Republic of Belarus
Area: 207,600 sq. km. (80,100 sq. mi.); slightly smaller than Kansas.
Terrain: Landlocked, low-lying with thick forests, flat marshes and fields.
Climate: Cold winters, cool and moist summers, transitional between continental and maritime.
Nationality: Noun--Belarusian(s). Adjective--Belarusian. Population (end of 2000): 9,990,000.
Population growth rate (2001 est.): -0.15%.
Ethnic groups: Belarusian (81.2%), Russian (11.4%), Polish, Ukrainian, Other (7.4%).
Religions (1997 est.): Eastern Orthodox, other (including Roman Catholic, Greek Catholic, Protestant, Autocephalous Orthodox, Jewish, and Muslim) 20%.
Languages: Belarusian and Russian (official), other.
Health: Infant mortality rate--14.38/1,000. Life expectancy--68.14 years.
Work force (4.9 million): Industry--27%; agriculture and forestry--14.1%; construction--7.0%; transportation, communications 7.2%; trade, catering 12.0%; health services, sports, social services---7.3%; education--10.4%.
Constitution: March 30, 1994; revised by unrecognized national referendum of November 24, 1996 giving presidency greatly expanded powers and became effective November 27, 1996.
Independence: 1991 (from Soviet Union).
Branches: Executive--president (head of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--bicameral: the House of Representatives (110 deputies) and the Council of the Republic (64 deputies). The Council of the Republic is the house of territorial representation. Eight members of the Council are appointed directly by the President of the Republic of Belarus, while the rest are elected by local region councils. The deputies to the House of Representatives are elected directly by the voters. Judicial--Supreme Court; Constitutional Court.
Administrative subdivisions: Six voblasti and one municipality.
Political parties: Agrarian Party (AP); Belarusian Communist Party (KPB); Belarusian Ecological Green Party; Belarusian Patriotic Movement (BPR); Belarusian Popular Front (BNF); Belarusian Social-Democrat Party (BSDP); Social-Democratic Hramada Party; Belarusian Socialist Party; United Civic Party (UCP); Liberal Democratic Party (LDBP); Party of Communists Belarusian (PKB); Republican Party of Labor and Justice (RPPS); Social Democratic Party of Popular Accord (PPA); Women's Party.
Suffrage: Universal at age 18.
The United States recognized Belarusian independence on December 25, 1991. After the two countries established diplomatic relations, the U.S. embassy in Minsk was officially opened on January 31, 1992. Ambassador David H. Swartz, the first ambassador to Belarus, officially assumed post on August 25, 1992--the first anniversary of Belarusian independence--and departed post on completion of his term in late January 1994. On November 7, 1994, Ambassador Kenneth S. Yalowitz assumed post. He was succeeded by Ambassador Daniel V. Speckhard who served from August 1997 to August 2000, spending one year recalled to Washington because of a dispute between the government and Western embassies over the confiscation of diplomatic residences. On April 6, 2000, President Clinton named Michael G. Kozak U.S. ambassador; he arrived in Belarus on October 20, 2000.
The two countries have exchanged top-level official visits. Stanislav Shushkevich, the Chairman of the Supreme Soviet of the Republic of Belarus, met with President Clinton in Washington in July 1992, and President Clinton visited Belarus on January 15, 1994. After this high point in relations, however, bilateral relations cooled following the election of President Lukashenko in July 1994. After the internationally unrecognized November 1996 constitutional referendum, which resulted in the dissolution of Belarus's legitimate parliament and the centralization of power in the executive branch, Lukashenko provoked a diplomatic crisis by demanding and eventually confiscating diplomatic residences on the Drozdy compound, taking the U.S., German, British, French, Italian, and IMF residences away from those missions, ignoring outstanding lease agreements, and leaving the confiscation uncompensated. In addition, Lukashenko used his newly centralized power to repress human rights throughout the country, but particularly members of the disbanded 13th Supreme Soviet, the legitimately elected parliament at the time, or former members of his own government.
