In-depth Business Intelligence

Key Economic Data 
  2002 2001 2000 Ranking(2002)
Millions of US $ 14,304 12,200 12,700 76
GNI per capita
 US $ 1,360 1,290 1,380 124
Ranking is given out of 208 nations - (data from the World Bank)

Books on Belarus


Area (


Principal ethnic groups
Belarusians 77.9%
Russians 13.2%
Poles 4%


(Belarusian Rouble)

Alexander Lukashenka


Update No: 287 - (29/11/04)

Falling out with Putin
There are increasing signs of tension between Minsk and Moscow. It comes at a most delicate time in Belarus-Russian relations.
Minsk is the capital of the Commonwealth of Independent States (CIS). In September 2003 the CIS had a meeting in Yalta, where a most important new departure was made. Putin persuaded the presidents of three key FSU states, Belarus, Ukraine and Kazakstan, to enter into a far-reaching economic treaty, envisaging a 'common economic space.' 
Belarus was given a target date of January 2005 to introduce the Russian rouble as its currency. This was part of a Putin-sponsored plan to reincorporate the country into a new union with Russia, ruled from the Kremlin. Belarus would be the favoured route of its gas exports to Western Europe.
The union already exists in embryo as the Russo-Belarusian Union. 

Union now off?
But the whole thing might now be off just before its crucial coming of age as a monetary union. There are plenty of indications of this, some diplomatic and some more substantial.
Kiev's celebration of its liberation from the Germans could have doubled as a victory parade for Belarus' Alexander Lukashenka. Just 10 days earlier, on 17 October, he had enjoyed what election officials described as an "elegant victory" in a constitutional referendum that paves the way for him to serve a third term. 
But Lukashenka's trip to Kiev ended abruptly before the victory parade that was the centrepiece of the celebrations. While Putin stayed for three days, Lukashenka restricted himself to just one day in Kiev, returning after laying a wreath and attending a concert.
His spokeswoman, Natallya Pyatkevich, said on 28 October that the visit had always been scheduled for one day. 
However, the press office of Ukrainian President Leonid Kuchma had announced that Lukashenka would arrive on a two-day visit.
Some analysts argue that Lukashenka's decision to rush back may have been an act of retaliation, as neither Kuchma nor President Vladimir Putin showed up at a military parade during Belarus' liberation festivities in July. 
Others believe he was angered by the cold reception that his referendum victory received from Putin. Certainly, relations between Lukashenka and Putin seem chilly. Although an overwhelming majority in Russia's State Duma voted on 22 October to recognize the Belarusian plebiscite as "free, open, democratic, and legitimate," the Russian president never officially congratulated Lukashenka on his victory. 
But, on the eve of his departure for Ukraine, Putin took matters further, indirectly criticizing Lukashenka for extending his term as president. "I believe that in many countries, at least in Russia, stability is essential now," Putin said. "And only the rule of law can ensure this stability. There is a law that is the basis of everything--and that is the constitution. That fundamental law permits [no more than] two presidential terms in a row, and I will be guided by this."
Belarusians may not have noticed Lukashenka's potentially embarrassing absence. Rather than show the parade, state-run television showed pictures of Lukashenka from the previous day.
Putin has thrown economic as well as political cold water on the relationship. On 27 October, the CEOs of Russia's Gazprom and Ukraine's Naftohaz Ukrainy signed an agreement that will almost quadruple the transit of gas via Ukraine (from 5 billion cubic meters in 2005 to 19 billion starting 2010). Belarus had been trying to persuade Russia to increase the volume of gas sent through Belarus, and some preliminary agreement was said to have been reached. 
While the deal was being signed in the Ukrainian president's residence, Lukashenka and Azerbaijan's President Ilham Aliev waited outside. A nervous-looking Lukashenka apparently remarked, "Did we come here to amuse the public or what?"

Striking at the heart of the Soviet heritage
In early November came further unwelcome news for Lukashenka. Some pro-Kremlin legislators have proposed to the Duma that the Nov 7 holiday, commemorating the October Revolution, be replaced by a new holiday on Nov 4 to be called National Unity Day. Russia's lower house of parliament, the State Duma, is expected to consider the measure in three required votes. 
"This day was and will be a landmark event, and its celebration cannot be abolished," Communist party leader Gennady Zyuganov said, according to the ITAR-Tass news agency. "People suffered for this holiday, and no one has the right to trample on our history." 
Criticism of President Vladimir Putin's government, changes to social benefits and complaints about inequality dominated the speeches. 
But some also chanted, "America, hands off Lukashenka!" a show of support for the authoritarian Belarus leader, who has resurrected Soviet-era symbols and institutions and has honoured now-disgraced Soviet-era officials. The United States has accused Lukashenka of human rights violations and threatened his country with sanctions.
Young protesters, wearing masks, stomped on the flag of the pro-Kremlin United Russia party and tried to burn it in Chelyabinsk, about 1,500 kilometres east of Moscow, Russia's NTV television reported. Police arrested several of the protesters. 
In the Siberian city of Tomsk, Communist party members carried posters reading, Hands off Nov 7th. 
A poll of 1,500 Russians by Romir polling agency found 77 per cent opposed scrapping the Nov 7 holiday. 

