Belarus seeking $3B loan from Moscow

December 22, 2008 4:22:02 AM PST
Belarusian President Alexander Lukashenko met with his Russian counterpart Monday for talks that reportedly included a request for $3 billion in loans to help Belarus' Soviet-style economy weather the global financial meltdown. It's the second time this year that Lukashenko has turned to his lukewarm ally for help in supporting his ex-Soviet republic's economy. Earlier he sought a $2 billion loan from Moscow.

Before the visit, the Kremlin said Lukashenko and Russian President Dmitry Medvedev and would discuss "a wide range of issues of bilateral cooperation" including "cooperation in the fuel and energy sector."

But the daily Kommersant, citing unidentified Russian Foreign Ministry officials, said Belarus was seeking $3 billion in loans from Moscow but that Moscow wants Belarus to recognize two breakaway Georgian regions as independent nations as a condition for providing the money.

Russia recognized South Ossetia and Abkhazia after its August war with Georgia, but so far only one other nation - Nicaragua - has followed suit.

Russian Deputy Finance Minister Dmitry Pankin was later quoted by ITAR-Tass and Interfax as saying that Belarus had asked Russia for a 100 billion ruble loan ($3 billion).

Kommersant also reported that Moscow wants Belarus to turn over control of its state-run natural gas transport system as a condition for the money.

Belarus relies heavily on cheap imports of Russia oil and gas and it's a key transit nation for Russian natural gas headed to Europe. But the countries have clashed over price contracts in the past and Europe-bound supplies have been disrupted - to Moscow's dismay.

In brief comments before TV cameras prior to their Kremlin meeting, Medvedev said 2008 was an "eventful and in some sense complicated year."

"But at the same time, with regard to the dynamics of the Russian-Belarusian partnership, it was not bad," he said.

Lukashenko said Belarus considers Russia a strategic partner.

"Russia is our sister country. Whether one likes it or not, we begin with that stance and we always will act accordingly. That is how the Belarusian people are attuned," he said.

Belarus's economy is mainly centrally controlled, and the government has burned through its gold reserves this year trying to prevent the collapse of the Belarusian ruble.

Last week Lukashenko announced he was also seeking $5 billion in aid from the United States, even though Washington has dubbed him "Europe's last dictator" for his authoritarian rule.

The country is also negotiating for a $2 billion loan from the International Monetary Fund.


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