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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: 256 - (23/04/02)

The Belarus regime is the last indisputable dictatorship in Europe, unless Azerbaijan be accounted European by reason of it being in the Caucasus. Its ruler, Alexander Lukashenka, is an incorrigible Sovietophile, the only MP to vote against independence in 1991.

How come Lukashenka?
It might be asked how such a maverick could become president. But he has important supporters, the 150,000 security forces and local bigwigs who count the votes in elections. Re-elected last year on 75% of the vote, he might just have won without vote-rigging. For the country population has a lot of sympathy for him; he was a collective farm boss. The Russian population like his Russophilia and he is popular with women, it is said, on account of his sex appeal.
He is detested by the intellectuals and most of the townsfolk. It is a pattern of support such as Vladimir Meciar enjoyed in Slovakia and Slobodan Milosevic in Yugoslavia, less the appeal to women voters, perhaps explaining why they are out and he's still there. Actually unlike them, Lukashenka is unlikely to risk anything like fair elections. He intends to stay for the long duration.

Rogue regime rampant
Rivals in opposition 'disappear,' the press is muzzled and free assembly and free speech do not exist. The regime is about not changing. The economy is in poor shape; inflation on 48% is the worst in the CIS and growth is sluggish.
While Belarus is a pariah in the West, it has its foreign friends. Lukashenka likes Saddam Hussein, whom he is rumoured to sell arms to, and Gaddafi of Libya. The Chinese are good friends and see Belarus as a sort of Hong Kong in reverse, from which they can penetrate the great Russian market.
Certain Western firms, such as Ford, have made the leap into Belarus. But mostly it is avoided as too risky. It is an unsavoury hangover from communism; and its one plus is that it is a constant reminder to everybody else why the system had to go.

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AVIATION

Belarusian jets grounded by EU's new noise standards


In connection with the launch of new noise standards on 1st April, the Belarusian Belavia national airline has to halt air services to several European capitals, Belapan News Agency has reported.
As Belavia director-general, Anatol Husaraw, told a news conference in Minsk on 9th April, the company has had, for example, to cancel flights to Paris from 1st May. There will be no direct air services between Minsk and the French capital. Apart from that, air services to Vienna, Berlin and Stockholm have been temporary postponed. Some of them are planned to be resumed in early May and will be carried out on An?24 and Yak-40 planes.
Belavia will run services to other European destinations with the four Tu-154M that the company owns. The director-general believes that as a result, the company could still preserve the volume of its services at a level not lower than last year's.
The planes that cannot fly to EU countries are going to be used in other markets and destinations. For example, in mid-May, services to Russia's St Petersburg should be resumed, and a bit later - to Tbilisi, and at the beginning of May a service to the Kazak capital, Astana, is due to be launched. "We are changing the configuration of our presence on the international air service market, but we are not leaving it in any way. However, the situation is actually very tough for us," the Belavia head said.
The Chairman of State Committee for Aviation, Fyodar Ivanow, told a news conference in Minsk that Belarus could buy several Boeing jets by the end of this year, the news agency said.

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ENERGY

Surgutneftegaz and Slavneft CEOs discuss investment in Belarus 

According to Troika Dialog, Belarus President Alexander Lukashenko met with Surgutneftegaz CEO, Vladimir Bogdanov, and Slavneft CEO, Mikhail Gutseriev. The two Russian oil companies are considering a joint bid for a number of oil refining and petrochemical assets scheduled to be offered in an investment tender later this spring.
Gutseriev told journalists after the meeting that the Russian oil majors may invest up to US$1bn in the Belarus economy over the course of the next several years. The Belarus government owns 11% of Slavneft, so a joint bid makes some sense from the point of view of Surgutneftegaz, a relative outsider in the region. However, while Bodganov may see Slavneft as a valuable partner, there are serious questions at the moment about Gutseriev's future. Slavneft will hold an emergency shareholder meeting on May 13th, at which, according to media reports, there is a good chance that Gutseriev will be replaced by and as yet unnamed candidate. A further danger to Surgutneftegaz in this situation is that TNK owns a stake of around 10% in Slavneft; thus far, TNK has been a passive investor in Slavneft, but TNK is generally not known for its passivity. 
Surgutneftegaz CEO, Vladimir Bogdanov, discussed privatization of the country's petrochemical enterprises with President Lukhashenko. Surgutneftegaz is keen to buy some of them: Polimir, AZOT and especially Naftan, whose main asset is a refinery in Novopolotsk. 
Naftan will be incorporated by May 1st, after which up to 40% of its shares will be sold at auction. The Belarus government will remain the controlling shareholder. Belarus is asking US$800m for the Naftan stake. Bogdanov will try to convince Lukhashenko that this is excessive and that the Naftan sale should be priced in line with the Mazeikiu Nafta and Burgas Refinery deals: YUKOS is going to buy 26.8% of Lithuanian Mazeikiu Nafta for only US$75m, while LUKoil acquired 58% of Burgas Refinery in Bulgaria for US$101m in 1999. The difference in pricing is the more striking as both Mazeikiu and Burgas have greater capacity than Naftan. LUKoil, YUKOS and several international companies may also bid for Naftan.

