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  BELARUS

REPUBLICAN REFERENCE

Area (sq.km)
207,595

Population
10,297,200

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: 254

President Alexander Lukashenka must be watching the Hague trial of Milosevic with amazement. How could the former Yugoslav president have committed such an elementary blunder as to have thought himself genuinely popular. He faced an election himself last September and duly won, taking no chances.
Lukashenka runs the last indisputable dictatorship in Europe. The legitimacy of the regime is based on instilling fear and on the KGB (still with its old name), which has 150,000 operatives, hand-picked for their ruthlessness and rewarded with high wages and many a perk.
The regime has a death squad, which has been responsible for the removal of up to 30 opposition figures. This came to light at the time of the election. Two former state prosecutors fled to the US, where after a long debriefing the State Department accredited their story. The opposition leader, Viktor Gonchar, and former interior minister, Yury Zakharenko, are amongst those who have disappeared and are presumed dead.
Lukashenka's dream is of a union with Russia. In formal terms this already exists, with a council and bureaucracy to book. But nobody in government in the Kremlin takes it very seriously. They have no desire to take on responsibility for the basket-case of a Belarusian economy.
It is the security and armed forces and others in the Duma nostalgic for the USSR who like the idea. For Belarus is the only FSU state outside Central Asia which has clung to Soviet ideas. Not for nothing was Lukashenka the one MP in 1991 to vote against independence. He is delighted to host the Commonwealth of Independent States in Minsk, its headquarters.
A series of unusual incidents indicate a few cracks in the smooth surface of the regime. In mid-January the chairman of the newly created upper house of parliament, Alexander Vaitowich, voiced a criticism of Lukashenka remarkable for its bluntness. The president, he said, was overfond of the rule by decree. Decrees drawn up by a narrow elite of experts can take the public by surprise. 
Mr Vaitovich then two weeks later had the temerity to criticise the country's foreign policy, in particular a decision to refuse a visa to Hans-Georg Wieck, a retired German diplomat who as head of an international human rights mission in Minsk has been one of the regime's tireless critics. 
A senior member of the lower house of parliament, Vasil Khrol, has blamed the president for breaking his election promise to liberalise the economy: "We have wasted four months already. If this stagnation continues, history will never forgive us." 
Guarded words. But to say things like these two in a dictatorship is a brave thing to do. On January 29th the chairman of the securities outfit, Valentin Shukhno, complained of the backwardness of the state-controlled financial exchange.
Lukashenka has taken to locking up industrialists accused of fraud. This has not improved Belarus' image abroad, as the foreign minister admitted on a recent trip to Libya, one of the regime's few friends.
The US and the EU criticised the election at the time as fraudulent, but know that severing all ties would just play into Lukashenka's hands. They keep up a dialogue, hoping that at some point he might delude himself that he is popular and relax his grip. But this is not very likely. Bleak times ahead for Belarus.

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AGRICULTURE

Turkmens to have more Belarus-made farming machinery


A contract has been drawn up between the government of Turkmenistan and the Minsk tractor plant of the Republic of Belarus on the purchase of 1,000 tractors. The documents says that 500 of them will arrive in Turkmenistan by 15th March 2002 and the rest by mid-May, Turkmen State News Service Agency has reported
The Belarus-made tractors are familiar to Turkmen farmers. Between 1999-2000 the Minsk plant supplied Turkmenistan with 3,000 tractors in accordance with an intergovernmental agreement.
As the villagers themselves admit, these tractors, produced under a special order, are now be effectively used in sowing, cultivating and harvesting cotton. In addition, the repair facilities of the Turkmenobahyzmat [Turkmen rural service] association have already set up repair services for the Belarussian machinery.

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PRIVATISATION

Belarus launches privatisation of six petrochemical companies

The Belarusian government has finally unveiled a plan for attracting investments into the petrochemical industry. Deputy Prime Minister Syarhey Sidorski said that six major petrochemical enterprises, including Naftan [oil refinery], Palimir [petrochemical company - both northern Vitsebsk Region] and Azot [fertilizer maker in western Hrodna Region], will be privatised, Belarusian Television has reported. The state will keep controlling stakes of 51% and domestic investors will have priority. The privatisation itself is to be conducted very soon: within the next two months, it was said.
Sidorski said that the government is engaged in the preparation of a set of documents on the privatisation of these enterprises. They are basically six enterprises which are the driving force of the petrochemical industry: Naftan, Palimir, Mahilyow-based Khimvalakno [synthetic fibre company], Svetlahorsk-based Khimvalakno [Homel Region] and Azot.
The approximate amount of investment into the petrochemical industry is not being revealed at the moment, however, it is obvious it will be in excess of several billion dollars.
Sidorski continued: "We are not here to count potential investments in investors' pockets. This is their problem and their capital generated in a market economy. The investment portfolio of each enterprise is estimated between US$100m and 800m.
"The main requirement is that the strategic investor must have their own financial and raw-material resources. Offshore capital is excluded from the privatisation process. Belarusian investors will have advantage.
"On the basis of the current legal framework, we are ensuring the best conditions for the privatisation of these enterprises for our Belarusian businessmen and those enterprises that will wish to work. Some businesses operating in the technological segment of these enterprises may wish to acquire some of their shares. This is a normal phenomenon of creating vertically integrated structures."
However, most of the interest in Belarusian enterprises is being expressed by Russian companies.
Sidorski said that these are large Russian companies, primarily LUKoil, Surgutneftegaz, Itera and Slavneft [joint Belarusian-Russian oil company], who are already active at the Mazyr oil refinery [Homel Region].

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STOCK MARKET

Underdeveloped stock market slowing investment in Belarus


Valyantsin Shukhno, chairman of the Council of Ministers' Committee on Securities told reporters in Minsk on 29th January that Belarus's underdeveloped securities market is slowing the inflow of both foreign and domestic investment. He pointed out that the development of Belarus's stock market could potentially encourage investors, Belapan News Agency has reported. 
According to Shukhno, companies issued shares worth a total amount of 502.4 billion Belarusian roubles last year. "This is a considerable sum, but, to our regret, the turnover on the secondary market was negligible," he said. Shukhno pointed out that stock trade growth is contained by the government-imposed moratorium on the sale of stocks acquired on concessionary terms or in exchange for privatisation checks. The government is planning to lift the moratorium in the near future to stir up activity on the secondary market," Shukhno said.
The Council of Ministers has recently rejected a draft presidential edict designed to lift the moratorium and sent it back to the Ministry of Economics. The Council of Ministers wants the ministry to add some economic regulations, including clauses concerning preferences for domestic investors in the process of privatisation, said Uladzimir Shapiraw, a departmental chief at the Committee on Securities.
Transactions in securities totalled 1.8 bn roubles in 2001, but company stock turnover amounted to just about 11bn roubles. The government issued treasury bills amounting to 665bn roubles. Other securities in circulation included promissory notes (375bn roubles) and municipal bonds (1.7bn roubles).

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