A Tale of Two Cities: Vilnius and Minsk

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Neighboring Lithuania and Belarus embark towards very different destinies

Op/ed by Chris Devonshire-Ellis

While Western media has focused on Belarus for the forced diversion of a commercial passenger jet to apprehend a wanted protester, wider-ranging geo-political divisions have also been occurring between Belarus and Lithuania. The Ryanair flight diverted to Minsk under escort from a Belarus air force fighter jet was on its way to Vilnius, the Lithuanian capital just 186 km distant from Minsk, the Belarussian capital. The two cities have a long shared history dating back centuries; both have shared tragedies and war.

Today though, despite their regional closeness, the two are following very different paths. Vilnius joined the European Union in 2004; Belarus the Commonwealth of Independent States (CIS) in 1991, following the breakup of the Soviet Union both had previously been part of. Lithuania declined to join the CIS, holding out for the possibility of entering the EU, a dream it later realized.

The main difference between the two countries has been the borders: Belarus shares a 1,239km border with Russia, Lithuania on the other hand, while it shares a border with the Russian enclave of Kaliningrad, has its larger border area with Latvia, Poland, and Belarus. Historically, Lithuania has been German, rather than Russian influenced, and was long part of an Eastern
European region governed by Teutonic Knights as opposed to Russian Tsars. These historical and geographic differences are key to understanding the different paths these two neighboring countries are taking – Belarus is firmly within Russia’s orbit as a buffer state between it and what is now part of Western Europe – politically, the European Union. With Moscow less than 1,000km away from Vilnius, the route between them is the same Nazi Germany took when invading Russia, with surrounding areas devastated in the War years and millions killed. Moscow, wary of Lithuania’s membership of NATO, keeps Belarus close.

Since the EU sanctions on Russia, Lithuania and other smaller EU countries have been vociferous about Russia as an aggressor nation, with the United States all too happy to sell arms and military support to the EU as a client. Threats can be exaggerated, Lithuanians and other border countries such as Estonia and Latvia like to feel protected. So do the Russians.

The consequence is an increasingly paranoid atmosphere within the region, whereas all Western (EU/US) values and strengths must be deployed to keep Russia at bay. This has now spilled over to include China, and the connectivity between Europe and China – some of it via Russia – that the Belt and Road Initiative has been providing.

Voices have become shrill. Regional politicians such as Lithuania’s Foreign Minister Gabrielius Landsbergis, a right-wing Christian conservative, have been vociferous concerning the threat China poses because of its infrastructure build and critical of China’s treatment of Uyghur muslims in Xinjiang. That contrasts with the Lithuanian Governments own treatment of its historic Sunni muslim community, with no Lithuanian state funding being made available for the reconstruction of the Lukiškės mosque, dating back 600 years. Financing is instead being provided by Saudi Arabia and Turkey.

Landsbergis meanwhile, Foreign Minister of Lithuania’s 2.7 million people, is regarded as a future EU star politician. To be accepted into the Brussels political elite though now requires a significant anti-China and anti-Russian stance, which Landbergis is certainly delivering – he has signed off sanctions on Chinese officials for the treatment of muslims in Xinjiang, removed Lithuania from the CEEC forum – 17 Eastern European countries plus China – and opted to establish a trade office instead in Taiwan. It remains to be seen what the outcome of this will be for Lithuania, its China export trade was worth US$358 million in 2020; while Lithuania’s exports to Taiwan raised US$38 million – nearly 90% less. The danger for countries such as Lithuania is that for some politicians, Vilnius may not be enough, and key posts in Brussels more career-attractive. But what if those decisions are to the detriment of Lithuania as a sovereign nation overall? Do Lithuanians wish to be subsumed into a ‘United States of Europe’ and wave blue flags with gold stars instead of the traditional tricolor of yellow, green, and red?

vector illustration – map of the Europe. Source: http://en.wikipedia.org/wiki/Europe

In contrast, the much-derided Alexsander Lukashenko, President of Belarus, presides over a country of 9.5 million, and is one of the heads of state governing the Eurasian Economic Union (EAEU), a free trade bloc established in 2014 that extends from China through to the borders of the EU with Poland and Belarus. The Belarus position as a Russian buffer state notwithstanding, Belarus has free trade with Russia, Armenia, Kazakhstan, and Kyrgyzstan, with Russia providing the bulk of that bilateral heft. Belarus-Russia trade increased by 18.4% in Q1.

To compare, Lithuania’s trade with the EU dropped by 6.3% during the same period, the EU has frozen a planned China Investment Agreement, Lithuania’s exports to Russia have declined by nearly 50% in the past six years while its exports to China have been growing. Yet last week Lithuania decided Taiwan is a more worthy partner. This appears an inconsistent approach to boosting Lithuania’s export trade and fiscal income. Maybe though, as mentioned, politicians such as Landbergis have larger fish to fry in Brussels and would rather be noticed there than be taking care of national foreign trade exports.

Belarus exports to China meanwhile have tripled in the past three years, and are set to do even better as and when China agrees tariff reductions with the Eurasian Economic Union – it signed an FTA in 2018. Also on board with Belarus are Serbia, Singapore, and Vietnam all of which signed off EAEU FTA last year.

Numerous other countries from around the world are currently negotiating the same, including major economies such as India, and several ASEAN nations in addition to footholds in Africa being developed.

It is a curious state of affairs, but on balance it would appear that the upcoming prospects for Belarus may be rather better than for Lithuania. Whether that is better geo-political planning, political egos proving larger than small state EU patriotism, or the significance of rising Asian wealth trickling West remains to be seen. The tale of two neighboring cities – Vilnius and Minsk – will be interesting to observe over the coming decade.

A report from Izvestia Newspaper, with additional Belarus / Lithuania trade impact statistics and commentary on this situation together with a Google English translate option may be found here.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact us at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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