with no rule of law, complete international isolation, the demolition of civil society, the middle class, and the private sector. The hijacking of a passenger plane was merely the pinnacle of this process.

But Aliaksandr Lukashenka is not planning to stop. A few days after the Ryanair incident, he openly declared that Belarus will no longer stop drugs and illegal immigrants at the EU border. And so, to punish the EU, the regime decided to weaponize illegal migration. It launched a scheme of bringing people from Africa and the Middle East into Belarus and then transferred them to Lithuania’s EU border for a fee.

Domestically, the regime has launched a new attack against private businesses. There are talks among pro-regime analysts about the nationalization of Austria’s Raiffeisenbank and A1 Telecom. Belarus has withdrawn from the EU Eastern Partnership scheme, de facto recognized the so-called Donetsk and Luhansk People’s Republics (part of Ukraine), and made September 17, the date the Soviet Union invaded Poland, a national holiday. In other words, Belarus is really breaking bad.

The problem is the EU still lacks a long-term strategy regarding what to do about Lukashenka’s antics. Yet it now appears willing to act, so it is worth pointing out what can be done in the upcoming weeks and months. First of all, sanctions. By imposing sectoral sanctions, Europe has armed itself with a powerful tool to put pressure on Lukashenka. Now it needs to learn how to apply it properly.

One of the major problems with the sanctions is that they exclude Belarus’s main export product to the EU — potash fertilizers. Officially this loophole was left intentionally so that the EU could increase the pressure in the future by adding more products to the sanctions list. Unofficially it was the French delegation who insisted on removing fertilizers from the list, something requested by Yara International, a Norwegian company that is one of the largest buyers of Belarusian fertilizers.

The sanctions package is incomplete, contradictory, and unlikely to work. There is, for example, no organization within the EU to oversee their execution. The U.S. has such a structure: the Office of Foreign Assets Control (OFAC). As a result, businesses all over the world respect and fear the U.S. sanctions lists.

This absence may help to explain why the EU’s sanctions are not working. For instance, after the sanctions were imposed, Russia's largest air cargo carrier (the Dutch-registered company Volga-Dnepr) decided to follow the sanctions guidelines and avoid Belarusian airspace. However, a few days later it changed its mind and started flying through Belarusian territory once again, free of consequences.

The same goes for company sanctions. For example, MZKT (a Minsk-based manufacturer of chassis for Russian Topol-M missile systems) came under European sanctions in December 2020. Six months later it simply buys European engines and other components through various shell companies – no one in Europe monitors that.

The same goes for smuggling. Legally, Belarus will no longer be able to sell its petrochemicals to the EU market. But circumventing European and Russian laws and trade barriers is one of the main pillars of the Belarusian economy. Illegal trading has been the state business in Belarus for decades and it is no exaggeration to say that the Lukashenka regime is one of the most skillful smugglers on the continent.

We know this because many members of the Belarusian security services defected to the opposition and formed their own organization in exile (BYPOL), which has revealed the details and routes of such schemes. But Europe still cannot (or will not) do much about it. For instance, a Lithuanian X-ray machine at the railway border with Belarus broke down in 2016 and still remains out of service. During this time, thousands of carriages packed with Belarusian cigarettes worth hundreds of millions of dollars have entered the EU through this particular border crossing, with lucrative profits going directly into Lukashenka's cronies’ pockets.

New and elaborate smuggling schemes are what Belarusian state-owned companies and regime businessmen do best. All of Lukashenka’s pocket oligarchs made their fortunes from shadowy import-export operations. So, there is little doubt that Belarus will continue to supply its petrochemicals and other products to the EU. That will be made easier by the assistance of Russia and the fact that Ukraine decided not to join the EU’s sanctions.

Sectoral sanctions should not only be menacing on paper (as they are now) but also in reality. It is true that creating a European analog of OFAC will take time, but the EU could swiftly create a small skeleton organization to monitor and control the implementation of the Belarusian sanctions.

The aim of sectoral economic sanctions is to force the regime in Minsk to make concessions and release political prisoners, and if it is unwilling to do so, to make support for Lukashenka increasingly expensive for the Kremlin, without bringing it any political or economic dividends. This is the next goal of the EU and the U.S.: to set clear boundaries for the Kremlin. Lukashenka has always blackmailed the West with the threat of deeper integration with Russia, just as he blackmailed Russia with democratization and reforms. But he will never accept anything that would deprive him of absolute power as it would amount to political suicide.

But what Lukashenka could do is to make smaller concessions to the Kremlin. These range from symbolic gestures – such as recognizing Crimea as Russian and signing integration road maps without implementing them, to real ones like selling Belarusian enterprises to Russia and establishing Russian military bases in Belarus. The EU and the U.S. should make it absolutely clear that the consequences of such actions will be comparable to operating in occupied Crimea. There are tools for that: even today, seven years after the occupation, not a single Russian bank or mobile operator officially works there.

Apart from setting boundaries for the Kremlin, there is also a need to engage in a dialogue on Belarus. Especially since the Russian establishment is not unified on support for Lukashenka. At the moment, there are two groups in the Kremlin – Lukashenka’s allies and his enemies. His allies are the siloviki, who like Lukashenka’s rhetoric about eternal Slavic brotherhood and a joint fight against the corrupted West, and who pay no attention to the monetary aspects of his support. His opponents are people from the finance ministries, who are not at all interested in what Lukashenka is saying, but who see how much it costs Russia to maintain its puppet. So far, Putin is more inclined to listen to the siloviki, but the more expensive Belarus becomes, the louder the voice of the economically literate will become.

The moment the sanctions take real effect (i.e., include potash fertilizers and strict control over their implementation) the Belarusian regime will backtrack. To begin with, it will try its old game — the release of some hostages in return for concessions from the EU (we can see the signs of it already). Lukashenka has successfully pulled off this trick twice in the past. He has been in power for so long that he has outlived several generations of Eurocrats; he remembers their mistakes but they have forgotten his. The pressure on the regime must not be reduced until all political prisoners (including opposition leaders like Viktar Babaryka, Siarhei Tsikhanousky, and Maria Kalesnikava) are released, not just a small fraction of them.

Lukashenka is a natural-born politician, and he understands that his end is near. Any radical action, like constitutional reform, the release of political prisoners, or incorporation into Russia, would mean his political death.

The only option he sees is the Donbasization of Belarus. The requires the utter destruction of civil society and the middle class, and the transformation of Belarus into a criminal quasi-state under the Russian umbrella with a primitive autarkic economy and a population living below the poverty line. This is the scariest scenario. Under it, Belarus will turn into the Venezuela of Europe and remain a black hole and a source of problems long after Lukashenka is gone. But this is exactly the scenario Lukashenka is pushing for. And Europe’s dithering merely helps him.

If Europe confines itself to the current half-measures and allows its attention to wander, it will result in an increasingly severe crisis with irreversible consequences. Without EU action, Belarus will become a failed state on Europe’s doorstep, and its economy and infrastructure will be ruined for decades to come. The adoption of sectoral sanctions should not be the culmination of European efforts, but the beginning.

The EU might not realize it yet, but Belarus is going to become one of the biggest tests for European foreign policy in many years.