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BELARUS


  

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 17,493 14,304 12,200 76
         
GNI per capita
 US $ 1,590 1,360 1,290 122
Ranking is given out of 208 nations - (data from the World Bank)

Books on Belarus



Update No: 318 - (28/06/07)

Belarus has the last undoubted dictatorship in Europe. It is an exceedingly unpleasant regime, run by a reptile, whose nastiness and stupidity are legendary.

It has become an outcast state, which is giving it some unusual bedfellows. Even Russia is distancing itself nowadays, charging it market prices for its oil and gas. Iran is stepping into the breach, as is Venezuala.

Belarus joins Burma as EU trade outcast
Belarus at midnight on 21st June became the second ever country to be kicked off the EU's 36-year old "GSP" trade scheme, but some EU states believe the move is ill-judged. The suspension of Belarus from the 1971 Generalized System of Preferences (GSP) on trade will see extra tariffs of up to 3 percentage points imposed on imports to the EU of products such as forestry and textile goods. The move comes after the Geneva-based International Labour Organisation (ILO) said Minsk had fulfilled just four of 12 necessary pro-trade union reforms, with the extra tariffs set to cost the country around 400 million Euro a year.

The Asian dictatorship of Burma in 1997 was the only other state ever to have faced GSP sanctions, despite the fact that other GSP beneficiaries - such as Uzbekistan - have worse workers' rights records than Belarus.

The GSP suspension is reversible, but it is much harder to get back into the system than to stay in: the months-long process would involve a new ILO report, a new European Commission recommendation and a new EU state decision.

Minsk in a statement said the "short-sighted step taken by the EU towards its immediate neighbour affects in the first place the interests of ordinary Belarusian citizens" and called for the EU to "reverse it immediately." Belarus has also queried Brussels' claim the decision was a purely "technical" process based on ILO compliance. "It was a political decision - the ILO said we made progress, but this was not taken into account," a diplomat said.

The position has been echoed by Belarus' EU neighbours, Latvia, Poland and Lithuania, who had fought the move at EU-level, saying the Belarusian nomenklatura's income comes from arms and energy sales - not covered by GSP.

An EU official said that close personal ties between senior ILO and EU officials have helped Brussels get the kind of ILO reports it wants, with other issues such as political prisoners also impacting the reading of ILO texts. "It's well known that if they had released all the political prisoners, things would have been different," the EU contact said.

First millionaire
Ordinary Belarusians live on US$170 a month. But Polish daily Dziennik reports the country's tax authorities saw an unnamed Belarus citizen post an income of US$9 million - the first official millionaire in the country's history.

The US state department believes that president Aleksander Lukashenka has skimmed off a personal fortune of over US$1 billion, part of which had been stashed in Serbia, but is now kept in unknown locations.

Another Polish paper, Rzeczpospolita, writes that senior Belarus official Viktor Sheiman could be posted to Venezuela in order to transfer Lukashenka's fortune to Caracas, should the Belarusian president one day seek asylum. "Our number one interest in Venezuela is in the energy sector," the Belarusian diplomat said, calling the Rzeczpospolita article "fantastic speculation."

Why Ahmadinejad visited Belarus
Becoming a pariah can have its advantages. It makes one an attractive partner for other pariahs for a start. Iranian President Mahmoud Ahmadinejad`s two-day official visit to the Belarus capital of Minsk in May received much less attention in the West than it really deserves. 

Most dispatches were based on Russian and Iranian sources, which gave scant details on Ahmadinejad`s talks with his authoritarian counterpart from Belarus, Alexander Lukashenka, First Deputy Prime Minister Vladimir Semashko and Speaker Vladimir Konoplyov. The reports claimed that the main outcome of the Iranian leader`s visit to "one of our very best friends" had been an agreement on energy resources: Belarus will be now supplied with Iranian oil. 

The Belarusian and Iranian presidents announced the deal on the first day of their summit. 

Ahmadinejad said Iran was ready to accept Belarus`s proposal for joint development of the Jufeir oil and gas deposit in Iran. 

Belarusneft - a large, state-run oil production enterprise - first made the offer to Iran in late 2006. Teheran has studied the overall plan carefully, and approved it. Under the plan, Belarus will be allowed to extract oil in Iran and use it at its own discretion. 

Belarus`s ambassador in Israel, Igor Leshchenya, told The Jerusalem Post that Ahmadinejad`s trip to Minsk was considered an attempt to break the Western boycott against Teheran. Leshchenya said the visit was "totally transparent," as all relations between Minsk and Teheran are. The sides discussed only "issues of economical cooperation," he said. 