For these reasons, the United States began to pursue a "selective engagement" policy with the Government of Belarus, limiting access for the government to U.S. Government officials at the Assistant Secretary level and below, and restricting U.S. assistance to the Belarus Government--with the exception of humanitarian assistance and exchange programs with state-run educational institutions. At the same time, the U.S. greatly expanded contacts with lower levels of the government and with the democratic opposition within Belarus.
U.S.-Belarusian Economic Relations
The U.S. Government continues to support the development of the private sector in Belarus and the transition to a free market economy, which is treated by the Belarusian authorities in a highly repressive and arbitrary manner. In addition to driving away many major foreign investors, Belarus' centralization and command approach to the economy has left only a trickle of U.S. Government and international assistance programs in this field.
In February 1993, a bilateral trade treaty guaranteeing reciprocal most-favored-nation status entered into force. In January 1994, the U.S. and Belarus signed a bilateral investment treaty, which has been ratified by Belarus but has not been ratified by the U.S. Senate. In addition, due to continuing repression of labor rights in Belarus, in 2000, the U.S. removed Belarus from the Generalized System of Preferences (GSP).
The United States has encouraged Belarus to conclude and adhere to agreements with the International Monetary Fund (IMF) on the program of macroeconomic stabilization and related reform measures, as well as to undertake increased privatization and to create a favorable climate for business and investment. Although there has been some American direct private investment in Belarus, its development has been relatively slow given the uncertain pace of reform. An Overseas Private Investment Corporation agreement was signed in June 1992 but has been suspended since 1995 because Belarus did not fulfill its obligations under the agreement. Belarus is eligible for Export-Import Bank short-term financing insurance for U.S. investments, but because of the adverse business climate, no projects have been initiated. The IMF granted standby credit in September 1995, but Belarus has fallen off the program and did not receive the second tranche of funding, which had been scheduled for regular intervals throughout 1996. Since that time, Belarus has had an ongoing discussion to relaunch IMF-backed reforms, concluding an arrangement for an IMF Staff-monitored program (SMP) in 2001. However, the authorities did not follow through with reforms as hoped, leaving an uncertain future for IMF-backed cooperation.
As a matter of policy, the U.S. Government currently does not encourage U.S. companies to invest in Belarus. Belarus' continuing problems with an opaque, arbitrary legal system, a confiscatory tax regime, cumbersome licensing system, price controls, and lack of an independent judiciary create a business environment not conducive to prosperous, profitable investment. In fact, several investors into Belarus have left in recent years, including the Ford Motor Company. The investment climate is exacerbated by the fact that the IMF and the World Bank have had to cancel or suspend their programs of cooperation with Belarus in recent years.
U.S. Assistance to Belarus
Since 1992, the U.S. Government has provided an estimated $569.4 million in assistance to Belarus, including $178.3 million in U.S. Defense Department excess and privately donated humanitarian commodities. U.S. Government assistance to Belarus peaked in 1994 at a level of approximately $76 million (consisting of more than $16 million in FREEDOM Support Act funds and some $60 million in funds from various U.S. Government agencies). However, U.S. assistance levels dropped sharply due to the lack of progress in democratic and economic reform after the coming to power of Aleksander Lukashenko in mid-1994. An overview of annual assistance levels is provided below:
Annual U.S. Assistance (including DoD excess and privately donated humanitarian commodities)
FY 1994--$101.5 million
FY 1995--$86.1 million
FY 1996--$69.2 million
FY 1997--$22.8 million
FY 1998--$17.2 million
FY 1999--$29.4 million
FY 2000--$24.3 million
FY 2001--$30.7 million
In FY 2001, the U.S. Government provided an estimated $30.73 million in assistance to Belarus, including $10.82 million in FREEDOM Support Act (FSA) assistance; $840,000 in Educational and Cultural Exchanges (ECE) funds; $500,000 from the Human Rights and Democracy Fund (HRDF) administered by the Bureau of Democracy, Human Rights and Labor; and $18.57 million in U.S. Defense Department excess and privately donated humanitarian commodities. U.S. Government-funded technical assistance was largely focused on voter mobilization ("get out the vote") activities related to the September 9 presidential election and promoting independent media coverage of election-related issues. In FY 2001, some 250 Belarusians ranging from high school students to mid-career professionals traveled to the United States on U.S. Government-funded training and exchange programs.
