BELARUS NEWS AND ANALYSIS

DATE:

16/01/2007

Nice Belarus

// The president thanks the government for converting from fraternal to market relations

Russian President Vladimir Putin met with members of the Russian government yesterday and thanked them extravagantly for all they had done for the government of Belarus. Kommersant special correspondent Andrey Kolesnikov has the details from the Kremlin.

Prime Minister Mikhail Fradkov and Deputy Prime Ministers Dmitry Medvedev and Sergey Ivanov entered the room together when several ministers were already seated at the table. Usually they enter separately, one after the other for heightened theatrical effect. The president entered a few moments later.

The president thanked those present for their efforts in negotiations with Belarus, and then noted, "We have reached compromise decisions, which are acceptable for both sides. I would like to note that the main result of these talks is transition to market relations with our Belarusian partners, primarily, in the energy sphere."

He did not mind paying several billion dollars for that compromise. "I think the experts understand that this is a mild transition. It is suitable for our partners, and will take place over a period of several years," he added.

"But the transition to new principles in building these relations has been sealed in the documents, and this is the main point," the president continued. That comment was clearly meant not for television viewers, but for Belarusian President Alexander Lukashenko.

"Russia will continue supporting the Belarusian economy directly or indirectly for a long time to come, although it will considerably reduce this assistance beginning this year. As for the figures, as far as gas is concerned, this support will amount to about $3.3 billion, and for oil and oil products, $2.5 billion. The second figure is precise, and has been accepted by Belarus," the president said.

Putin was emphasizing that the agreements reached could not be changed. It was as if the negotiations were still going on and not as ironclad as he was saying.

"Thus, Russia's support for the Belarusian economy in 2007 will run into $5.8 billion in energy sources alone!" he said.

Most likely those large figures do not include $2.5 billion in subsidies to the Belarusian economy that were used to buy a 50-percent share in Beltransgaz. Kommersant has learned that the president reacted coolly to that purchase, since Gazprom did not obtain the golden share in the Belarusian company and will not have its own executives in it who could influence decision-making. That situation could change at the next election on the Beltransgaz board of directors.

"In the estimates of our Ministry of Finance," Putin continued, "the entire budget of Belarus is about $14 billion. This means that our assistance accounts for about 41% of this sum. I am sure you will agree that this is a big amount. But let me repeat once again that this is the price Russia is prepared to pay for a smooth and friendly transition to market relations; this is Russia's assistance to the fraternal Belarusian people."

If the Belarusian people rereads those statements a few times, it may suddenly become less fraternal.

"I would like to thank all those who took part in this difficult work," the president said with sincerity. "Let's adopt a serious and mature approach to this matter, without undue excitement and emotions. We should seek the implementation of the achieved agreements in the same manner as we conducted the talks."

So the president understands that the negotiations with Belarus aren't half over yet, and the real nightmare will begin when Lukashenko is supposed to keep up his side of the agreement, that is, in 2008.

The conversation moved on to a lighter topic. The president asked Minister of Economic Development and Trade German Gref to talk about recreational zones.

"Seven zones have been developed," Gref began, "in which it is proposed to establish recreation and tourism zones. Those are Kaliningrad Region, the Baltic Sea shore, Krasnodar Territory, the Black Sea shore, Stavropol Territory, Kavminvody: In area of practically all of the resort towns, the development of new territories for the establishment of tourism facilities on the international level is proposed, with ethnographic museums, sports facilities, health facilities:"

"What kind of museums? Ethnographic" the president asked.

"Ethnographic," Gref confirmed. "There is a very rich history there. Unfortunately, there has been very little scientific investigation and few historic objects recovered. The Silk Road was there: The share of ethnographic and educational tourism is expected to be high."

"Exhibitions are important for tourism, of course," the president conceded. "But the main appeal is the mineral waters."

"Of course, it's the mineral waters," Gref said. "The first proposal, of course, is the development of new sources of mineral waters and the creation of adequate infrastructure in order to provide full service. A zone in the area of Lake Baikal is also proposed."

"We expected to establish three or four zones, but we couldn't decide," Gref confessed. "Finally, Mikhail Efimovich [Fradkov] approved seven zones."

The Belarusian agreement still haunted the president though. He unexpected returned to the subject at the end of the meeting.

"We all understand very well," he said, "that, when we can't even calculate the hidden support for a state, it does not stimulate integration processes. On the contrary, it destroys the integration space. Only when relations become clear, put on paper, is it easy to make calculations and it can be understood what we can accomplish in the situation and what relationship will be just and equal."

That is, inconsolably disadvantageous to the Belarusian people.

Andrey Kolesnikov

Source:

http://www.kommersant.com/p734217/