Geography of Belarus
Area: 207,600 sq. km. (80,100 sq. mi.); slightly smaller than Kansas.
Cities: Capital--Minsk.
Terrain: Landlocked, low-lying with thick forests, flat marshes and fields.
Climate: Cold winters, cool and moist summers, transitional between continental and maritime.

People of Belarus
Nationality: Noun--Belarusian(s). Adjective--Belarusian.
Population (Jan. 2008 est.): 9,689,700 (Urban 73%; rural 27%).
Population decline (2007 est.): -0.30%.
Ethnic groups (1999 census): Belarusian (81.2%), Russian (11.4%), Polish (3.9%), Ukrainian (2.4%), Jewish (0.3%), other (0.8%).
Religions (2004 est.): Eastern Orthodox 80%, Catholic 14%, Protestant 2%, other (including Autocephalous Orthodox, Jewish, Muslim, and Krishna) 4%.
Languages: Belarusian and Russian (official).
Education: Literacy--99.6%.
Health: Infant mortality rate (2007 est.)--6.63/1,000. Life expectancy (2007 est.)--70.05 years (men 64.31 years, women 76.14 years).
Work force (4.3 million as of December 31, 2005): Industry--26.7%; agriculture and forestry--10.6%; construction--7.9%; transportation, communications--7.6%; trade, catering--12.2%; education--10.7%; other--24.3%.

Government of Belarus
Type: Republic.
Constitution: March 30, 1994; revision by unrecognized national referendum of November 24, 1996, gave 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). Judicial--Supreme Court; Constitutional Court.
Administrative subdivisions: Six oblasts (regions) and one municipality.
Political parties: Belarus has 15 registered political parties, including: Agrarian Party (AP); Belarusian Communist Party (KPB); Green Party Belarusian Social and Sports Party; Belarusian Patriotic Movement (BPR); Belarusian Popular Front (BNF); Belarusian Social-Democrat Party (BSDP); Social-Democratic Hramada Party; Conservative Christian Party-BNF; United Civic Party (UCP); Liberal Democratic Party of Belarus (LDBP); Party of Communists Belarusian (PKB); Party of Popular Accord; Republican Party of Labor and Justice (RPPS); Social Democratic Party of Popular Accord (PPA);Several of these parties exist in name only. Other, unregistered parties are also active, such as: Belarusian Christian Democracy, Belarusian Party of Labor, Women's Party Nadezhda, Christian Conservative Party, and Party of Freedom and Progress.
Suffrage: Universal at age 18.

Economy of Belarus
GDP (2006): $36.9 billion.
GDP growth rate (2006): 9.9%.
Per capita GDP (2006): $3,800.
Natural resources: Forest land, peat deposits, potash, small amounts of oil and natural gas.
Agriculture: Products--grain, potatoes, vegetables, flax, beef, milk.
Industry: Types--machinery and transport equipment, chemical products, fabrics, and consumer goods.
Trade (2006): Exports--$19.838 billion (refined petroleum, potash fertilizers, machinery and transport equipment, chemicals, foodstuffs, metals, and textiles). Major markets--Russia, Germany, Netherlands, Poland, Great Britain, Ukraine, and Lithuania. Imports--$22.237 billion (mineral products, machinery and equipment, metals, crude oil and natural gas, chemicals, foodstuffs). Major suppliers--Russia, Germany, Ukraine, Poland, Italy, Lithuania.
Exchange rate (January 2008): 2,150 BYR (Belarusian rubles)=U.S. $1.

HISTORICAL HIGHLIGHTS of Belarus
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 ninth 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 (U.S.S.R.). Suffering devastating population losses under Soviet leader Josif Stalin and the German Nazi occupation, including mass executions of 800,000 Jews, 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 authoritarian Alexander Lukashenko since 1994.

GOVERNMENT of Belarus
The constitution provides for a directly elected president who serves a 5-year term. The bicameral parliament consists of the 64-seat Council of the Republic and the 110-seat House of Representatives. 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 local regional councils elect the rest. The deputies to the House of Representatives are elected directly by the voters. The president appoints the prime minister, who is the head of government.