Analysts noted that Lukashenka`s so-called "economic miracle" in his former Soviet republic had mostly been based on cheap oil and gas from Russia. On the other hand, Belarus has lost 20 percent of its budget due to Russia's charging higher prices for energy resources. Russian fuel will cost Belarus even more next year. 

As a result, Belarus has been trying to break into the international oil market. And the Iranians have come to the rescue, helping what they consider a fellow "pariah state." 

US Secretary of State Condoleezza Rice in her Congressional adoption as Secretary of State, said that Cuba, Myanmar, Belarus and Zimbabwe as "outposts of tyranny" require close US attention. "In some cases Belarus is even worse, as its weaponry is used everywhere, even in Darfur and by the Chinese and Hizbullah," Rice said. 

If everything works out as planned, Belarus and Iran could succeed in breaking the political blockade imposed by the US and its allies. Minsk provides a perfect, roundabout way to acquire anything Teheran needs. There are no strict sanctions imposed on Belarus, and so it is capable of serving as a shipment point for any goods, and a foreign mouthpiece for any political position of the Iranian regime. 

And those were the real reasons for Ahmadinejad`s visit to Minsk.

Human rights under siege
Human rights violations in Belarus have been worsening with no sign that the government will improve its record under international pressure, said a UN-appointed rights expert. "During 2006 the situation of human rights in Belarus constantly deteriorated," Adrian Severin told the U.N. Human Rights Council, citing abuses such as imprisonment of political opponents, torture, excessive use of police force and severe restrictions on the news media.

Representatives of Belarus and Russia, its big ally, dismissed the report as politically biased.

"All my efforts to engage in constructive dialogue with the government of Belarus were fruitless," Severin told U.N.'s top rights watch dog, adding that the government failed to allow him to visit the country for the third consecutive year in 2006 and has yet to respond to a new request this year. More than 150 people were reportedly put on trial without having access to a lawyer in connection with the presidential elections of March last year, in which Alexander Lukashenka won another five-year term, he told council members. 

The Romanian legislator reports to the 47-nation council, but is independent of the United Nations. Severin told reporters he had made a number of high-level visits to Belarus as a legal expert for the Organization for Security and Cooperation in Europe and for the Council of Europe before he took up his UN mandate in 2004.

Just as the government has dismissed a barrage of international criticism in recent years, it has ignored all his previous calls to put an end to abuses, said Severin. "In fact, the political system of Belarus seems to be incompatible with the concept of human rights as enshrined in the Charter of the United Nations" and in the rights treaties which Belarus has ratified, he said in a 19-page report.

The rights council should either press for democratisation of the country's government or "admit that Belarus' human rights record cannot be improved because the human rights violations are consistent with the political nature of the regime," he said.

Severin - who encouraged Belarusian civil society activists to continue their work toward democratisation - called on the U.N. to set up a legal expert group to investigate whether the country's government was responsible for the disappearance and murders of several politicians and journalists and help to put an end to impunity.

Although there were a few positive developments, such as the release of some of the political prisoners and reports that some rights groups and newspapers have recently been treated better, the improvements were not enough yet to bring real change, he said.

Support by the international community is of "paramount importance for the destiny of Belarus and its people," Severin told council-members. Russia and other neighbouring countries should join in travel sanctions for Belarusian officials imposed by the EU and the United States, he said in his report. At the same time, countries should condition trade with Belarus on human rights criteria, he said. "Russia could exercise a very important role in supporting any international strategy meant to improve the situation of human rights in the country," Severin said.

The report contained false allegations and "absurd conclusions," said Belarus ambassador Sergei Aleinik, calling Severin an "incompetent and politically engaged expert" who wanted to create a negative image of the country. "The special rapporteur is misusing the human rights mandate...to put forward a political model for interference in the internal affairs of a sovereign state," he told the council.

Oleg Malginov, who heads the human rights division of the Russian Foreign Ministry, told the council that the report was politically biased and said it demonstrated why the mandates of U.N. rights experts on specific countries should be abolished.

Mandelson's last throw
EU Trade Commissioner Peter Mandelson is not likely to survive the hand-over of power from Blair to Brown. He was once a friend of the latter, but they are now bitter enemies - ever since Mandelsom came out for Blair to lead the Labour Party. He made his last important decision in mid-June.

He said the European Union will cancel preferential trade tariffs for Belarus due to its failure to ensure the rights of workers. Mandelson made the announcement on June 15th.

The move, which went into effect on June 21st, will increase the cost of some Belarusian goods to Europe, mostly farm machinery and chemicals. It will not affect oil and gas exports from Russia that pass through Belarus to Europe.

