Russia unveils major rescue for Belarus

25th November 2011, Comments 0 comments

Prime Minister Vladimir Putin unveiled a major Russian rescue package for Belarus on Friday, winning a major stake in its neighbour's economy, just a day after Minsk jailed a top rights campaigner.

Putin said ahead of a meeting with visiting Belarus President Alexander Lukashenko that Russia was slashing the price Minsk has to pay for gas to less than half the average paid by other European states.

In an important quid pro quo, Russia will acquire the half of its neighbour's gas transport network it does not own already and also win full control of the Yamal gas pipeline to Europe that stretches through Belarus.

Putin said the price Belarus pays for Russian gas would drop from the $244 per thousand cubic metres this year to $164 at the start of 2012. Minsk would start paying Russia's own domestic price by 2014.

"This is a substantial rebate. It will help to keep at least $2 billion in Belarus," Putin said in televised remarks.

"At the same time, we agree that the Russian company Gazprom is acquiring the entire 100 percent stake in Beltransgaz -- the gas transport system of Belarus."

Putin initially said Ukraine before quickly correcting himself. Ironically, the slip came as Moscow also presses ahead with efforts to win control of Ukrainian gas pipelines in exchange for cheaper shipment costs.

Russia in addition offered Belarus a $10 billion loan over 15 years for the construction of the country's first nuclear power plant since the 1986 Chernobyl accident in ex-Soviet Ukraine.

Moscow initially agreed to finance the project in June 2009.

The deals' signature comes as Belarus struggles with a massive current account deficit that has forced it to devalue its currency by some 65 percent and sell stakes in its prized economic assets to Russia and other states.

The economic turmoil stoked protests against Lukashenko's 17-year old regime that led to the arrests of hundreds of demonstrators and convictions of top opposition leaders.

The former Soviet republic's rights record drew more European condemnation on Thursday when a Minsk court jailed leading human rights campaigner Ales Beliatsky for 4.5 years for tax evasion.

Russia has offered only mild criticism of Lukashenko's crackdown and is now securing economic deals that analysts say should afford Minsk at least another year to deal with the economic crisis.

© 2011 AFP

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