POLITICAL CONDITIONS of Belarus
Since his election in July 1994 as the country's first President, Alexander Lukashenko has consolidated power steadily in the executive branch through authoritarian means and dominated all branches of government. He used a non-democratic November 1996 referendum to amend the 1994 constitution in order to broaden his powers and illegally extend his term in office; and he began to count his 5-year term in 1996, thereby adding 2 years to his first term in office. In 2004, he engineered a fraudulent referendum that removed term limits on the presidency, and in 2006 took advantage of this provision to "win" another term in an undemocratic election. In January 2007, Lukashenko further consolidated his rule through local elections that failed to meet international standards.

In October 2000, parliamentary elections occurred for the first time since the disputed referendum of 1996. According to the Organization for Security and Cooperation in Europe's Office for Democratic Institutions and Human Rights (OSCE/ODIHR), these elections failed to meet international democratic standards. Based on the unrecognized 1996 constitution, Lukashenko announced presidential elections in 2001. International monitors noted sweeping human rights violations and undemocratic 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. March 2003 local elections and October 2004 parliamentary elections also failed to meet international standards of freedom and fairness. In 2004, Lukashenko called a referendum on removing presidential term limits. According to official results, the referendum passed by a wide margin, and Lukashenko allies won across-the-board victories in simultaneous parliamentary elections. OSCE/ODIHR observers declared that the parliamentary elections fell far short of international standards, citing abuses in the campaign period and the vote counting. The referendum was also conducted with little regard for democratic principles. Independent exit polling showed results far different from those officially announced.

The March 19, 2006 presidential election marked another low point in the government's treatment of its own citizens. OSCE/ODIHR observers noted that the election failed to meet international standards, and was characterized by a disregard for the basic rights of freedom of assembly, association, and expression, as well as by a climate of insecurity and fear and a highly problematic vote count. Authorities detained many opposition supporters and civic activists during the campaign, charging some with offenses that could lead to long prison sentences. The regime limited the free flow of information by controlling nearly all media outlets and arresting many opposition activists for passing out legal campaign materials. The government detained hundreds in connection with demonstrations in the week following the election, stormed a demonstrators' tent camp in Minsk, and used force against demonstrators. One opposition presidential candidate, Aleksandr Kozulin, was beaten and detained repeatedly by authorities, ultimately sentenced to five and a half years in prison for "hooliganism." Kozulin held a 54-day hunger strike in protest of the rule of Lukashenko, only ending the protest after the United States brought up his plight in the UN Security Council in December 2006. Many aides and supporters of Aleksandr Milinkevich, the presidential candidate of a coalition representing most opposition forces, also suffered from detentions, beatings, harassment, and prosecution. The regime's harassment and arrests of opposition politicians and youth leaders continued throughout 2007.

Although government restrictions on basic freedoms spiked in connection with elections, they continued even in non-election periods. Efforts to further infringe upon press freedoms included the continued use of libel laws, restrictions on foreign funding, pressure on businesses not to advertise with independent media, limitations on access to newsprint and printing presses, prohibiting access to state distribution networks, censorship, restrictions on the import of media-related materials, temporary and permanent suspension of independent and opposition periodicals, confiscation in quantity of printed publications, and detention of those distributing such material. In December 2004, the government adopted new legislation establishing criminal penalties for "discrediting Belarus" and organizing activities of an unregistered non-governmental organization (NGO). The government has continued to make use of its monopoly on television broadcasting to present biased news coverage and to minimize the presentation of opposing points of view. All Internet service providers in Belarus operate through a state-controlled portal. Despite constitutional provisions, a 1998 government decree limited citizens' rights to express their own opinions. The 1994 and 1996 constitutions both provide for freedom of peaceful assembly; however, the regime severely restricts this right in practice. Demonstrations require 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. Applications by opposition groups are usually rejected. Following many unsanctioned demonstrations, police and other security officials detain, harass, and beat demonstration participants.

The constitution provides for freedom of religion; however, the authorities restrict this right in practice. Although Article 16 of the 1996 amended constitution reaffirms the equality of religions and denominations before the law, it also contains restrictive language stipulating 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."

