Belarus: economic 'miracle' in a Soviet time warp

Minsk, Feb 15: Is Belarus a time capsule which has preserved the Soviet Union? Or ''Europe's last dictatorship'' as Washington claims? Or an economic miracle from which its Western neighbours should learn? As the elderly Russian-made Tupolev 134 jet eased off the runway heading for the capital Minsk, the answer seemed obvious.

The flight on national carrier Belavia featured metal fold-down trays, swirling flowery burgundy coloured curtains, large porthole-sized windows and in-flight newspapers whose first seven pages were devoted to government cultural policy.

Arrival at Minsk airport, a hulking pile of concrete and grey marble finished in the early 1990s as the Soviet Union breathed its last, reinforced the cliches. Posters of happy citizens proclaiming the glories of Belarus adorned its columns.

Then the script started to change.

The drive into town threw up a landscape busy with construction. Dozens of new, decent-quality apartment buildings crowded the outskirts of the capital for sale with finance available. The roads buzzed with Volkswagens and Opels.

A Porsche dealership graced the main highway, not far from the latest project of President Alexander Lukashenko, a futuristic polyhedron decorated with twinkling purple lights which houses the National Library.

Central Minsk featured smart new buildings, clean streets, a McDonald's and restaurants dramatically better than their Soviet predecessors. The Classical portico of the security police headquarters, lit a soft yellow by night, added local colour.

Economists dub it the ''Belarus puzzle'' an economy which has retained some Soviet-style central planning, promises full employment, pays its citizens generous welfare and pensions but which has grown at around 9 percent for the past three years.

In fact, there is no great secret about its success. Cheap oil and gas from Russia, as well as favourable trade terms, have allowed Belarus to defy economic gravity.

But Russia is now forcing Belarus to pay closer to market price for its oil and gas, sparking a furious row with its neighbour.

Moscow's disinclination to prop up its neighbour threatens to undermine Belarus's ''miracle'' economy, experts say.

''Belarus is a rare case of a country whose economy is almost entirely artificial,'' Business Week wrote in a recent article.

Shades of Soviet Past

Belarus ministers see things rather differently.

''We took the best of the Soviet system and then we took what we could from the new conditions and ensured people didn't suffer,'' Finance Minister Nikolai Korbut said in an interview.

Several top ministers were wheeled out for a visit by a group of Reuters journalists.

They worked from offices redolent of Soviet times long corridors of doors, parquet floors, workplaces graced with official portraits and rows of white telephones.

''The president is a very conservative man,'' an official said.

Lukashenko's conservatism extends to politics, where opposition is strongly discouraged and elections return big majorities in favour of the president's continued rule. The European Union and the United States say the polls are rigged.

Preparations for a presidential interview were similarly risk-averse. Nervous officials telephoned constantly to re-arrange times and explain protocol.

Lukashenko lived up to expectations, railing against the West in the two-hour conversation for imposing ''impossible demands'' for free media and fair elections and vowing that nobody would break the iron will of the Belarussian people.

''The biggest threat to Lukashenko is Lukashenko himself,'' opposition leader Alexander Milinkevich said in a conversation afterwards at his modest flat in central Minsk. ''Lukashenko wants absolute power.'' Milinkevich predicted that the president's determination to resist reform would turn Belarus into a ''collective farm state''.

Given this, and Lukashenko's own background as a state farm manager, a visit to a collective farm seemed appropriate.

Presidential officials obliged and the next day brought a trip to a high-tech cowshed boasting computerised German milking machines and microchipped cows whose lactation was tracked hourly.

Farm manager Nikolai Khilko, wearing a dapper suit and tie, explained that Belarus's state farms were now free to hire and fire and even take over the land of failing rivals if they wished.

''If potatoes are loss-making, we get out of potatoes,'' he said, flanked in his office by a portrait of Lukashenko.

Other sections of the Belarus economy are more traditional.

At the state-owned BelAZ truck factory just outside Minsk, five-year plans set direction and workers labour in a dark, Soviet-era plant under a banner quoting the president's words.

They weld huge hulks of metal to create some of the world's largest vehicles - dump trucks carrying up to 320 tonnes, designed for use in quarries and opencast mines.

''The president visited us last year and drove the biggest truck,'' BelAZ director Pavel Mariev said as a row of mighty yellow machines stood behind him, engines throbbing. ''He said you have to be very intelligent to build trucks like these.'' The flight home was aboard a nearly new Belavia Boeing 737.

Reuters