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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: 262 - (22/10/02)

The situation in Belarus is dire. The government is the most retrograde in the former Soviet Union in its manner of rule, excepting possible a Central Asian dictatorship or tow. But even in Central Asia economic reform is on the agenda. Not so in Belarus.

The Old Believer
The president of Belarus, Alexander Lukashenka, is a remarkable man in his own way. He is strongly reminiscent of the Old Believers, those Russian Orthodox faithful to the old rites as Peter the Great and other modernisers reformed Russia in the seventeenth and eighteenth centuries.
The comparison is apt for more than one reason. Lukashenka's faith is of course communism or rather what one might call Sovietism. The only MP to oppose independence in 1991, he ardently desires the return of the USSR. Failing that he yearns for reunion with Russia, but on equal terms, a quixotic project if ever there was one.
Putin sees himself as a new Peter the Great, a son of St. Petersburg as he is. He can see the point to the nostalgia of Lukashenka and his like, not being an adept of the KGB for thirty years for nothing. But he does not think it is a useful pointer to current policy. His one known witticism is to this effect: "he who does not regret the passing of the Soviet Union does not have a heart; he who thinks it can be restored has no head."
This probably sums up his attitude towards the Old Believer of Belarus.

Stalled union?
The Union of Belarus and Russia is a splendid political idea so long as one does not take it too seriously. It is the sort of thing to dangle before the populus as an eventual goal. President Bush senior used to complain that people were always going about his lack of "the vision thing." 
Well Lukashenka has plenty of vision, but unfortunately little else.
Putin decided to call his bluff in August, offering a union in which Belarus becomes another 'autonomous republic' of the Russian Federation. Lukashenka would remain president, but subordinate to the Kremlin.
Lukashenka went into a huff. Very much on his dignity, he said that the proposal was an 'insult' to Belarus and its sovereignty. Suddenly, he re-invented himself as a Belarussian patriot.
Putin would of course have had no illusion about the probable reaction from Minsk. He knows he is dealing with a scoundrel in Lukashenka, but, as he would say, "he is one of our scoundrels."

The Minsk card
In fact there are moves afoot to see the Belarus currency, the rubel, joined to the Russian rouble by 2005, some even wanting it by next year. It seems unlikely that the technocrats in Moscow will approve. Why should they want to take the responsibility for the basket-case of a Belarus economy, which Russia already subsidises with cheap oil and gas in exchange for accepting all sorts of shoddy goods in return that nobody else would want? Belarus as a consequence accounts for 11% of Russia's foreign trade, second only to Germany.
There are those in the Kremlin who do not want to dispense with the Belarus card, as one may call it. If Moscow is footing the bills, why should it not call the shots and have Minsk as a loyal ancillary within its zone of influence? As the Baltic states enter the EU as well as NATO, it makes sense to many a Kremlin planner to have Belarus very much on side.
But Putin is not comparing himself with Peter the Great for nothing. He has much larger issues at stake than anything concerning Belarus, notably a new arrangement with the West. Belarus is an eminently disposable entity of his balance-sheet. Only as a very last resort would he want to bunker down with the Old Believer of Belarus.

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AGRICULTURE

Belarus hopes to sell tractors to Kazakstan, Kyrgyzstan

Belarusian Prime Minister Henadz Navitski arrived in Kazakstan's capital Astana for participation in a regular session of the Integration Committee of the Eurasian Economic Community [EAEC], Belarusian TV has reported. Henadz Navitski had meetings with the heads of government of Kazakstan and Kyrgyzstan. 
The TV Correspondent reporting from Astana said: "The prime ministers of Belarus and Kazakstan, Henadz Navitski and Imangali Tasmagambetov, discussed plans to set up assembly lines of the Minsk Tractor Works in Kazakstan. The demand for Belarusian tractors in that country is about 10,000 units. Setting up its own production in Kazakstan will make it possible to avoid a paradox: it is cheaper to buy Belarusian tractors in Russia than in our country. Thus, the prime ministers touched upon one of the main issues which were to be discussed at the session of the EAEC heads of government - the problem of single rates within the whole economic area."
Later Henadz Navitski had a meeting with the Kyrgyz prime minister. It was mostly of a familiarization nature. Nikolay Tanayev assumed his functions as Kyrgyz head of government just several days ago.
That country is also interested in setting up Belarusian tractors' assembly lines. The meeting between the Belarusian and Kyrgyz prime ministers was held on the eve of Belarusian President Alyaksandr Lukashenka's visit to Bishkek. During the meeting, the economic problems that are to be considered by the Belarusian and Kyrgyz leaders in October were discussed.