The Geneva-based International Labour Organization had announced earlier on June 15 that Belarus had failed to make progress on giving workers the right to join unions. The European Commission said the trade preferences will be restored as soon as Belarus complies with International Labour Organization standards.

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BANKING

Iranian bank may be established in 2007


A bank, 100 per cent owned by major Iranian banks, may be set up in Belarus before the end of 2007, a spokesman for the Belarusian National Bank said, Interfax News Agency reported.
Some of Iran's major banks are expected to co-found the bank. Bank Refah Kargaran has already announced plans to set up a subsidiary in Belarus, Interfax quoted him as saying. "The Belarusian side is ready to do everything possible to help the Iranian bank open as soon as possible. Preparations of all the necessary documents will be accelerated," the spokesman said. The main objective of the new credit organisation will be to service trade operations between the two countries through direct settlements. Today payments made during such operations have to pass through Belarusian accounts in Europe.

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ENERGY

BPS-2 to redirect oil volumes from Druzhba pipeline

The Russian government on May 21st approved the construction of the Baltic Pipeline System-2 (BPS-2) bypassing Belarus and therefore reducing Russia's reliance on the transit state. The Russian leadership has pushed for the Unecha-Primorsk pipeline project since the oil dispute over oil tariffs between Moscow and Minsk at the beginning of January 2007 that led to a disruption of oil supplies to Europe from January 8th to 11th, New Europe reported. 
Russian Prime Minister, Mikhail Fradkov, has signed the corresponding resolution, the government press service said. The Russian Industry and Energy Ministry and Transneft have been directed to prepare the necessary documentation for the construction of the BPS-2. If the project is implemented, the annual throughput capacity of the Primorsk port may increase to 150 million from 75 million tonnes. The project has been estimated at US$ two billion.
Nadia Kazakova, an oil and gas analyst at MDM Bank in Moscow, told New Europe on May 24th that "there is too much dependence on Druzhba crude oil from the European refineries." The Russian government plans to redirect into the BPS-2, to Primorsk and then to the Baltic Sea a part of the oil flow from the Druzhba pipeline that runs from Russia via Belarus and Ukraine to European refineries. 
Moscow wants to reduce its reliance on overland export routes through third countries. "After the conflicts with Ukraine and Belarus that happened over the last couple of years, Russia wants to distance itself from these countries and obviously and very understandably try to invest in new pipelines," Anisa Redman, an oil and gas analyst with HSBC Bank in London, told New Europe on May 22.
"The question is the cost of the new pipelines because the pipelines that go through Russia and Ukraine are already in place, have been built and are ready to use, but the new pipelines that Russia is planning to build will require new assets so there is a trade off; you have to pay for having that extra new pipeline."
The Russian government plans to build BPS-2 has worried Belarus that counts on the transit fees that Druzhba oil supplies may be reduced to a mere trickle.
"Belarus' position is threatened because the country earns a lot of hard currency revenues from that oil and gas transit from Russia and Belarus is obviously very worried about it," Redman said. She noted, however, that Russia does not plan to replace Druzhba altogether. "You can't replace it altogether because it is not going to be large enough of a pipeline, but they can start to do it and divert some of that crude flow that goes through Belarus onto other pipelines.
Kazakova said there will be extra capacity for the new pipeline. "I view it as extra capacity rather than replacement capacity because you still have to use the current infrastructure (Druzhba) and I can't see why except for political reasons the current system won't be used," she said. 
Russia will not give up on the Druzhba pipeline, but redirect some oil crude deliveries as well as new oil supplies through BPS-2. State-run oil pipeline operator Transneft has said that the oil flow through Druzhba would be divided into two streams, one continuing westward and another heading northward to Primorsk.

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MINERALS & METALS

Mogilev Metallurgical Plant ups steel pipe output 15%

Mogilev Metallurgical Plant increased production of steel pipes by 15.2 per cent year-on-year in January-May, to 52,887 tonnes, a source in the plant's economic planning department told Interfax News Agency reported.
The plant increased commercial production by 11.6 per cent year-on-year to 95.9 billion Belarussian roubles in January-May. Production of consumer goods increased by 9.1 per cent to 1.65 billion roubles. The plant decreased production of cast iron by seven per cent, to 6,138 tonnes. Production of cast iron shot and split shot dropped 24.4 per cent to 2,375 tonnes and 40.8 per cent to 1,524 tonnes, respectively. The decline in cast iron output was due to both a drop in orders and reduction in supplies of raw material on a tolling basis, the source said. However, the drop in production of these products did not affect overall results, he said. The plant intends to increase commercial production by eight-nine per cent in 2007, with consumer goods output growing five percent and exports rising 10 per cent. 

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