As mentioned above, U.S. Government assistance to Belarus continues to be subject to the policy of selective engagement with the Government of Belarus, under which no bilateral assistance is channeled through the Government of Belarus, except for humanitarian assistance and exchange programs involving state-run educational institutions. Virtually all U.S. Government assistance to Belarus is targeted at the country's non-governmental sector, particularly those NGOs that are working to promote the development of civil society and the free flow of information.
Training and exchange programs. Since FY 1993, U.S. Government-funded exchange programs have brought more than 2,200 Belarusian citizens to the United States for short-term professional or long-term academic training, including some 250 in FY 2001 alone. These programs are giving reform-oriented Belarusians an opportunity to develop their skills and establish contacts with U.S. counterparts.
Crossborder training programs. U.S. Government-funded Crossborder programs provide training to Belarusians in neighboring eastern European countries, giving the Belarusians an opportunity to see first-hand the results of successful postcommunist democratic and economic reforms.
Democracy fund small grants program. The U.S. embassy's Democracy Commission awards small grants to Belarusian NGOs in support of a wide range of democracy-building activities, including civic participation, independent print and electronic media, independent trade unions, legal aid organizations, youth and women's groups and human rights groups. Although Democracy Commission grants are limited in size--individual grants do not exceed $24,000, with most falling between $5,000 and $15,000--they have proven to be a very effective vehicle for supporting pro-reform segments of Belarusian society at the grassroots level.
Support for the National Endowment for Democracy. The U.S. Government provides supplementary funding to the National Endowment for Democracy (NED) in support of small grants to Belarusian NGOs and independent media outlets.
Political process programs. With funding from USAID, the International Republican Institute (IRI) and the National Democratic Institute (NDI) conduct in-country training focusing on party- and coalition-building, domestic election monitoring, and strengthening political skills for democratically oriented organizations, party leaders and activists.
Independent print media. With funding from USAID, the ProMedia II Program implemented by the International Research and Exchanges Board (IREX) offers technical and legal assistance to Belarus's independent media, especially in the regions outside Minsk. IREX has adapted its activities to address the extremely adverse working environment for independent media in Belarus by providing legal assistance to help journalists defend their rights.
Rule of law programs. With funding from USAID, the American Bar Association's USAID-funded Central and Eastern European Law Initiative (ABA/CEELI) is strengthening law-related NGOs and educating average Belarusian citizens about their rights under Belarusian law. ABA/CEELI has been working with lawyers from 22 legal advice centers run by independent trade unions and NGOs to improve the quality and increase the availability of free legal advice to the population.
NGO development programs. With funding from USAID, the Counterpart Alliance for Partnership (CAP) seeks to promote civil society development in Belarus by providing assistance to Belarusian NGOs, with a focus on legal aid and education to strengthen the capacity of its Belarusian NGO partners to protect their own rights.
Support for Belarusian entrepreneurs. Although the lack of economic reform in Belarus has precluded a broader program of USAID-funded economic development assistance, USAID has sought to help Belarusian enterpreneurs to organize and defend their rights.
Western NIS Enterprise Fund (WNISEF). WNISEF runs a small and medium-sized enterprise (SME) credit and capital investment program in Ukraine, Moldova, and Belarus. However, because of the restrictive environment for private SMEs in Belarus, WNISEF has had no active credit and investment projects in Belarus for the past several years.