The government also restricts religious freedom in accordance with the provisions of a 2002 law on religion and a 2003 concordat with the Belarusian Orthodox Church (BOC), a branch of the Russian Orthodox Church (ROC) and the only officially recognized Orthodox denomination. Although there is no state religion, the concordat grants the BOC privileged status. Protestants in particular have attracted negative attention. Numerous anti-Semitic acts and attacks on religious monuments, buildings, and cemeteries have occurred with little discernable response from the government. Authorities have kept many religious communities waiting as long as several years for decisions about property registration or restitution. Authorities also harassed and fined members of certain religious groups, especially those that the authorities appeared to regard as bearers of foreign cultural influence or as having a political agenda. Foreign missionaries, clergy, and humanitarian workers affiliated with churches have faced many government-imposed obstacles, including deportation and visa refusal or cancellation.

On December 17, 2007, President Lukashenko abolished exit stamps in favor of a computerized system that verifies the validity of passports. At the same time, however, he authorized the Interior Ministry to ban travel by individuals who had access to state secrets, were facing criminal prosecution or civil suits, and persons with outstanding financial commitments.

In late December 2007, authorities included opposition party leader Anatoliy Lebedko on the travel ban list because he faced allegations of libel against government officials. Authorities also banned travel by opposition youth leader Aleksandr Atroshchenkov. Human-rights observers feared that additional opposition activists would likely be included on the government's travel ban list, which will include the names of an estimated 100,000 persons.

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 (FTUB) was established in 1991 and registered in 1992. Following the 1995 Minsk metro workers strike, the President suspended its activities. In 1996 FTUB leaders formed a new umbrella organization, the Belarusian Congress of Democratic Trade Unions (BCDTU), which encompasses four leading independent trade unions and is reported to have about 15,000 members. In late 2003, the BCDTU became a member of the International Confederation of Free Trade Unions (ICFTU).

In May 2001, a complaint was lodged with the International Labor Organization (ILO) by several trade union organizations alleging the government was attempting to destroy the independent unions. A trade union campaign was carried out to raise international awareness and put pressure on the Belarus Government. Late in 2001, the regime attempted to further restrict the unions by refusing to turn over dues paid by members. Once it became clear that the unions and the FTUB were adjusting to this change, the government in June of 2002 embarked on a takeover of the FTUB and several of its branch unions. The FTUB subsequently became an arm of the government, and the election of Leonid Kozik to the position of Chairman of the FTUB has been challenged by the ILO.

On November 2003, the ILO approved the establishment of a Commission of Inquiry to investigate alleged serious violations of workers' rights in the country. That same month the Ministry of the Economy informed the ILO that all activities related to its technical assistance project to labor unions must cease, because the registration of the project was denied. In 2004, the ILO presented the government with a list of 12 recommendations to improve its treatment of independent unions. A January 2006 ILO mission found the government had not implemented any of these recommendations. As a result, in June 2007, the European Union (EU) suspended Belarus' trading preferences under the Generalized System of Preferences (GSP). The United States had suspended GSP preferences in 2000 due to Belarus' failure to take steps that would allow the right of association and collective bargaining.

In March 2004 the government began forcing state employees (some 80% of Belarusian workers) to sign short-term work contracts. Although contracts may be concluded for a period of 5 years, most expire after one year--essentially granting the government the opportunity to annually fire anyone in its employ. Many members of independent unions, political parties, and civil society groups have lost their jobs when their contracts were not renewed.

The State Department's report on human rights practices in Belarus is located at http://www.state.gov/g/drl/rls/hrrpt/2006/78802.htm

Principal Government Officials
President--Alexander Lukashenko
Prime Minister--Sergei Sidorsky
Foreign Minister--Sergei Martynov
Ambassador to the U.S.--Mikhail Khvostov
Ambassador to the UN--Andrei Dapkunis

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

ECONOMY of Belarus
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 development of entrepreneurship, Belarus under Lukashenko has greatly slowed, and in many cases reversed, 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. The government has also renationalized companies using the "Golden Share" mechanism--which allows government control in all companies with foreign investment--and through other administrative means.

