Target Lukashenka’s money supply

Alyaksandr Lukashenka

Marco Levytsky, Editorial Writer.

Acting in conjunction with the European Union, Canada on November 6 placed another 13 Belarusian officials on its sanctions list. When added to the 11 originally sanctioned on September 29, plus the 31 sanctioned on October 15, Canada’s total comes to 55. This list includes dictator Alyaksandr Lukashenka and his son Victor.

These sanctions have been enacted under the Special Economic Measures Act which impose a dealings prohibition, an effective asset freeze, on listed persons. The individuals listed in the Schedule to the Regulations are also inadmissible to Canada under the Immigration and Refugee Protection Act. How effective these measures will be remains to be seen. For one thing, we don’t know how many business dealings these individuals may have with Canada. For another, Lukashenka has never been to Canada and probably does not intend to visit anyway. So, what’s the point?

During a Munk Centre webinar on Belarus, October 16, Foreign Affairs Minister François-Philippe Champagne himself admitted that Canada’s sanctions are “largely symbolic”. And, if one is to look at what’s happening in Belarus right now, none of the sanctions are making any difference. The protests continue as do the arrests and tortures. What is really necessary is to hit Lukashenka’s revenue supply. If he runs out of money, he will not be able to pay his goon squads. And if he fails to pay them, they will desert him. He will then have no choice but to flee to Russia, like Yanukovych fled Ukraine in 2014.

During that same webinar, Franak Viacorka, a key adviser to opposition presidential candidate Svetlana Tikhanovskaya, revealed that Lukashenka controls hundreds of private companies through a mechanism known as the Management of Presidential Affairs which supplies him with money, and it is these companies that should be targeted with boycotts. When asked whether any of these could be identified, he said civic groups are working on it.

What we do know is that refined petroleum products and potash fertilizer account for the bulk of Belarusian exports and thus provide the greatest source of foreign currency reserves for Lukashenka. We also know that he only has enough foreign currency reserves to last a few months. Of course, Vladimir Putin may subsidize Lukashenka to some degree, but that too has its limitations. The Russian Federation’s economy has also been hard hit by sanctions, by the drop in world oil prices and by the Covid pandemic. What’s more, the crude oil Belarus refines into petroleum products at its two giant plants comes by pipeline from the Russian Federation. Thus, a boycott of Belarusian refined petroleum products will have the added effect of reducing the revenue that the Russian Federation receives from its crude oil production.

As for potash, Belarus is the world second largest producer with mine production of 7 million Metric Tons (MT) a year. The Belarusian Potash Company is the country’s largest industry operator. Since Russia’s Uralkali pulled out of that company in 2013, its former partner, state-owned Belaruskali, has had a rocky road to recovery. Belaruskali has six mines and four processing factories. Russia, incidentally, is the world’s number three producer.

And who is number one? We are. In 2019, Canada produced 13.3 million MT, which was an increase of 1.3 million MT over 2018 production levels. The Canadian potash industry consists of 11 mines, 10 of which are in Saskatchewan and one in New Brunswick. Western Canada’s potash deposits occur in the Prairie Evaporite Deposit — the largest known potash deposits in the world. The deposits extend from central to south-central Saskatchewan.

Therefore, any boycott of Belarusian potash exports will drive up the world price for this product. And that means more revenue for Canadian potash producers. This will benefit Saskatchewan the most and — as the latest election results aptly demonstrated – the Trudeau government certainly has some fences to mend with Saskatchewan.

Now it is very clear that, to be effective, Canada has to act in concert with its allies – in particular the European Union, which conducts much more trade with Belarus. But the strength of Canada’s foreign policy has always been its reputation as an “honest broker” and the persuasive ability that comes with it. This newspaper has tried to put questions related to such sanctions to Minster Champagne, but with little success. We participated in a teleconference with the minister on October 6, just before he left for Europe, and put ourselves in queue to ask these questions, but the teleconference was concluded before the moderator got to us. We then emailed them to his press secretary and didn’t hear anything until October 22 when, to our surprise, we were granted 15 minutes for a telephone interview the following day. Minister Champagne’s press secretary asked to see the questions in advance and we obliged. Since we had 15 minutes, we decided to add some more questions, these ones related to Ukraine and prepared in consultation with the National Office of the Ukrainian Canadian Congress. On the morning of the interview we were informed that the minister had an emergency and had to cancel. Since that time, we have sent emails and left voice messages with his press secretary asking if we could reschedule. We have had no reply. Perhaps our questions were too specific. But then, it is the duty of a free press to ask specific questions in order to prod governments into action. We have discussed this issue with two opposition MPs from Edmonton – Michael Cooper of the Conservative Party and Heather McPherson of the New Democrats and both are open to suggestions that Lukashenka’s money supply be targeted. As Cooper put it: “Given that the situation in Belarus has deteriorated, it is most appropriate to take much more restrictive measures against the Lukashenka regime and, in that regard, targeting businesses that enrich Lukashenka and his henchmen has to be part of that.”

We therefore call upon MPs from all parties that are concerned with the violation of human rights in Belarus to look into measures that would target Lukashenka’s money supply. This is a most appropriate subject for members of the Canada-Ukraine Parliamentary Friendship Group. We firmly believe that sanctions aimed at Lukashenka’s money supply is the most effective way to end the torture and violence that is happening today and bring democracy to Belarus.