U.S. Department of State--Operation Provide Hope. In FY 2001, the Humanitarian Programs Division of the Office of the Coordinator of U.S. Assistance to the NIS transported approximately $18.6 million in privately donated and U.S. Defense Department excess humanitarian commodities to Belarus.
Security programs. Belarus was previously a recipient of assistance under the U.S. Defense Department's Cooperative Threat Reduction (CTR) Program, whose objective is to reduce the threat posed to the United States by weapons of mass destruction remaining on the territory of the former Soviet Union, by promoting denuclearization and demilitarization and preventing weapons proliferation. However, since 1997, Belarus has not been certified annually by the President as eligible to receive assistance under the CTR Program due to the Belarusian Government's poor record on human rights. This resulted in the suspension and reallocation to other countries of unobligated CTR assistance funds originally intended for Belarus, as well as restrictions on other security-related assistance to Belarus. The United States and Belarus signed a government-to-government umbrella agreement on CTR assistance in 1992, seven agency-to-agency CTR implementing agreements, and one memorandum of understanding and cooperation; the umbrella agreement was extended for one year in October 1997, but has now expired.
For more detailed information on U.S. Government-funded assistance programs, please see the Annual Reports on U.S. Government Assistance to Eurasia, which are available online at the following addresses:
The FY 2000 Annual Report is available at http://www.state.gov/p/eur/rls/rpt/2001.
The FY 1994-99 annual reports are available at http://www.state.gov/www/regions/nis/nis_assist_index.html
Principal U.S. Embassy Officials
Deputy Chief of Mission--John Kunstadter
Political/Economic Officers--Steve Fagin, Thaddeus Kontek
Consular Officer--Nancy Szalwinski
Administrative Officer--Thomas Burke
Regional Security Officer--Bradford McDougle
Public Affairs Officer--D. Michael Reinert
Defense Attache-- LTC Kirk Haschak
The U.S. Embassy in Minsk, Belarus is located at Starovilenskaya 46; tel: (375-17) 210-12-83 (375-17) 234-78-53.
While archeological evidence points to settlement in today's Belarus at least 10,000 years ago, recorded history begins with settlement by Baltic and Slavic tribes in the early centuries A.D. With distinctive features by the ninth century, the emerging Belarusian state was then absorbed by Kievan Rus' in the 9th century. Belarus was later an integral part of what was called Litva, which included today's Belarus as well as today's Lithuania. Belarus was the birthplace of the Grand Duchy of Lithuania (Belarusian was the state language of the Grand Duchy until 1697, in part owing to the strong flowering of Belarusian culture during the Renaissance through the works of leading Belarusian humanists such as Frantzisk Skaryna). Belarus was the site of the Union of Brest in 1597, which created the Greek Catholic Church, for long the majority church in Belarus until suppressed by the Russian empire, and the birthplace of Thaddeus Kosciuszko, who played a key role in the American Revolution. Occupied by the Russian empire from the end of the 18th century until 1918, Belarus declared its short-lived National Republic on March 25, 1918, only to be forcibly absorbed by the Bolsheviks into what became the Soviet Union. Suffering massive population losses under Stalin and the Nazi occupation, Belarus was retaken by the Soviets in 1944. It declared its sovereignty on July 27, 1990, and independence from the Soviet Union on August 25, 1991. It has been run by the authoritarian Aleksander Lukashenko since 1994.
As part of the former Soviet Union, Belarus had a relatively well-developed industrial base; it retained this industrial base following the breakup of the U.S.S.R. The country also has a broad agricultural base and a high education level. Among the former republics of the Soviet Union, it had one of the highest standards of living. But Belarusians now face the difficult challenge of moving from a state-run economy with high priority on military production and heavy industry to a civilian, free-market system.
After an initial outburst of capitalist reform from 1991-94, including privatization of state enterprises, creation of institutions of private property, and entrepreneurship, Belarus under Lukashenko has greatly slowed its pace of privatization and other market reforms, emphasizing the need for a "socially oriented market economy." About 80% of all industry remains in state hands, and foreign investment has been hindered by a climate hostile to business. The banks, which had been privatized after independence, were renationalized under Lukashenko.
