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Although economic disputes between Minsk and Moscow are a regular occurrence, the latest dispute at the end of 2018 sparked discussions about whether Russia might be preparing to swallow up its smaller neighbour.

In what is being referred to as a ‘tax manoeuvre,’ Moscow is planning to change its oil tax regime. As a result, Minsk will gradually be deprived of oil revenues. So far, the preferential terms for the purchase of Russian oil have provided Belarus with a guaranteed and relatively stable source of revenue from the export of petroleum products.

Since the summer of 2018, Belarus has been requesting compensation from Russia for the loss of revenue caused by the tax manoeuvre. This is forecast to be approximately USD 10bn between 2019 and 2024. By the end of the fall, however, discussions had reached a stalemate, with Moscow adopting a much tougher position. At the beginning of December, the Russian Prime Minister, Dmitry Medvedev, publicly issued Minsk with an ultimatum. He said that support for Belarus would only be provided in exchange for advanced integration of the two countries: the creation of a single currency, customs regime, tax systems, and supreme court.

Alexander Lukashenko and Vladimir Putin met three times over the course of December last year. Two of these meetings were held on December 25 and December 29. Yet no visible progress was made. The only thing the parties managed to agree on was the creation of a Russia-Belarus working group on aspects of integration and other contentious issues.

Now, there has been a deluge of articles in the western, Russian, and Belarusian media purporting that Russia is starting the process of annexing Belarus. The most frequent reason given is Putin’s desire to improve his plummeting ratings and to circumvent the constitutional restriction preventing him from standing for re-election in 2024 by creating a new country for himself: the Union of Belarus and Russia.

Moscow has pursued a series of aggressive policies in recent years, starting with the annexation of Crimea, the conflict in Donbass, and its military intervention in the Syrian War. This creates a handy matrix for analysing any one of its actions: The Kremlin responds to domestic problems with foreign conquests and disregards the sovereignty of its neighbours. But, in the context of Belarus, this prognosis rests on a number of wrong and unfounded assumptions.

There will be no annexation

First, renunciation of sovereignty – fully or partially – is unacceptable to Alexander Lukashenko, one of the most autocratic rulers in the post-Soviet region. For over a quarter of a century, he has steadily consolidated his power at the expense of his country’s economic development and international reputation. The Kremlin has nothing to offer Lukashenko in exchange for his absolute power over the country that would persuade him to voluntarily allow the annexation of Belarus.

Unlike the state officials and military leaders in Crimea or Donbass accused of betraying Kiev after the arrival of the Russian troops there, the Belarusian nomenklatura is consolidated around Lukashenko. The sympathies of a few individual Belarusian public servants towards Russia does not mean that they are more loyal to Moscow than to their own government in Minsk. The Belarusian power hierarchy is extremely disciplined. Any suspicion of a government official being too close to Russia will always result in them losing their jobs.

The pro-Russian sympathies among the Belarusians are also not unconditional.

Russia does not have sufficient political infrastructure within Belarus to place pressure on Lukashenko or to remove him from office. Belarus has no pro-Russian opposition, no military bases, no single area with a high concentration of Russian or particularly pro-Russian populations that feel discriminated against by Minsk. So far, the discourse about Russian agents in the Belarusian security forces has comprised more of conspiracy theories than any kind of concrete evidence.

The conspiracy theorists point out that a large number of Belarusian generals and senior members of the intelligence services studied at Russian military academies in their youth. But this would hardly make it worth writing off a lengthy career in an independent government, including the privileges associated with that career, and facing the risks that unsanctioned links with the Kremlin entail. Russia’s capacity for any kind of plotting in this environment is limited by the fact that there’s constant mutual surveillance among the Belarusian law enforcement agencies.

Belarussians don't want to choose between the West and Russia

Another weak point that the alarmists like to draw attention to is the a high degree of pro-Russian sentiment in Belarus. And, to a certain extent, they’re right. According to the public opinion polls, as many as two-thirds of the Belarusian population support the Russian narrative when it comes to conflict with the West and with Ukraine. Depending on how the question is phrased, only around 15 to 20 per cent express their support for European integration. That’s not only because of two centuries of common history and cultural affinity between the Belarusian and Russian people. It’s also a result of the large-scale Russian propaganda campaign since the conflict in Ukraine.