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FINANCIAL NEWS

World Bank projects stalled in Belarus


"Since the adoption of the World Bank's strategy of assistance to Belarus for 2002-2004 (on 14th March 2002) the sides have made taken a single step towards carrying it out," Serhiy Kulyk, head of the bank's office in Belarus, told Belapan News Agency on 18th September.
He pointed out that the World Bank (WB) and the UN wanted to help Belarus to fight tuberculosis and HIV/AIDS: the WB intended to give a loan for an anti TB/HIV/AIDS project under its strategy, while the UN wanted Belarus to become involved in donor programmes of the Global Fund to Fight AIDS, Tuberculosis and Malaria. The Belarusian government still hesitates about the World Bank-assisted anti-TB/HIV/AIDS project. 27th September was the last day for filing applications for grants from the Global Fund to Fight AIDS, Tuberculosis and Malaria. 
"Belarus may miss the deadline. The government, which repeatedly declared its interest in the HIV/AIDS project, has no more than a week left," Mr Kulyk said. He expressed regret that the government has not yet presented to its considerations on the WB's Chernobyl report, which was prepared in May. The Bank's Country Assistance Strategy (CAS) estimates the Chernobyl project at US$40m. It preparation could have begun in September, Mr Kulyk said.
The WB leadership planned to meet with a Belarusian delegation on 27th September, during an annual meeting of the World Bank and the International Monetary Fund (IMF) in Washington. The discussion may result in a shift of focus in determining the priority projects, Mr Kulyk said.

Belarusian president offers tax benefits to private businesses

Belarusian President Alexander Lukashenka has signed decree No 493 "On certain measures to provide state support to legal entities and individual entrepreneurs." The decree sets forth the form in which state support will be extended to individual entrepreneurs, Belapan News Agency reports. The official commentary states that all assistance will be provided on a payback basis. 
State support may take the following forms: deferred payment and rescheduling of taxes, levies and customs duties, provision of tax credits and introduction of revenue distribution procedures. To facilitate the execution of the decree, the following regulations were adopted: regulations on the procedures for the provision of deferred payment and rescheduling of taxes, levies and customs duties; regulations on the procedure for tax credit extension; and regulations on the procedure for the introduction of revenue distribution schemes. 
The official commentary points out that the decree "sets forth the cases eligible for state assistance and the mechanisms for its provision." The president will decide whether an economic entity qualifies for state help.

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TRANSPORT

Iraqi deputy PM seeks Belarus cooperation on rail building


Iraq is interested in working with Belarus in the railway industry, head of an Iraqi delegation and Deputy Prime Minister, Abd-al-Tawwab Abdallah al-Mullah Huwaysh, said at a meeting with the management of the Belarusian Railway Company in Minsk on 30th September, Interfax News Agency has reported.
The Iraqi official said that his country is interested in working on joint projects with the Belarusian Railway Company.
Cooperation with Belarus is currently complicated because of the UN sanctions against Iraq; nevertheless, the country "needs to expand its economic ties," Huwaysh said.
Iraq's interest in the Belarusian Railway Company is dictated by the government's plans to build a number of new rail lines, in particular, a direct route between Iraq and Syria, he said.
Iraq views Belarus' role in these projects as technically equipping Iraqi railways with control units and other necessary devices.
Furthermore, Huwaysh said that Iraq intends to invite Belarus to work together in passenger and freight rail transportation...

Belarus holds talks with Iran on joining North-South transport corridor

Visiting Iranian Minister of Commerce, Mohammad Shari'atmadari, had a meeting with the leadership of the Belarusian Ministry of Transport and Communications. The meeting's main goal was the discussion of possibilities for Belarus to join the agreement on the North-South international transport corridor, Nationwide TV has reported. 
The North-South transport corridor unites roads from India to Finland. Currently three countries - Russia, India and Iran - have signed the agreement on its use. These states' official consent is necessary for Belarus to accede to this agreement. The inclusion of Belarus into the transport corridor could significantly increase the cargo flow through the country's territory and could, consequently, lead to an increase in customs revenues.
The Belarusian Minister of Transport and Communications, Mikhail Baravy, said: "I would say these talks are very important for us because now the Republic of Belarus wishes to join the North-South transport corridor. We have been holding negotiations for the last two years. We have the consent of the member states: Russia, India and Iran. Iran is the depositary state, i.e. accession to the transport corridor depends on that country's consent."

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