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Lukashenko's "Potash Rubicon" — Europe throws in the lot

Judging by the schedule of events on the website of the Council of the European Union

Judging by the schedule of events on the website of the Council of the European Union, consideration of new sanctions against the Lukashenko regime is expected on February 22.

The decisions that will be taken will be a kind of test for the EU — because it is in this new sanctions package that the Belarusian potash industry, one of the key export industries for the Lukashenko regime, may be removed from sanctions.

This means a huge financial flow from the sale of potash could reopen for him. This flow is vital for the Lukashenko regime to retain power in Belarus and, therefore, to continue its complicity in the war against Ukraine on Russia’s side.

Would the EU be willing to give Lukashenko such a gift — realizing that by doing so, Europe would fail its own test of its own values?

To begin with, any dictatorship is an extremely inefficient system from an economic point of view. The main "sources of power" that help such systems to survive are, first, natural resources, which enable dictators to feed their mafia clans, and, second, external assistance from the same dictatorial regimes-allies.

When oil prices went down, the seemingly indestructible Soviet Union faltered. And as soon as the aid from there stopped flowing generously to the countries of the socialist bloc, they also quickly got rid of the local dictatorial regimes. And the people who had been its main beneficiaries — officials and business leaders — began to actively get rid of the inefficient system. The countries of the former socialist camp are not the only historical example.

Lukashenko’s regime is no exception to this scheme. Thus, from outside, Russia has been feeding him for almost 30 years, helping the dictator to hold on to power by all means. After all, it is his regime that guarantees for Russia the retention of Belarus in its sphere of influence, keeping it inside the "Russian world". Which by 2022 has actually turned Belarus into a Russian colony and a military springboard for an attack on Ukraine.

Lukashenko’s own resources of raw materials, which all these years gave him the resources to stay in power, were oil products and potash, industries that were completely controlled by his cartel, the products of which formed the basis of his exports and personal enrichment.

Now it is the moment when, due to the sanctions already imposed, these factors cease to work. Russia, the main donor to the Lukashenko regime, is itself under sanctions and is waging a grueling war on its economy. It has less and less free funds to feed its tame dictator.

Traditional resources of raw materials, which created the material basis for Lukashenko’s mafia system, are also under sanctions. And no matter what Lukashenko and his cronies say, these sanctions really work. Even despite all the attempts to circumvent them.

Калийные удобрения
Source: беларусь.инфо.сайт

Take the key area of potassium production and processing for the Lukashenko regime. Under sanctions, potassium production fell by 60% and exports by 50%. Belarusian potash practically left the U.S. market (previously it was in third place after Canada and Russia), as well as the European Union.

Deliveries to the largest consumers of Belarusian potassium in the world — India and Brazil — decreased significantly. It also does not seem possible to increase supplies to China — purely because of the physical limits of the load on the transportation system.

The railroad can transport a limited volume of products — and this is taking into account the fact that there are other commodity items that are also transported this way. A similar situation concerns Russian ports, which have limited possibilities for loading, and Russian, but not Belarusian, suppliers have priority there.

Because of the sanctions, all the investment projects of the regime, which made it possible to increase the physical volume of potassium production, were also curtailed.

As for the construction of the Nezhinskoe ore mining and processing plant (directly connected with Mikhail Gutseriyev, a Russian oligarch, friend and one of Lukashenko’s "wallets"), a credit line from China was suspended because of the threat of secondary sanctions.

No matter how much the dictator brags about his friendship with China, the latter still pursues its pragmatic interests and is not going to strain its relations with the West for Lukashenko’s sake.

Therefore, the removal of sanctions in the potash sector is one of the key areas for lobbyists of Lukashenko’s regime today. Their key argument is that the withdrawal of Belaruskali and other companies extracting and processing potash from Belarus from the market allegedly negatively affects the global food market.

The Kremlin, which has less and less money to support Lukashenko, echoes them. Maria Zakharova, an official representative of the Russian Foreign Ministry, openly spoke about the need to lift sanctions on fertilizers, which, according to Zakharova, "undermine food security in the world".

However, is it really so? Of course not.

Transit of potash from Belarus in the port of Klaipeda

The average global food price index has fallen for the tenth month in a row, and global prices for one of the key grains, wheat, have also fallen for the third month in a row.