Economic output, which declined for several years, revived in the late 1990s and early 2000s, but the economy has been dependent on heavy discounts in oil and natural gas prices from Russia. Belarus has historically re-exported the oil and oil products at world market prices, using the windfall profits to subsidize state enterprises. In December 2006, Belarus and Russian gas giant Gazprom signed a deal which will eventually end Russia's subsidies of gas for Belarus. Under the deal, Gazprom raised prices for Belarus gas deliveries in 2007 to $100 per 1,000 cubic meters--a significant rise from the subsidized previous price of $46, but still far less than the price paid by EU member states. The price for Russian gas will continue to increase incrementally until it equals the price paid by EU members in 2011. Additionally, Gazprom will gradually acquire a 50% stake in Beltransgaz, the Belarusian gas pipeline firm. In January 2007, Russia followed up with a steep duty on oil deliveries, which caused a significant drop in revenue from exports of oil products and Russian-sourced crude oil. The increase in gas prices and simultaneous moves by Moscow to reduce the profitability of refining Russian oil in Belarus for re-export disrupted plans to upgrade industries ranging from oil refining to cement production.

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, sugar beets, 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, earthmovers 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, Germany, Ukraine, and Poland.

The massive April 26, 1986 nuclear accident 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. Many living in Chernobyl afflicted zones have infrequent access to medical treatment due to remoteness, inadequate equipment, and substantial costs. Although the Belarusian Government claims otherwise, many radiation monitoring stations, especially in rural areas, are either ill-equipped, poorly staffed, and/or no longer in operation. Resettlement of those in affected areas remains incomplete.

Due to the economic and political climate, little new foreign investment has occurred in recent years. In 2002, two major companies, the Swedish furniture firm Ikea and Russian beer producer Baltika, ended operations in Belarus due to unrealized government commitments or unwelcome interference. Ford Motors did the same in 1999. Economic pressures in 2007 may have led to the unexpected and non-transparent sale of a state telecommunications company to an Austrian firm.

Growth in 2007 continued to be robust. Consumer price inflation averaged about 8.3% in 2007, but higher energy import prices are expected to drive up inflation in 2008 and subsequent years. Large wage increases, which were typical in the 1990s and early 2000s, fueled some increased consumption but also made Belarusian firms less competitive. Close to 20% of enterprises and a majority of collective farms currently operate at a loss, a level that has persisted since 2002. The government made progress in reining in its fiscal policies, largely due to constraints imposed by financial difficulties caused by the earlier economic slowdown. Belarus continues to be heavily dependent on Russia, with the potential for greater economic dependency in a long-proposed EU-style union between the two states. Prospects for an eventual union state remain weak, however, largely due to the apparent lack of interest on the part of the leadership of both countries. However, Russia, Belarus, and Kazakhstan have announced plans to move ahead with the formation of a customs union in 2008.

The World Bank announced a new 4-year country assistance strategy for Belarus in December 2007, focusing on global environment and energy challenges, enhancing the competitiveness of its economy to assure rising incomes, and protecting the welfare of the most vulnerable. As part of the strategy the World Bank is financing improvements to schools, hospitals, and homes for orphans, the elderly, and the disabled throughout Belarus, with particular emphasis on improving the energy efficiency of those facilities. In 2004, Belarus rejected a World Bank loan to help fight AIDS and tuberculosis. International Monetary Fund (IMF) cooperation is currently limited to policy and technical consultations.

Environmental Issues
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 in 1986 at the Chernobyl nuclear power plant. About 70% of the nuclear fallout from the plant landed on Belarusian territory, and about 20% of the land remains contaminated. But government restrictions on residence and use of contaminated land are not strictly enforced, and the government announced plans in 2004 to increase agricultural production in the contaminated regions. The government receives U.S. assistance in its efforts to deal with the consequences of the radiation. Belarus also faces growing air, land, and water pollution levels from potash mining in the south of the country.

DEFENSE AND MILITARY ISSUES of Belarus
The United States continues to support Belarus' adherence to arms control agreements and treaties into which it has previously entered, including the Open Skies Treaty which Belarus ratified in 2001. Cooperation in all such agreements has been exemplary.