Economic output, which declined for several years, revived somewhat in the late 1990s, but the economy remains dependent on Russian subsidies. Until 2000, subsidies to state enterprises and price controls on industrial and consumer staples constituted a major feature of the Belarusian economy. Inflationary monetary practices, including the printing of money also has been regularly used to finance real sector growth and to cover the payment of salaries and pensions.
Peat, the country's most valuable mineral resource, is used for fuel and fertilizer and in the chemical industry. Belarus also has deposits of clay, sand, chalk, dolomite, phosphorite, and rock and potassium salt. Forests cover about a third of the land, and lumbering is an important occupation. Potatoes, flax, hemp, sugarbeets, rye, oats, and wheat are the chief agricultural products. Dairy and beef cattle, pigs, and chickens are raised. Belarus has only small reserves of petroleum and natural gas and imports most of its oil and gas from Russia. The main branches of industry produce tractors and trucks, earth movers for use in construction and mining, metal-cutting machine tools, agricultural equipment, motorcycles, chemicals, fertilizer, textiles, and consumer goods. The chief trading partners are Russia, Ukraine, Poland, and Germany.
The massive nuclear accident (Apr. 26, 1986) at the Chernobyl power plant, across the border in Ukraine, had a devastating effect on Belarus; as a result of the radiation release, agriculture in a large part of the country was destroyed, and many villages were abandoned. Resettlement and medical costs were substantial and long-term.
In 2000, Belarus managed to unify its currency exchange rates, tightened its monetary policy, and partially liberalized the foreign currency market. These developments led to the conclusion of a staff-monitored program in cooperation with the IMF, addressing, among other topics price and wage liberalization, a widening of privatization, fiscal reform, the adoption of international accounting standards in the banking sector, and the repeal of several egregious laws and decrees to improve the investment climate. The program was conducted between April and September 2001, with relatively disappointing results.
The World Bank is currently considering a new country assistance strategy for Belarus, focusing on areas such as targeted social assistance, AIDS/HIV and tuberculosis prevention, environmental protection, Chernobyl-related damage, and small and medium enterprise development. In June 2001, the World Bank approved a loan of $22.6 million to finance repairs in over 450 schools, hospitals, and homes for orphans, the elderly and the disabled throughout Belarus.
Belarus has established ministries of energy, forestry, land reclamation, and water resources and state committees to deal with ecology and safety procedures in the nuclear power industry. The most serious environmental issue in Belarus results from the accident at the 1986 Chernobyl nuclear power plant. About 70% of the nuclear fallout from the plant landed on Belarusian territory, and about 25% of the land is considered uninhabitable. But government restrictions on residence and use of contaminated land are not strictly enforced. As noted, the government receives U.S. assistance in its efforts to deal with the consequences of the radiation.
GOVERNMENT AND POLITICAL CONDITIONS
Since his election in July 1994 to a 5-year term as the country's first President Alexsandr Lukashenko has consolidated power steadily in the executive branch through authoritarian means. He used a nondemocratic November 1996 referendum to amend the 1994 Constitution in order to broaden his powers and illegally extend his term in office. The new constitution has a popularly elected president who serves a 5-year term. The bicameral parliament consists of the 64-seat Council of the Republic and the 110-seat Chamber of Representatives. The president appoints the prime minister, who is the head of government. Administratively, the country is divided into six regions or "voblasts".
In October 2000, parliamentary elections occurred for the first time since the disputed referendum of 1996. According to OSCE/ODIHR, these elections failed to meet international standards for democratic elections. In particular the elections fell far short of meeting the minimum commitments for free, fair, equal, accountable and transparent elections. Following on from the flawed parliamentary elections, and based on the unrecognized 1996 constitution, Lukashenko announced early in 2001 that presidential elections would be held. International monitors noted sweeping human rights violations and nondemocratic practices throughout the election period, including massive vote counting fraud. These irregularities led the OSCE/ODIHR to find that these elections also failed to meet Belarus' OSCE commitments for democratic elections.
