Election Complicates Belarus Union

A monetary union between Russia and Belarus relies in part on the election of Vyacheslav Kebich, now prime minister of Belarus, as president in the July 10 run-off election, Russian Economics Minister Alexander Shokhin indicated Monday.Russian Prime Minister Viktor Chernomyrdin over the weekend signed a new agreement on the union with Kebich, making some concessions on the controversial issue of letting Belarus print Russian rubles when the union takes effect. Belarussian leaders asked President Boris Yeltsin for such concessions in a letter two months ago after the issue became a major point of contention in the former Soviet state.Shokhin said further negotiations were necessary to work out how Belarus can keep its financial independence without infringing on the status of the Russian Central Bank as the sole emitter of rubles. Shokhin added that it would be easier to conduct these negotiations with the current Belarussian leaders who "understand what's behind every line of our agreements.""We have a relationship of trust," he told a press conference Monday. "If other people start reading our agreements, they may have different ideas about them and a pause may occur in negotiations and the implementation of agreements."The economics minister said Russia and Belarus were busy searching for the quickest way to effect the monetary union, so a pause was the last thing they wanted after a year of strenuous debate.The idea of closer ties with Russia is popular in Belarus, which relies on Russia to purchase 80 percent of its industrial and agricultural output, according to Shokhin. Alexander Lukashenko, who beat Kebich in the first round of presidential elections last month, won over 45 percent of the vote by promising to reunify Belarus and Russia. Though Shokhin denied that the Russian government deliberately handed Kebich a trump card a week before the July 10 run-off against Lukashenko, he said that the monetary union agreements "would take a long time to explain to other people."Since a framework agreement on the union was signed three months ago, its implementation has been hampered by the Belarussian leaders' reluctance to make the Central Bank of Belarus a directly subordinate branch of the Russian Central Bank. Russian officials, including Shokhin, argued that only one bank could handle the emission of Russian rubles without driving up inflation.The document signed by Chernomyrdin and Kebich last weekend stated that Russia would not insist on full control of the Belarussian Central Bank if both nations can agree on an emission mechanism not requiring changes in Belarus' status as an independent nation.Shokhin said the Russian compromise proposal was that the "Russian Central Bank issues rubles for Belarus through that republic's Central Bank," but exactly how that would be done remained to be worked out by the end of July.The economics minister said the April agreement on monetary union remained unchanged on the issue of exchange rates between the ruble and the Belarussian coupon. Under the agreement, private citizens would be able to trade up to 200,000 Belarussian coupons for Russian rubles at a rate of one to one. Companies would use a rate based on the relative purchasing ability of the ruble and the coupon and their rate against the U.S. dollar.Overshadowed by the monetary union agreement were two other accords concerning Russian aid to the ailing Belarussian economy. In one accord, Chernomyrdin allocated 22 billion rubles ($11 million) to Belarus to help it cope with the consequences of the Chernobyl nuclear disaster. The other did away with import duties on Belarussian goods entering Russia.Shokhin said the import duties Russia collected on Belarussian goods amounted to as much as it paid for the lease of military bases there. According to the economics minister, the two countries decided to cancel out both parts of the equation, at the same time making Belarussian goods more competitive on the Russian market.