Another Kremlin project that would seem to work against plans to debureaucratize the state–not to mention economic reform writ large–is the Russia-Belarus Union. Yet that project moved a bit closer to realization last week, when Belarusan President Alyaksandr Lukashenka came to Moscow for a meeting of the union’s Supreme State Council, which includes the Belarus and Russian presidents and various other officials of both states. During the meeting, Putin and Lukashenka, who was denounced by the Bush administration as “Europe’s last dictator” last September after he was reelected in a vote almost universally deemed not free and unfair, signed a host of economic agreements. Most important, the two leaders agreed to establish unified prices for gas, electricity and railroad transport inside both countries. This will amount to a subsidy of at least $200 million a year to Belarus’ unreformed Soviet-style economy. In return, Gazprom, Russia’s state-controlled gas monopoly, will gain control of Belarus’ gas pipelines.

The Supreme State Council also approved a 2002 union budget worth about $105 million, half of which will be provided by Russia, with most of the rest coming from reimbursed loans. By way of comparison, Russia’s federal budget this year provides less than $1 million for the support of small businesses (this will rise next year to bit more than $4 million). Meanwhile, the Audit Chamber, the state agency that monitors federal spending, issued a report detailing how Russia-Belarus Union bureaucrats misused approximately $6 million in union funds during 2000-2001, including some $2 million improbably earmarked for the development of a diesel car.

A number of people both in Russia and Belarus, of course, oppose unification: Leonid Zlotnikov of the Belarus Union of Entrepreneurs and Employers told the Moscow Times that last week’s Putin-Lukashenka meeting represented “the integration of two autocratic regimes, the integration of bureaucracy and not the integration of people.” However, Pavel Borodin, the Russian-Belarus Union’s state secretary and former Kremlin property manager, brushed aside such criticism. “I’ve known Lukashenka since 1995,” said Borodin, who was convicted in Switzerland last month of money laundering, in an interview with the newspaper Izvestia. “Since that time I’ve attended all elections held in Belarus. Who is making a fuss? Those who have been paid to do so. When I visit Belarus, I go to cities and villages. Unlike in Russia, there are few farms with broken windows there, and the streets are clean.” Borodin did not say whether Belarus’ trains run on time.

Unlike Borodin, Putin sought to dampen expectations that a full-blown union is imminent, telling the Supreme State Council that the two states had a long way to go in harmonizing their respective laws and economies. The council, however, was undeterred, announcing that a draft union constitution would be produced by the year’s end. It also announced a competition for a union anthem, with a prize of 500,000 rubles (some $16,000) for the winner. Meanwhile, Russian Defense Minister Sergei Ivanov flew to Minsk for meeting with his Belarusian counterpart, Leonid Maltsev, and with Lukashenka. Ivanov declared the main task for defense cooperation in the near term as “the creation of joint armed forces.”