Government restrictions on freedom of speech and the press, peaceful assembly, religions and movement all increased in 2001. Despite the constitutional provisions, a 1998 government decree limited citizens right to express their own opinion. Although independent media remain widely available in Minsk, as part of a continuing crackdown on opposition activity, the authorities stepped up its campaign of harassment against the independent media. The authorities continued to restrict severely the right to a free press through near-monopolies on the means of production of newsprint; means of distribution on national level broadcast media, such as television and radio, and by denying accreditation of journalists critical of the regime.
Freedom of assembly is restricted under former Soviet law, which is still valid. It requires an application at least 15 days in advance of the event. The local government must respond positively or negatively at least 5 days prior to the event. Public demonstrations occurred frequently in 2001, but always under government oversight.
The constitution provides for freedom of religion; however, the authorities restrict this right in practice. Although Article 16 of the 1996 amended constitution, which resulted from an illegal referendum, reaffirms the equality of religions and denominations before the law, it also contains restrictive language that stipulated that cooperation between the state and religious organizations "is regulated with regard for their influence on the formation of spiritual, cultural, and country traditions of the Belarusian people."
According to the constitution, citizens are free to travel within the country and to live and work where they wish; however, the authorities restrict these rights in practice. The authorities issue internal passports to all adults, which serve as primary identity documents and are required to travel, obtain permanent housing, and for hotel registration.
The constitution provides for the right of workers--except state security and military personnel--to voluntarily form and join independent unions and to carry out actions in defense of workers'rights, including the right to strike. In practice, however, these rights are limited. The Belarusian Free Trade Union (BFTU) was established in 1991 and registered in 1992. Following the 1995 Minsk metro workers strike, the President suspended its activities. In 1996 BFTU leaders formed a new umbrella organization, the Belarusian Congress of Democratic Trade Union (BCDTU), which encompasses four leading independent trade unions and is reported to have about 15,000 members.
In May 2001, a complaint was lodged with the ILO by several trade union organizations. A trade union campaign was carried out to raise international awareness and put pressure on the Belarus government. On July 27, 2001, they continued to "create problems for him on the international stage." On several occasions, warnings were given to trade unions condiered too political and not sufficiently constructive. Twice, on July 27 and September 27, the bank accounts of the FTUB were frozen by the authorities. FTUB leaders were threatened with prosecution. Investigations were carried out, but with no result. The accounts were then reopened.
Principal Government Officials
Prime Minister--Gennady Novitsky
Foreign Minister--Mikhail Khvostov
Ambassador to the U.S.--Valery Viliamovich Tsepkalo
Ambassador to the UN--Sergei Ling
Belarus' embassy in the U.S. is at 1619 New Hampshire Ave., NW, Washington, DC 20009; tel: 202-986-1606; fax: 202-986-1805; website: http://www.belarusembassy.org
DEFENSE AND MILITARY ISSUES
The United States continues to support Belarus' adherence to arms control agreements and treaties to which it has previously entered. Added to this list is Belarus' recent ratification of the Open Skies Treaty. Cooperation in all such agreements has been exemplary.
The primary engagement between the U.S. military and Belarus continues to be in the humanitarian assistance arena. Completion of the renovation of the Gomel Regional Blood Transfusion Center in July of this year with a project cost of $475,000 marked the high point of this assistance. Future programs have been nominated and are expected to receive approval in fiscal year 2002. These, coupled with continuous flow of Humanitarian Excess Property (HEP-EP) form EUCOM Cold War stocks into the Republic, will continue to define the HA program.
