TATAR PROTEST TURNS VIOLENT IN CRIMEA. Several thousand Tatars clashed with police in the Crimean capital of Simferopol on 24 March, Interfax reported. The Tatars began their protest in the central Lenin square and then blocked railway tracks and a key highway after the Ukrainian parliament took no action on their request for suffrage rights. Police then intervened. Eight policemen were hospitalized and an unspecified number of Tatars were also injured in the confrontation. The protest ended when Tatar leader Refat Churbarov announced he had reached an agreement with President Leonid Kuchma's office to discuss the issue. Several hundred thousand Tatars have returned to the Crimea from Central Asia since 1991 but many have not been granted Ukrainian citizenship and therefore cannot vote in the 29 March elections. Crimean Tatar leaders fear that as a result, they will not be properly represented in the local, regional, or national legislatures. PB
TWO POLITICIANS SHOT IN RUNUP TO UKRAINIAN ELECTIONS. Two candidates for the Ukrainian parliament were injured in separate attacks on 24 March, Reuters reported. Vasyl Koryak, mayor of the central city of Lubny, was seriously injured when his car was attacked by gunmen. Koryak, a member of the United Social Democratic party, is running for a seat in the national parliament. In the Black Sea port of Sevastopol, Vasyl Kalytyuk, a top official in the Crimean branch of the Social Democrats, was also shot at while driving his car. He suffered light injuries. PB
UKRAINIAN PRESIDENT ON REFORMISTS' ELECTION PROSPECTS. Leonid Kuchma said on 24 March that the outlook for proreform parties in the 29 March parliamentary elections is "gloomy," ITARTASS reported. Kuchma, who is in Sofia for a two-day visit, fears that many Ukrainians are apathetic about the vote, which, he says, can only benefit the Communists and other parties on the Left. Kuchma said a return to Communist-era socialism is "comparable to attempts to get sick again." The Communist Party, which holds the largest number of seats in the parliament, tops all opinion polls. PB
UKRAINIAN PRESIDENT IN BULGARIA. Visiting Ukrainian President Leonid Kuchma and his Bulgarian counterpart, Petar Stoyanov, signed several agreements on 24 March, including a declaration on a "strategic partnership" for strengthening political and economic ties, RFE/RL's Sofia bureau reported. Kuchma also met with Prime Minister Ivan Kostov. He said it is "sad" that trade turnover between the two states totals only some $300 million but noted that prospects have improved since the pro- reform government came to power in Bulgaria. MS
Last year, the Belarusian government claimed the highest rate of economic growth in Europe--some 10 percent of GDP. That growth had nothing to do with genuine, market-economy factors such as job creation, increased investments, and price liberalization. Rather, it was artificially stimulated by Soviet-era methods of a command economy.
State control over the Belarusian economy is virtually total. The private sector's share in industry is less than 1 percent and in trade and services 4 percent. Under President Alyaksandr Lukashenka, private business is subject to constant regulation and steep taxation. Foreign investments in 1997 totaled only $40 million, and the per capita figure was 10 times lower than in the neighboring Baltic states or Poland. And while the employment situation looks deceptively good (official unemployment figure stands at 2.8 percent), many people without work choose not to register as unemployed, engaging instead in private commerce or trade.
One of the reasons for the "Belarusian economic miracle" is the high level of Russian indirect subsidies. In March 1996, Russian President Boris Yeltsin and Lukashenka signed an agreement on the "satisfaction of mutual claims of Belarus and Russia.". Under that agreement, Belarusian debts for Russian gas supplies totaling $1.3 billion (or 6.5 percent of Belarusian GDP) are converted into long-term credits. Moreover, Belarus imported Russian oil and gas at prices lower than those on world markets. Whereas Lithuania and Ukraine, for example, pay $80 per 1,000 cubic meters, Belarus pays only $50. Paying lower prices for energy resources results in indirect Russian subsidies totaling some $400-450 million a year.
In addition, Belarus pays for some Russian goods by means of barter. Prices for bartered Belarusian goods are fixed at high or even worldmarket levels. For example, Russia imported sugar from Belarus in 1997 at a price of $513 per ton and from other countries at $307-320. Similar price differences exist for Russian imports of Belarusian butter, synthetic fibers, and other goods.
Taking into account all forms of indirect Russian subsidies, Andrei Illarionov, former economic adviser to Yeltsin, concluded that those subsidies were equal to $1.52 billion in 1997. By comparison, the Belarusian state budget is only $3.5 billion.
Another reason for the "Belarusian economic miracle" is the depletion of the country's national assets. Minsk inherited a large amount of arms from the former USSR, which are now being sold off. In 1996, armaments sales generated more than $400 million, and last year, Belarus gained a place on the list of the top 10 arms exporting countries in the world.
Statistical data show that the total savings of the population are decreasing at a rate of $180-200 million a year. And last year, current assets of Belarusian enterprises decreased by 10 percent. With inflation rising, all enterprises were prohibited from increasing their prices by more than 2 percent a month.
Last year witnessed an increase of production volumes at a large number of unprofitable enterprises. If capital turnover and inflation are taken into account, the share of unprofitable enterprises in Belarus is approximately the same as in Russia --47-50 percent. In Belarus, those companies were simply ordered to produce more and export (mainly to Russia) at prices below production costs.
A final reason for Belarus's economic growth is protectionism. High import duties imposed within the framework of the Russia-Belarus customs union make certain Belarusian manufactured goods competitive on the Russian market. For example, Russian import of car tires from Belarus for the first nine months of1997 increased 2.6 times over the same period last year, while the production volume of Belarusian television sets increased by 60 percent and their export to Russia by 27.3 percent. Such trends are taking place at the expense of per capita consumption by the Belarusian population..
Thus rather than introducing genuine reforms, the Belarusian government artificially stimulates its economy by relying on Russian subsidies, the depletion of the nation's wealth, and trade protectionism. It also engages in increased deficit spending. The total budget deficit (including soft credits) was equal to 4.9 percent of GDP. That deficit is financed by credits from the Belarusian National Bank. Such soft-credit monetary policy leads to high inflation and to a redistribution of resources in favor of unprofitable enterprises.