Belarus shuns Moscow amid loan row

"No future with Russia," president says after talks over terms for $500m loan fail.

    Alexander Lukashenko, right, has been a long-term ally of Russia [AFP]

    Alexei Kudrin, Russia's foreign minister, on Thursday described Belarus' planned economy and stiff control of its currency as a "meaningless policy" and said the country was taking a "parasitic" attitude towards Russia.

    Growing tension

    The exchange reflects growing tension between the two neighbours and long-term allies.

    Belarus' Soviet-style economy has been propped up in part by cheap Russian gas and oil and Lukashenko has called for his country to reunite with Russia.

    It secured the $2bn loan from Russia last year as well as a deal for Russian gas at a lower price than that paid by other former Soviet republics.

    But in recent years, the two countries have clashed over the fees Russia pays to Belarus for the transport of Russian oil to Europe.

    The Kremlin is also impatient with Lukashenko's resistance to Russian attempts to take control of key industrial assets.

    Russia had also been expecting Belarus to quickly follow its example in recognising Georgia's breakaway provinces of South Ossetia and Abkhazia as independent nations, which Russia did following its war with Georgia last summer.

    With the global financial crisis pinching Belarus' economy, Lukashenko has looked to improve ties with the United States and the European Union as his country sought loans from international lenders, other than Russia.

    Kudrin, who was accompanying Vladimir Putin, Russia's prime minister, on a trip to Minsk, the Belarusian capital, on Thursday also warned that the Belarusian government might go bankrupt this year or next.

    Lukashenko accused Kudrin of sowing panic in Belarus.

    SOURCE: Agencies


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