Direct military to military cooperation continues to be minimal. Belarus currently has no IMET program, and bilateral exercises and cooperation are nonexistent. There is a great desire on the Belarusian side to re-establish such cooperation and contacts but it has not been possible due to the political situation. The only program that is still functional within this category is the attendance of Belarusian Military Officers in George C. Marshall Center programs.
Potential areas of cooperation can be seen in the area of mine disposal, demining and small arms destruction. Belarus possesses an unstable inventory of about 3.5 million anti-personnel mines, which require proper disposal. Officials have been working with foreign governments to acquire financial and technical support for these efforts but have met with little tangible success. In addition to this there are numerous World War II vintage minefields which are still in place and killing or injuring several Belarusians every year. The Belarusian Government would quickly accept assistance in either of these areas.
The new Minister of Defense is experiencing success in the area of military reform. Planned changes include combining the Air and Air defense Forces, downsizing the force structure about 30% from 83,000 to 60,000, transitioning from a conscript to a contract force, and modernizing the command and control structure by creating a Ground Forces Command between the Ministry of Defense and the units in the field. Implementation of these reforms will take an unspecified amount of time.
The area of greatest concern continues to be the link between the Belarusian MOD, the sale of arms, equipment services to, and the training of personnel from States of Concern. Included in this category (but not limited to) are the sales of weapons to Libya and Syria, along with reported weapons transfers, upgrades of Iraqi equipment (S-300 system) and air defense training of Iraqi service members.
Under an arrangement with the former U.S.S.R., Belarus was an original member of the United Nations. It also is a member of the Commonwealth of Independent States (CIS--a group of 12 former Soviet republics) and its customs union, the Organization for Security and Cooperation in Europe (OSCE), NATO's Partnership for Peace, the North Atlantic Cooperation Council, the International Monetary Fund, and the World Bank.
Following the recognition of Belarus as an independent state in December 1991 by the European Communities, EU-Belarus relations initially experienced a steady progression. The signature of the Partnership and Cooperation Agreement (PCA) in 1995 signaled a commitment to political, economic and trade cooperation. Significant assistance was provided to Belarus within the framework of the Tacis Program and also through various aid programs and loans. However progress in EU-Belarus relations stalled in 1996 after serious setbacks to the development of democracy, and the Drozdy conflict. The EU did not recognize the 1996 constitution, which replaced the 1994 constitution. The Council of Ministers decided against Belarus in 1997: The PCA was not concluded, nor was its trade-related part; Belarusian membership in the Council of Europe was not supported; bilateral relations at the ministerial level were suspended and EU technical assistance programs were frozen.
Acknowledging the lack of progress in relation to bilateral relations and the internal situation following the position adopted in 1997, the EU adopted a step-by-step approach in 1999, whereby sanctions would be gradually lifted upon fulfillment of the four benchmarks set by the OSCE. In 2000, some moderately positive developments toward the implementation of recommendations made by the OSCE AMG were observed but were not sufficient in the realm of access to fair and free elections.
Russia is the largest partner for Belarus in the economic and political fields. In terms of trade, two-thirds of Belarusian exports go to Russia. Due to the structure of Belarusian industry, Belarus relies heavily on other CIS countries and Russia in particular both for export markets and for the supply of raw materials and components. The introduction of free trade between Russia and Belarus in mid-1995 led to a spectacular growth in bilateral trade, which was only temporarily reversed in the wake of the financial crisis of 1998. Lukashenko seeks to develop a closer relationship with Russia. The framework for the Russia-Belarusian Union was set out in the Treaty On the Formation of a Community of Russia and Belarus (1996), the Treaty on Russia-Belarus Union, the Union Charter (1997), and the Treaty of the Formation of a Union State (1999). The integration treaties contain commitments to monetary union, equal rights, single citizenship, and a common foreign and defense policy. They also have established a range of institutions modeled after the EU. After protracted disputes and setbacks, the to countries' customs duties were unified as of March 2001. Belarus has made progress in monetary stabilization in the context of ongoing negotiation with the Russian Central Bank on monetary union.