Despite this, the percentage of Belarusians in support of Russian annexation or the creation of a closer union than currently exists has remained constant at no more than 10-15 per cent. These ‘Russophiles’ are not concentrated in any specific region of Belarus, they are (like the vast majority of Belarusian society) not politically active, and they don’t feel oppressed by the government – something Russia could have exploited in a scenario akin to the Donbass situation.

The pro-Russian sympathies among the Belarusians are also not unconditional. Opinion polls tend to feature a binary choice of ‘Russia or Europe.’ However, once sociologists add the option of neutrality or equally good relations with the East and the West, 60 per cent of respondents are automatically in favour, leaving no more than 25 per cent supporting integration with Russia. Belarusians are comfortable with the level of alliance with Russia. Very few are willing to sacrifice the advantages the relationship gives them, such as freedom of movement to and economic links with Russia.

However, the vast majority have got used to their country’s independence and would not be willing to lose it. All of this implies that nobody, including the decision-makers in Moscow, is able to predict the likelihood or extent of mass Belarusian resistance to Russia’s attempt at annexation.

As the Kremlin can’t count on support from the Belarusian ruling elites or the population, its plans to incorporate Belarus will have to include a scenario that involves the use of force. But this, in turn, would unavoidably trigger new major international sanctions. The cost of the operation itself and the volume of subsidies required for a new region five times larger than Crimea would end up extremely high. Especially if the West would then isolate Belarus with economic sanctions, as it did with Crimea.

Lukashenko will have to implement reforms

It would be wrong to believe that the Russian government is willing to go to any lengths to boost its ratings. If this were the case, Vladimir Putin would not have raised the retirement age, which was ultimately the most unpopular reform of his entire career. Moreover, the incorporation of Belarus doesn’t even guarantee an increase in popular support.

The latest polls indicate that Russians are tired of their country’s participation in international conflicts and increasingly want to see their government pursue a more peaceful foreign policy. There’s a risk that any attempt to buy their support again with a new geopolitical venture will end up being a catalyst for irritation rather than elation.

Does this mean that Lukashenko will have to settle for implementing reforms? To a certain extent, the answer is yes.

Consequently, it would be a lot easier for the Kremlin to amend the Russian constitution to allow Putin to remain in office than to orchestrate an annexation of Belarus – an operation which is fraught with real risks and costs and certainly doesn’t guarantee any benefits. It’s more likely that the ‘Medvedev ultimatum’ arose not because Russia intended to incorporate Belarus but because it wants to save money.

Nonetheless, Minsk will still try to get some kind of compensation in advance of the tax manoeuvre, dragging its heels on talks about integration in the new ‘working group’. But Moscow’s harsh rhetoric demonstrates that Minsk doesn’t have much of a chance of maintaining its oil revenue solely on the basis of references to ‘brotherhood.’

Does this mean that Lukashenko will have to settle for implementing reforms? To a certain extent, the answer is yes. We are not talking about democratisation here but rather about forced development of a market economy. Russia reducing its support strengthens the position of those government officials in Belarus who are in favour of deepening market reforms.

Over the last five years, the cuts in financial support for the public sector and the relaxing of restrictions on private business has already resulted in growing the share of people employed in the latter sector from 30 to 50 per cent. The private sector is absorbing the labour force that is gradually being laid off by inefficient state-owned enterprises. This process is set to continue. In all probability, Minsk will unfreeze the negotiations with the International Monetary Fund (IMF) on the issue of signing a new credit program. But this is unlikely to happen before the presidential elections which have to take place in 2019 or 2020.

These processes will almost certainly diminish the quality of life of Belarusians for some time. But, for an authoritarian leader with a reliable security apparatus, it’s easier to hold on to power in a country with a poor population than to give up part of its sovereignty to Russia.