Lukashenka and the next Ukrainian president
Putin's visit to Ukraine had been interpreted as a very public endorsement of Prime Minister Viktor Yanukovych ahead of presidential elections on 31 October. Some, such as Stanislaw Shushkevich, Belarus' first head of state, and former deputy defence minister Andrey Sannikaw, see similar electoral calculations behind Lukashenka's absence: Yanukovych may not have wanted to have been tainted by association with the Belarusian president. (However, that fails to explain why many of Russia's and Ukraine's government-friendly media chose to claim that Lukashenka had been at the parade.)
Whom Lukashenka would like to see as Ukraine's president is debatable. Yanukovych might seem his natural preference, as he represents the less reform-minded spectrum of politics in Ukraine and as his grandfather came from Belarus' Vitsebsk province. But during his brief trip to Kiev, Lukashenka managed to find time to visit the leader of the Communist Party, Petro Symonenko. Moreover, analysts in Minsk argue that Lukashenka might actually prefer the more pro-Western opposition leader Viktor Yushchenko to carry the election, as this would doom Moscow to friendship with Belarus. 
Lukashenka himself has been balanced in his comments, saying this summer: "Yushchenko is a normal, strong, and sensible expert, and Yanukovych is a strong personality with Belarusian roots; both are very strong personalities."
Yushchenko's camp is distinctly cooler to Lukashenka. The deputy leader of Yushchenko's campaign, Anatoly Hrytsenko, told Belarusian journalists on 11 October that Ukraine would "have friendly relations" with Belarus in the event of a Yushchenko victory, but he said, "Belarus poses a problem as it has preserved Asian values," going on to criticize the persecution of the independent media and opposition leaders in Belarus.
Oleksandr Turchynov, another deputy chairman in Yushchenko's team, takes a much tougher stance. 
Speaking to the same group of reporters, he said "We are always ready to cooperate with Belarus' civil society, opposition, hold talks about cooperation at the state level, but not in the context of the regime that has failed to answer questions about high-profile disappearances and to democratise the electoral system," referring to the disappearance of four critics of Lukashenka in 1999 and 2000.
"There should be no double standards here, if we want to be a civilized country. If Western countries have a consistent position, we, too, should not keep silent."
Yanukovych offers a warmer relationship. Serhiy Tyhypko, his campaign chairman (and governor of the central bank), argues the Belarusian-Ukrainian relationship would "improve considerably" if Yanukovych were elected president.
Ukraine was Belarus' fifth-largest trading partner in 2003, according to official Belarusian statistics. Trade is booming. Bilateral trade amounted to US$681 million in the first eight months of 2004, a rise of almost 54 per cent on the same period last year. Belarus' exports jumped by 56 per cent, to US$334 million.

Stability uber alles
But Lukashenka's priority at the moment is not foreign policy, but--as he said on 26 October while rewarding officials who distinguished themselves during the referendum campaign--to maintain political stability and public order. 
Many of Lukashenka's "working meetings" with his government officials have lately focused on measures to ensure security and preserve stability. 
He stressed that Belarus is "under particular pressure from both the West and the East." He noted that "our enemies" would jump at the opportunity to magnify a single weak point of the government. He warned the authorities against making any "concessions" to those he called "criminals and arm-wavers" lest the country plunge into chaos.
Leanid Yeryn, chief of the Committee for State Security (KGB), has already proved to be one weak point. On 18 October, in a move unprecedented under Lukashenka, Yeryn went out to a crowd of protesters angered at the fraudulent referendum and parliamentary elections, and invited some journalists and Pavel Sevyarynets, leader of an opposition youth group, to meet him for talks. 
That came just an hour after riot police beat back protesters from the Presidential Administration. 
Since then, Yeryn has been away from his post. Rumours have swirled that Yeryn has been dismissed. KGB spokesman Alyaksandr Bazanaw was quick to explain that Yeryn was sent on leave. But, as a KGB officer said on condition of anonymity, nearly everyone in the organization understands that Yeryn will not be allowed to return to his post.
In the opinion of the opposition daily Belorusskaya Delovaya Gazeta, what the president most objected to was not that Yeryn went out to the crowd and not that he held a 40-minute talk with oppositionists but that he said, "Everyone will learn the truth when the time comes" when asked about the disappearance of four critics of the president in 1999 and 2000.

