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  BELARUS

REPUBLICAN REFERENCE

Area (sq.km)
207,595

Population
10,350,194

Principal ethnic groups
Belarusians 77.9%
Russians 13.2%
Poles 4%

Capital
Minsk

Currency
Rubel
(Belarusian Rouble)

President
Alexander Lukashenka

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Background:
After seven decades as a constituent republic of the USSR, Belarus attained its independence in 1991. It has retained closer political and economic ties to Russia than any of the other former Soviet republics. Belarus and Russia signed a treaty on a two-state union on 8 December 1999 envisioning greater political and economic integration but, to date, neither side has actively sought to implement the accord.

Update No: 259 - (25/07/02)

Belarus has the distinction of having the last functioning dictator in Europe, a pestilential character by the name of Alexander Lukashenka.

The KGB recidivus
The regime survives on Soviet-style nostalgia and a 150,000 force of KGB troops (the KGB still exists in Belarus). Force and fraud, the two weapons of power in a state for Machiavelli, the Italian philosopher, are to the fore in Belarus.
The force is there with the KGB. The fraud is that Belarus can rejoin with Russia, Lukashenka's pet idea. 
The Belarus Republic is in the doldrums. Apart from benighted Moldova, it has the least successful economy in the FSU. What is especially galling is that its Baltic neighbours, Lithuania and Latvia, are doing much better, despite starting from a lower base at independence.

Frittering away its lead
In 1992 Belarus had the highest living standards in the Soviet Union, providing Russia with 25% of its meat and other foodstuffs. A comparatively successful state farm system accounted for this, founded on cheap fuel from Russia and plenty of farm machinery from the rest of the Union.
One of its farm bosses at the time was Alexander Lukashenka, now president. He voted against independence in 1991, the only MP to do so. He has long been now trying to drum up a nostalgic union with Russia, the Belarus-Russia Union, that already formally exists, but has little to show for itself.
The economy stagnated under Soviet-style economics amid hyper-inflation in the 1990s. Official statistics posted growth even in double figures in some years. But most of the population knew better as shortages multiplied.

Russia to the rescue!
The economy is still being propped up by Russia. Belarus is only just behind Germany in its trade with Russia, its leading trading partner. It still obtains what amounts to subsidised fuel, while selling the Russians consumer goods and machinery to the tune of 11% of their imports, goods most of which no-one else would want to buy. Naturally, the reform-minded technocrats in charge of the Kremlin and Moscow ministries do not fancy having to carry on picking up the bills for Belarus.
It is the veteran Russian communists in the Duma and members of the Russian security forces that have a soft spot for the regime in Belarus and cultivate the fantasy of a Union with it. Little is likely to come it while Belarus continues to languish in its post-Soviet hangover, a neglected little backwater of a country.

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AGRICULTURE

Belarus revises grain forecast downwards


The grain harvest in Belarus will be below forecast, the deputy prime minister for agriculture and food, Anatol Rubanik, told Belarusian TV. Experts estimate the amount of grain to be harvested at 5.9m-6m tonnes, while the forecast in spring was 6.4m tonnes, Belapan News Agency has reported.
This year's grain harvest will be "close to last year's or even higher," Rubanik said. The deputy minister said it was important to minimize losses during the harvesting campaign.
Belarus harvested 5.2m tonnes of grain in 2001.

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FINANCIAL NEWS

Belarus posts 4.7 per cent rise in GDP


The Belarusian Ministry of Statistics and Analysis has summed up the country's economic development in the first six months, Belapan News Agency has reported.
GDP increased by 4.7 per cent compared with the same period last year (in the first six months of 2001 it rose by 3.9 per cent compared with the first half of 2000).
Manufacturing output rose by 4 per cent (by 4.6 [in the first half of 2001 in round brackets throughout]). Consumer goods production increased by 4.2 per cent (2.7), including edibles by 2.8 (4) and non-edibles by 4 per cent up (3.2), alcoholic beverages by 20.7 (down 3.9).
The volume of agricultural produce increased by 4.3 per cent (8.1). The production of milk increased by 7 per cent (13), the production of eggs fell by 8 per cent (10) and sales of meat and poultry (live weight) fell by 4 (in the first six months of 2001 - an 8 per cent rise).
Fixed-assets investment increased by 6.1 per cent (down 3.2). A total of 1,387,000 sq.m. of housing became available, or 0.8 per cent down on January-June 2001.
The freight turnover of general-use transport enterprises rose by 10.2 per cent (down 8.3), including 11.3 by rail (down 7.8). The freight turnover of road transport enterprises decreased by 4.7 per cent (by 15.5), of air service companies by 35.7 (a 190 per cent rise).
Retail turnover in January-June of 2002 increased by 15.3 per cent (by 17), and trade in services rose by 6 per cent (by 5.8).

