BELARUS NEWS AND ANALYSIS

DATE:

12/02/2009

Belarus Wants Obama to Ditch 'Dictator' Tag, Spur Foreign Trade

By Leon Mangasarian

Feb. 12 (Bloomberg) -- Belarus wants to reach out to President Barack Obama in a bid to shake off the "last dictatorship" label imposed by the Bush administration as it seeks to stimulate foreign investment and trade.

"We are very much open to a much better relationship with the U.S.," Foreign Minister Sergei Martynov said in an interview in Berlin today, welcoming the "new tone" in foreign relations outlined by Vice President Joe Biden in a Feb. 7 speech in Munich. "We're prepared to engage with the new administration."

Belarus "lives or dies by foreign trade" because it exports 65 percent of its gross national product, Martynov said, speaking in English, adding that the global economic crisis is hurting its trading partners' ability to buy Belarusian goods.

Belarus, a former part of the Soviet Union that borders Russia and three European Union states, has given signals that it wants to open up after Belarus President Alexander Lukashenko was dubbed "Europe's last dictator" in 2005 by then U.S. Secretary of State Condoleezza Rice. All the country's elections since 1996 have been criticized by international observers, and in May 2008 the U.S. Treasury Department froze the assets of three subsidiaries of a state-run Belarusian oil company.

Since then, the Belarusian authorities have released the last three political prisoners, prompting the EU to offer to ease sanctions on Belarus if it adheres to international electoral standards. Opposition leader Alexander Milinkevich said in an interview in September that "the people around Lukashenko are changing," adding to signs of a thaw in the country.

'Way Off'

The dictatorship tag "is way off and unsubstantiated," said Martynov, who was in Berlin to meet with German Foreign Minister Frank-Walter Steinmeier -- the first talks at such a level in 14 years, according to the German Foreign Ministry. The sanctions imposed on Belarusian companies are "unfounded and unjust" and will have to be addressed in talks with U.S. administration officials.

"I welcome the reform steps that Belarus has taken in the past weeks and months," Steinmeier said in a statement. "The priority now is to convert these steps into a sustainable reform process."

Martynov said Belarus, which has a population of 10 million, is opening up its economy to foreign investors and capital from Europe and the U.S. Most of Belarus's exports are to Europe and Russia, with 45 percent going to the EU and 35 percent to Russia, he said.

"Until recently we were not keen to allow too much foreign investment and capital into our economy because we thought we were not ready," he said. Now, Belarus is "confident" and is "opening up the economy for investors."

Tractor Output

"We produce 6 percent of the world output of tractors," Martynov said. "We're a manufacturing economy."

Selling off of state companies is seen in a more positive light because their value has increased over the past 10 years during which Belarus has had annual economic growth of between 6 percent and 10 percent, he said.

The devaluation of the Belarusian ruble by 20 percent last month was a one-off move in part to help boost exports, he said.

"We do not have particular plans for further abrupt devaluations of the currency," Martynov said.

He said there were also no plans to replace the Belarusian ruble with the Russian ruble in the near future. "It might come at a later stage." Belarus and Russia set up a union of both countries during the late 1990s.

Belarus has so far spent half of a $2 billion loan from Russia made last November and the rest will be disbursed this month, Martynov said. He said his government was seeking another $3 billion from Russia to bolster Belarus exports.

"Russian customers are already experiencing difficulties in paying us for our goods," he said.

Air Defense

On relations with Russia, Martynov said that an accord signed Feb. 3 creating a joint Russian-Belarus air defense system wasn't aimed at U.S. plans to deploy a missile-defense shield in the Czech Republic and Poland, which borders Belarus to the west.

"I believe it's kind of been blown out of proportion," said Martynov. "We have had a joint air defense system for 10 years with Russia and the agreement doesn't add anything military to air defense."

Although Belarus has close ties with the Russia government, President Lukashenko, 54, didn't follow Russia in recognizing the independence of breakaway Georgian regions South Ossetia and Abkhazia after the Russian-Georgian war last August.

"We continue to consider the recognition of South Ossetia and Abkhazia but no decisions have been taken," Martynov said.

Martynov said that while Belarus wants expanded relations with the EU, his country has no plans to seek membership in the 27-nation bloc. "We understand we are not ready for that," he said.

To contact the reporter on this story: Leon Mangasarian in Berlin at lmangasarian@bloomberg.net

Source:

http://www.bloomberg.com/apps/news?pid=20601100&sid=aQHmjAs5W1TY&refer=germany

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