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FOREIGN ECONOMIC RELATIONS

Belarus, Russia set to enter new conditions of trade

In a telephone conversation the Belarusian President Alyaksandr Lukashenka and Russian President Vladimir Putin agreed to conduct a session of the High State Council of the Union of Belarus and Russia on 12th April, Belorusskaya Delovaya Gazeta, has reported. It is expected that on the same day, the two countries' prime ministers will sign a package of documents cancelling individual privileges for Belarusian companies in exchange for a decrease in [Russian] gas and railway costs. 
As part of a Russian-Belarusian work group on the unification of economic conditions, Belarusian Deputy Foreign Minister, Alyaksandr Mikhnevich, took an active part in the creation of the four intergovernmental agreements, a decree and an edict by the Belarusian president on the cancellation of individual privileges. In an interview to Belorusskaya Gazeta, he described the contents of the documents and the reasons for the delay in signing them.
Mikhnevich, answering a question on why there had been such a delay replied: "Over the past two years, much progress has been achieved in improving understanding of the ongoing process. There was only one thing left unsettled in the four agreements - the principle of VAT payment. The position of the Russian side is that without a [tight customs] border it will be very difficult for us to calculate the flow of commodities and real budget receipts. That is to say, so-called "black" export is possible.
"We offer three ways to solve the problem and thus display flexibility. Russia should understand that this issue is extremely important to us. As soon as an understanding has been reached we will sign the whole package of documents. Today the two countries' ministries of finance are working actively on solving this problem."

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FOREIGN LOANS & AID

Belarusian president endorses US$16m Kuwaiti loan to upgrade factory

Belarusian President Alyaksandr Lukashenka has issued an edict "On the signing of a credit agreement between the Republic of Belarus and the Kuwaiti fund for Arab economic development," Belapan News Agency has reported.
The presidential press service reported that the agreement provides for a long-term preferential loan worth 5.1m Kuwaiti dinars (about US$16.5m) to Belarus to fund a project to upgrade a polyethene textile factory, which belongs to the state-owned Svetlahorsk production group Khimvalakno, which is slated for privatisation. The pay-back period is 20 years and the preferential payout period (when only interest in paid) is four years.

UN official unveils new Chernobyl aid strategy for Belarus

A new approach to Chernobyl disaster relief will be implemented along three main lines: the socioeconomic development of the affected districts, the development of health care and [solving] psychological problems, the UN under secretary-general for humanitarian affairs, Kenzo Oshima, said after visiting several contaminated population centres in Homel Region [south Belarus], Belarusian Radio has reported.
Kenzo Oshima was familiarized with progress in rehabilitation work. In fact, an experiment as yet unseen either in Russia or Ukraine has been launched here: through the IAEA's aid, house exteriors are being cleaned and contaminated soil is being replaced with cleaner one. It is expected that this will allow a substantial reduction in the level of contamination and its influence on the health of residents.
At the same time it is obvious that this will not solve all the problems because employment for residents of post-Chernobyl regions remains the main problem. In connection with this a new UN humanitarian strategy acquires special urgency. It boils down to this: foreign produce should not be brought into this zone. Assistance should be given to create conditions here for this produce to be made locally, and it should be free from radionuclides. In turn, this will also help the sustainable development of the affected areas.
However, the UN Under Secretary-General Kenzo Oshima neither fixed dates for a start to the implementation of the new strategy nor possible sums of financial investment. He said: "We are shifting our approach from the one that was based on emergency humanitarian relief to an approach which is based on the results of the UN mission and on the strategy for sustainable economic development which we published in February.
"It is aimed at implementing projects in three areas: socioeconomic, health care issues and environmental aspects. We want to call it a new strategy and the emphasis will be placed on peoples' vital activities and on the improvement of their self-employment and economic well-being."
The Radio correspondent asked: "What are the chances that the provision of this aid will start and when can this happen?"
Oshima replied: "For this strategy to work we need a consensus and agreement from national governments, local bodies of power and naturally the international community, including the UN. I believe that we will manage to do this, but this will take some time, indeed. So we need patience, we need persistence and we need confidence to put this into practice.
"I cannot be specific. I cannot be sure of the extent of help the international community will provide to support our strategies. But I hope very much that we will manage to achieve the best success possible."

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