Energy Leverage in Conditions of External Shock: The Case of Russian Energy Relations with Ukraine and Belarus, 2006-2009

Abstract

This paper looks at the interrelationship between external shocks and integration processes in the relationship between two relatively small states (Belarus and Ukraine) and their much larger neighbor (Russia). It contrasts Russia’s willingness and ability to use energy as a soft-power instrument in both states within the context of the global financial crisis. Using the Ukrainian and Belarusian cases as examples, this paper will offer some preliminary thoughts on two issues: First, how is the global crisis, especially in terms of its effects on energy markets, affecting Belarus’s and Ukraine’s relationship with Russia? Second, how are the dynamics of the Russian-Belarusian and Ukrainian-Russian political relationship being affected by this new global context?

By looking at these issues, this paper will help us gain a better understanding of the interrelationship between attempts at political integration and external economic pressures in the post-Soviet area, and of the ways in which the political constraints implicit in a certain model of integration may affect the tools available to state leaders to deal with external economic shock.

Keywords: Energy policy, Russia, Ukraine, Belarus, Economic Integration, Economic Diplomacy, Global Crises

JEL Classification: L71, N50, N70, P26, Q48