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Update No: 253

The Belarus regime is almost totally isolated in international relations. In Europe and North America it is known, if at all, as a virtually fascist state, the last on European soil. Certainly, the president, Alexander Lukashanka, is a dictator, sitting atop a regime that is based on his control of 150,000 KGB troops and officers (the name KGB survives in this outpost of totalitarianism). A tall, commanding figure, he is the focus of an abject personality cult, the more derisory for his evident lack of brains or panache.
Re-elected last year on an improbable majority of over 75% of the voting electorate, he is in a strong position. The US has queried the results and spent up to US$300-400m to aid the opposition, say Russian experts (probably a gross exaggeration). There is little the outside world can do about it.
Putin has decided to befriend him, when asked why he consorts with such scoundrels as Lukashenka, Saddam Hussein, and Kim il-Jong (of North Korea), he replies: "they may be scoundrels. But they are our scoundrels."
The press is muzzled, the opposition repressed and the people are cowed. Lukashenka's one idea is to cosy up to Russia, if possible to forge a fully-fledged union.
Putin is playing along with the idea for his own reasons. It keeps the communists and nationalists in the Duma happy. Who knows he might end his career after two terms as president by becoming president of the Belarus-Russia Union.

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ENERGY

Russian company to increase oil supplies to Belarus in 2002

Russia's Surgutneftegaz [oil and gas company] is to increase its oil shipments to Belarusian refineries by 2m tonnes in 2002, Russia's Business News Agency reported, quoting Surgutneftegaz president, Vladimir Bogdanov. This year, Surgutneftegaz is expected to supply 6.5m tonnes of oil to the refinery in Navapolatsk and 1.5m tonnes to the one in Mazyr. Next year, the total figure will rise to 10m tonnes.

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FINANCIAL NEWS

Belarus budget revenues behind target

Belarus fell 300bn Belarusian roubles (US$190m), or 7-8 per cent, short of revenue targets in 2001, Finance Minister, Mikalay Korbut, said at a news conference in Minsk on 28 December, reports Belapan News Agency.
In previous years, December always yielded the most revenues, but the fourth quarter of 2001 saw no revenue increase, Korbut said. "There is no way we can set the national budget right by the end of the year," he added.
A major reason is that the real sector of the economy performed "worse than expected" in 2001, being dependent on direct subsidies and other forms of government support, the minister continued. "It is our long-standing practice," he said. "Every year, we try to somehow limit these injections. After all, the budget must fulfil its social purpose." 
Agriculture received the lion's share of support - over 650bn roubles from all sources, plus about 200bn roubles in loans, tax breaks, and other forms.
Korbut also mentioned 112bn roubles in late repayments on loans to domestic manufacturers in 2001, up from 36bn roubles in 2000. "The government allows payment holidays in certain cases, but some enterprises try to keep hold of the funds without permission," he said.
According to the minister, budget arrears reached about 140bn roubles on 1st December, but on the whole Belarusian enterprises owe more than 250bn roubles to the budget, or more than 290bn roubles including debts from companies that no longer exist.

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FOREIGN INVESTMENT

Belarus reports US$500m in foreign investment

As of 1st December 2001, about 3,500 companies with foreign investment (joint ventures and foreign-owned) were registered in Belarus. Their authorised statutory funds totalled about US$800m, US$500m dollars of which (62.5 per cent) was contributed by foreign partners, reports Belapan News Agency.
According to the ministry, the major investors, judging by the statutory funds, were the USA with 17.1 per cent, Germany with 16.2 per cent, the Netherlands with 13.4 per cent, Great Britain with 6.6 per cent, Cyprus with 6.1 per cent and Austria with 3.8 per cent.
In the first six months of 2001, 71.6 per cent of foreign capital was invested in production, 17.4 per cent in commerce and the food industry and 5 per cent in transportation. As before, investment in agriculture was below 1 per cent. The sectors of production worth mentioning include the food industry - 52 per cent, the chemical industry - 9.2 per cent, the timber-processing industry - 9 per cent, light industry - 8.9 per cent, mechanical engineering and metal processing 8.3 per cent and health care 7.6 per cent.
Over the last six months, large firms have been set up by foreign investors from Russia, Germany, Great Britain and the Czech Republic in the following industries: construction, publishing, printing, timber processing, food production and the manufacturing of electric insulators.
As of 11th December 2001, the ministry had on its register 994 offices of international organizations (including 56 NGOs and charities) from 53 countries (437 are based in Russia, 100 in the USA, 78 in Germany, 36 in Switzerland, 34 in Britain, 29 in Latvia, 25 in the Czech Republic, 23 in Poland, 23 in Lithuania, 21 in Austria and 21 in Cyprus).
The list includes such names as Robert Bosch, Xerox, Siemens, BASF, Bayer, Motorola, Wrigley, Castrol, Stimorol, Merloni, Philips, Philip Morris, Moulinex, Colgate-Palmolive, Coca-Cola, 3M, ABB, Alcatel, Volvo, Roche Diagnostics, Andreas STIHL, Tetra Pak, Lufthansa, Aeroflot, British American Tobacco, IKEA, Syngenta, Ericsson.

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INDUSTRY

Six petrochemical giants to be privatised

Six of the largest subsidiaries of the Belarusian State Petrochemical Concern (Belnaftakhim) will be transformed into joint-stock companies by 2003, Aleh Melnikaw, the head of the department for state property management at the Belarusian Ministry of Economics, said on 18th January, Belapan News Agency has reported
The six include the Khimvalakno chemical fibre enterprises in Mahilyow and Svetlahorsk, the Naftan oil refinery and the Palimir polymer plant (both located in Navapolatsk), the Azot fertilizer plant in Hrodna, and the Belshyna tyre factory in Babruysk, Mr Melnikaw said while speaking at a Minsk-based round table on privatisation and denationalisation.
According to him, talks with potential investors are already under way. "Two options are being considered: making them stock companies first and then selling the stocks to investors on certain terms, or doing it all at once, that is, the investor gets his stocks after contributing a certain amount of money or property into their registered capital," Mr Melnikaw said.
The Belnaftakhim management favours the second option, but it is yet to be approved by the Ministry of Economics and the Council of Ministers, the official continued. He said it was too early to estimate the amount of investment.
Other ministries have drawn up their lists of enterprises to be turned into joint-stock companies in 2002 and submitted them to the cabinet for approval. There are a total of 137 enterprises on the lists, including the six Belnaftakhim subsidiaries, as well as Horizont, a TV-making factory in Minsk, Mr Melnikaw said.

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