Fertilizer prices themselves are not rising either. And wholesale prices are not an indicator here, but only quotations that haven’t been updated for a long time. In fact, if we look at retail prices for agricultural producers who are cleared of speculators — we see that the average retail price of potash has been falling since late October 2021.

Russian potash, which competes in the market with Belarusian potash, although it is not under sanctions, but its sale to the EU is limited by quotas. This does not allow Russia to increase its own output or to re-export Belarusian potash, i.e. to help Lukashenko circumvent the sanctions.

The sanctions in the potash sector do not affect ordinary people in Belarus either, as the regime propaganda is trying to present.

Apart from the IT and financial spheres, the mining industry is among the most profitable branches of the Belarusian economy. As far as one can judge even from open sources, in December 2022, i.e. already in conditions of sanctions, miners of Belaruskali earned on average more than IT people.

The reason for this, of course, lies not in the success of the potash industry — but in the fear of the regime, which is trying hard to prevent a social explosion. Miners banging their helmets in the center of Soligorsk, not to mention Minsk, are Lukashenko’s nightmare.

Thus, the lobbyists' narratives about the growing problems of food in the world and the harm of sanctions to ordinary people are crushed by concrete facts. And what remains?

What remains is the truth that sanctions create conditions for destruction of the mafia system built by Lukashenko, they reduce opportunities for corruption proceeds, gray schemes and murky financial flows, on which the dictator and his entourage sit. And at the expense of which they finance their complicity in the war against Ukraine.

But now more than ever, this system is at risk of collapse. Precisely because the sanctions, despite all the efforts of Lukashenko’s lobbyists, have not yet been lifted. Both Lukashenko and his entourage, as well as Russia, are well aware that if the sanctions cannot be lifted, and the new sanctions against Lukashenko’s regime are harmonized with the sanctions against Russia, but without exemptions for potash — the Lukashenko system may not survive.

But this is not the only point. Sanctions against the Lukashenko regime are de facto sanctions against Russia, as the Kremlin is forced to spend more and more money to maintain and preserve its puppet in power in Belarus. After all, Belarus under Lukashenko is a tool for Russia to organize political and military provocations, for direct military aggression. It is a hub for the production of weapons, a training ground for soldiers, and a springboard for war with Ukraine.

Lifting sanctions on Belarusian potash would free up enormous resources for Russia, which today it has to spend on the Lukashenko regime. This means financially helping both aggressors.

In addition — and this is also very important — the Kremlin needs Belarus as an offshore to circumvent sanctions, which arose precisely because so far the sanctions against Russia and Belarus have not been harmonized. And Russia is also very afraid of that.

This means that by lifting sanctions on the dictator, the West will in no way separate or alienate Lukashenko from Russia, but on the contrary will finance this tandem and make it easier for him to wage war.

Having received resources from the sale of the same potassium, Lukashenko will be able to put the industry of the republic on a military footing even more effectively, to organize the production of aircraft for the Russian army, as he himself openly admitted at the last meeting with Putin, the production of missile systems and drones together with Iran, etc.

Simply put, for dollars and euros received from European and American farmers in payment for fertilizers, Lukashenko will be able to create machines to kill Ukrainian civilians.

And if everything is very clear with Lukashenko's and Putin's interests in the removal of sanctions, then other questions remain unanswered:

  • Who and why is interested in preserving the Lukashenko regime and financing the war with potash money in the West?

  • Who is so actively defending the interests of the two military aggressors, hiding behind false theses about food security and the interests of "ordinary people"?

  • Who are these lobbyists seeking to get their patrons out of harm's way - and why are they being listened to?

While right now, on the contrary, it is necessary to maximize the pressure on the aggressors - to harmonize sanctions against the Lukashenko regime and Russia, to cover up smuggling schemes and not to allow the removal of sanctions on key industries for the operation of their resource cartels.

After all, that is the goal of truly effective sanctions. And sanctions on Belarusian potash are very effective in this sense. But it seems that someone in the West does not like their effectiveness very much... On February 22, 2023, we will see how strong and influential this lobby - the lobby of dictators and military aggressors - is and how it is able to influence the sanction policy of the European Union.

Right now, standing at Lukashenko's "potash Rubicon," Europe is casting lots. And puts its reputation on the line.


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