The Belarus-Russia Union option after all?
The Belarus-Russia Union state secretary is none other than Pavel Borodin, the eminence grise of the Kremlin in the Yeltsin years. Putin was once his deputy and has returned favours by protecting Borodin from extradition demands from the Swiss, who have charged him with money-laundering on an extensive scale.
The prehensile character of Borodin is revealed in the following anecdote, cited by certain ironists to demonstrate his honesty. He chaired the Yakutsk Executive Committee when it gave a lucrative contract to a German construction company, which, on completion of the deal, flew a Mercedes out to Yakutia to give him as a present. He refused it on the grounds that he could be prosecuted under the Soviet Industrial Code for bribery. But he added, "you could sell it to me." His interlocutors readily agreed and asked how much he was prepared to pay. He replied: "Twenty kopecks. And I will buy two of them." That is the sort of honest broker Putin likes around himself, a scoundrel, yes, but 'one of our scoundrels.' Just like Lukashenka in fact.
Borodin has a plethora of unusual ideas. He has proposed that St Petersburg should eventually become the capital of the new union. That would make a familiar backdrop for Putin if he avails himself of the opportunity to become its president after 2008. This is the future destiny Borodin is preparing for Putin, with the added inducement that he could then lead its expansion into other countries and consolidate 'a post-Soviet space.' It is by no means sure that this vista would appeal to the present master of the Kremlin, who must view the prospect with profound scepticism. He has his uses for Borodin, but does not have to accept his wilder fantasies.

« Top


Belarusian banks increase credit portfolio by 47.1%

Belarusian banks increased the overall volume of their combined credit portfolio by 47.1% to reach the equivalent of 8.195 trillion Belarusian roubles, a report published by the National Bank of Belarus said, Interfax News Agency reported.
With regard to the structure of the portfolio, the share of foreign currency loans went down from 50.4 per cent at the start of the year to 45.3 per cent, as of October 1st. Banks increased the volume of foreign currency loans in January-September by 32.2 per cent to the equivalent of US$1.72bn, while national currency loans grew 62.2 per cent to 4.48 trillion roubles. As far as the whole structure of credit portfolio is concerned, as of October 1st legal entities received 6.496 trillion roubles (43 per cent up on the year), individuals - 1.664 trillion roubles (65 per cent up). The rest of the credit portfolio falls on non-banking credit institutions. The share of short-term loans made 59.3 per cent, against 59 per cent at the outset of the year. As for the structure of loans given to individuals, the share of real estate loans fell from January's 77.5 per cent to 68.8 per cent. In 2003 Belarusian business banks increased the volume of advances portfolio by 55.6 per cent to 5.57 trillion roubles.

Belarusian president pleased with railway links with Russia

Belarusian President, Alexsander Lukashenka, is pleased with cooperation between Russian and Belarusian railway workers, the head of state said at a meeting with the chairman of the CIS Council for Railway Transport, Gennadiy Fadeyev, Belarusian television reported. 
The main function of the council is to work out coordinated actions, as the railway network was formed as an integrated network of the unified state [the USSR]. It, as well as common interests of the railways, has been preserved, the Belarusian president thinks. A meeting of railway company chiefs of [the CIS] member-states is taking place in Minsk for the 39th time. Alexsander Lukashenka called railway communications between countries the backbone which unites the CIS. Belarus is trying to support the railway network to make sure it works in the interests of all countries.
"We will always provide assistance to this Council to make sure it works accurately and without failings. And it is true that we have an interest in it, as a transit country. We should receive certain dividends from it. And we do receive dividends, albeit small ones, today. We are very satisfied with cooperation with the Russian Federation, the Russian Railways Company. We have practically no losses here. Finally, we have managed to reach an understanding on common problems and their solutions. We both understand that this cooperation is beneficial for Russia, not to mention Belarus," the president said.

« Top


Third mobile telephony licence awarded in Belarus

The Minsk City Executive Committee has registered a third GSM operator, Belapan learnt from Ahat state company. The new company called Best is fully state-owned and has been founded by Ahat and the state unitary enterprise Beltelekam [state-owned telecom monopolist], Belapan News Agency reported.
According to the Belarusian Communications Ministry, Ahat will own 70 per cent of the new company. The new GSM operator is now obtaining registration with the State Military-Industrial Committee. The start-up capital of the new company is almost US$150m.

« Top



Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 
For further information email:

« Top

« Back


Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774