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FOREIGN ECONOMIC RELATIONS

Belarus wants to expand cooperation with Iraq

Belarus is interested in expanding cooperation with Iraq in various fields, in particular the economy, trade, health and culture, Belarusian First Deputy Prime Minister Syarhey Sigorski said at a meeting on 15th July with Iraqi Deputy Prime Minister Abd-al-Tawwab Abdallah al-Mullah Huwaysh, who is on a working visit to Minsk, Interfax News Agency has reported.
Goods turnover between the two countries is expanding with every passing year, Sidorski said. In particular, Belarus supplies Iraq with agricultural machinery, tractors and trucks, he said. He expressed gratitude to the Iraqi authorities for supporting Belarusian producers in every way in tenders held in Iraq.
Belarus is prepared to help set up an assembly line of MTZ tractors in Iraq and consider organizing production of glassware in that country with the use of Belarusian technologies, Sidorski said. The two countries have every possibility for stepping up their trade, in particular in consumer goods.
The Iraqi official said that his country would expand relations with Belarus and "work together on implementing the planned projects."
Belarusian exports to Iraq exceeded US$26m in 2001 and were nearly US$11.5m in the first five months of 2002, a Belarusian cabinet official has told Interfax.

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TELECOMMUNICATIONS

MTS breaks into Belarus market 

Running two months behind schedule, No. 1 cellular operator MTS has launched its network in Belarus, becoming the first Russian mobile communications company to start operations abroad, Larisa Naumenko of the 'Belorusskaya Delovaya Gazeta' has reported.
"We have moved beyond being a national operator and become an international operator," said MTS president, Mikhail Smirnov, at the opening ceremony outside the company's customer centre in downtown Minsk. "Communications indeed unite the world."
MTS is only the second GSM operator in Belarus, which has a population of 10 million and a market relatively untouched by cellular communications. Rival GSM operator Velcom has an estimated 200,000 subscribers, according to consulting firm J'son & Partners.
"This is an interesting market, but it's still unsaturated and has to grow fast," Smirnov said. "We expect that this will happen thanks to new subscribers and Russian roamers."
MTS has so far installed one switchboard with a current capacity of 100,000 users which will be increased eventually to 360,000 users, and 20 base stations around Minsk. The company plans to have 70 base stations in Minsk and the surrounding region by September. 
By early next year, they aim to cover the highway and railroad connecting Smolensk in Russia to Brest in Belarus, as well as major cities Grodno, Gomel, Mogilyov and Vitebsk.
MTS aims to cover territory in which 90 per cent of the Belarussian population lives by 2005, the company said.
A winner of the open tender for Belarus' second GSM licence in September 2001, MTS has paid some US$10m into the Belarussian state budget as one of the conditions of the deal and US$5m for the licence. 
But the initial launch planned for April had to be postponed when the government temporarily denied registration for a joint venture between MTS and Belarussian long-distance operator Mezhdugorodnaya Svyaz, in which the former owns 49 percent and the latter 51 per cent.
"I want to apologize for delays with the launch of the MTS network in Belarus," said Belarussian Communications Minister Vladimir Goncharenko at the opening ceremony.
MTS plans to invest US$50m in its Belarussian venture by the end of this year, US$138m by 2005 and US$198m by 2011. MTS declined to give any estimations of the expected number of subscribers, but said the first hour and a half after the launch brought over 100 new subscribers for MTS. Analysts welcomed MTS's joint venture.
"Entering the Belarussian market is not dissimilar to rolling into a big, industrialized, densely populated and urbanised Russian macro-region," said Alexei Yakovitsky, an analyst at the United Financial Group. "Of all the CIS markets, Belarus appears to be the most lucrative and attractive in terms of synergies arising from its close cultural and economic ties with Russia."
"Unfortunately," he added, "MTS's minority state will prevent it from consolidating its Belarussian joint venture into the company's financial results."
UFG forecasts MTS will have about 100,000 subscribers in Belarus by the end of 2002 and over half a million by 2005, resulting in a long-term market share of 50 per cent.

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