[LINK] Belarus vs. Russia?

[rfmcdonald]

The Wall Street Journal and The Moscow Times, among other news sources, have both covered the news that the Belarusian government is starting to distance itself from its long-time partner Russia despite Belarus' desperate economic plight, with massive budget deficit and the possibility of a loan default. If anything, Lukashenko now seems to be moving towards the European Union orbit with haste.

Analysts said that despite Belarus' dire financial situation, Lukashenko was in a comfortable position because both Russia and the EU could not afford to let the country's economy collapse.

The Europeans fear a domino effect that could send shockwaves across the continent, said Tomas Valasek, a director with the Center for European Reform, a London-based think tank. In addition, a lot of Western investment in Belarus would be at risk, he said.

Belarus has seen a surge in foreign direct investment since opening up its economy in 2007, following a gas dispute with Russia that increased the amount it paid for gas by more than 170 percent.

Russia, on the other hand, is ready to go to great lengths to tolerate Lukashenko in order to maintain its influence in the so-called near abroad, said Masha Lipman, an analyst with the Carnegie Moscow Center.

"Lukashenko is still much closer to Moscow than to Europe, and the Kremlin is extremely sensitive to Western influence encroaching on Belarus," she said.

Lipman added that despite Lukashenko's recent maverick behavior, he will not cross any red lines to alienate Moscow. "After all, his well-being depends on relations with Russia."

Valasek said the main difference between the Russian and Western approach to bail out Lukashenko was that Moscow would like to control Minsk's foreign policy, while the IMF and Western donors just wanted their money back.

Thoughts, anyone?