Publication: Monitor Volume: 4 Issue: 68

Government officials marked the first anniversary of the April 2 ratification of the Russo-Belarusan union by smoothing the friction that erupted last month following the collapse of the Belarusan ruble (zaichik). This friction took several forms: allegations by Minsk that Belarus’s currency crisis had been engineered in Moscow, threats of drastic cutbacks in Russian gas exports to Belarus, frozen Russian assets in Belarusan banks, and a Minsk threat to disrupt Russian gas exports to Central and Western Europe.

Judging by official statements made during the anniversary proceedings, no such tensions ever existed. Russian Deputy Prime Minister Ivan Rybkin declared that "the Union of Russia and Byelorussia is now a reality." Belarusan President Alyaksandr Lukashenka announced that the two countries are "destined by history to be together." Working groups of Russian and Belarusan government and national bank officials conferred on what Rybkin called "the most pressing issues of cooperation between Moscow and Minsk", concerning monetary, financial and customs activities, as well as energy trade between the two countries. (Itar-Tass, April 2)

Also on April 2, Belarus’s Supreme Soviet confirmed Lukashenka’s appointment of former First Deputy Prime Minister Pyatr Prakapovich as the new president of the Belarusan National Bank (BNB). Prakapovich’s predecessor, Henadz Aleynikov, and three of Aleynikov’s deputies were unceremoniously removed by Lukashenka in the wake of the zaichik’s collapse in late March. Prakapovich, a graduate of the Dnipropetrovsk Institute of Engineering and Construction, admitted that he has no banking experience. He promised, however, during his confirmation hearing that he would remedy his "blank spots" within four months. (Interfax, April 2)

Whether Prakapovich proves to be a better central banking than his predecessors remains to be seen. The governments’ willingness to quiet what had been a very serious row is striking, however, and raises questions about the nature of the compromise apparently worked out. The possibility that Rybkin, a noted advocate of CIS integration, may have used the absence of strong economic reformers in the Russian government to offer Lukashenka fresh assistance, can not be excluded.

Russian Black Sea Fleet’s Eastern Base in Bad Shape.