Humanitarian aid continues to be the primary engagement between the U.S. military and Belarus. Humanitarian assistance programs have provided a tangible, long-lasting service and have encouraged goodwill toward the U.S. Government and the U.S. military. Renovation of the Gomel Emergency Treatment Hospital was recently concluded. The hospital received more than $600,000 in humanitarian assistance, which included funds for general renovation and the establishment of its blood transfusion center. The humanitarian aid program has two principal elements. The Humanitarian Assistance Program-Excess Property donates non-lethal goods and technical assistance for humanitarian purposes. Other assistance focuses on projects such as the refurbishment of medical facilities and the construction of school buildings.

Direct military to military cooperation continues to be minimal. Belarus currently has no International Military Education and Training (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.

Belarus is currently cooperating with the North Atlantic Treaty Organization, through the Partnership for Peace Trust Fund, to destroy a total of 700,000 conventional landmines. Belarus also has a stockpile of over 3 million non-conventional anti-personnel mines, which it has pledged to destroy by March 2008. In addition, there are numerous World War II-vintage minefields, which are still in place and kill or injure several Belarusians every year.

The Ministry 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.

There have been numerous reports of Belarusian sales or delivery of weapons or weapons-related technologies to states of concern, including state sponsors of terrorism. In April and September 2004, the United States imposed sanctions on a Belarusian entity, Belvneshpromservice, pursuant to the Iran Nonproliferation Act of 2000 for the transfer to Iran of items on a multilateral export control list or items having the potential of making a material contribution to weapons of mass destruction (WMD) or cruise or ballistic missile systems.

FOREIGN RELATIONS of Belarus
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), the North Atlantic Treaty Organization's (NATO) 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 Community, 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 technical assistance 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. The EU did not recognize the 1996 constitution, which replaced the 1994 constitution. Neither the PCA nor its trade-related elements were implemented, and Belarus was not invited to join the EU's Neighborhood Policy. 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. In 1998, relations were further worsened when President Lukashenko evicted several western ambassadors from their homes in the Drozdy area of Minsk. In 2004, the Council of Europe adopted a report written by special rapporteur Christos Pourgourides calling on Belarusian authorities to suspend various high-level officials in conducting a thorough investigation of the cases of several prominent Belarusian political figures who have disappeared and remain unaccounted for. In parallel with the U.S., the EU spoke out strongly about the government's conduct of the 2006 election, noting that additional restrictive measures would be imposed against those officials responsible for abuses. After the election, the U.S. and EU imposed travel restrictions and financial sanctions against those responsible for abuses. The EU also launched a two-year, 2 million Euro project to support Belarusian access to independent information, also in complement to U.S. assistance programs. In June 2007, the EU announced the withdrawal of GSP trade preferences for Belarus, following an assessment by the International Labor Organization that Belarus had not acted to ensure the protection of labor rights and freedom of association.

Acknowledging the lack of progress in relation to bilateral relations and the internal situation following the position adopted in 1997, the EU adopted a benchmark approach in 1999, whereby relations would be gradually improved 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 Advisory and Monitoring Group (AMG) were observed but were not sufficient in the realm of access to fair and free elections. The Belarusian Government, objecting to the OSCE AMG's activities, forced its shutdown by failing to renew visas or extend accreditation of professional staff. The Belarus Government agreed to a successor OSCE presence after 14 EU member countries and the U.S. imposed visa restrictions on the travel of high-ranking Belarusian officials. The OSCE Office in Minsk formally came into existence on January 1, 2003 with a mandate to "assist the Belarusian Government in further promoting institution-building, in further consolidating the Rule of Law and in developing relations with civil society, in accordance with OSCE principles and commitments."

Russia is the largest partner for Belarus in the economic and political fields. In terms of trade, over one-third 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, subsidized energy, and components. The 2007 steep increase in the price of natural gas and higher tariffs on Russian-sourced oil and oil products have contributed to a crisis in the Belarusian economy, forcing the regime to cut popular subsidies and to borrow from outside sources to finance the budget. Belarus received a $1.5 billion stabilization loan from Russia in late 2007, and has asked for another loan in 2008.

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 two 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. However, Belarus has repeatedly pushed back the date for implementing a monetary union. A dispute with Russia in late 2006 and early 2007 over gas prices and oil import duties raised further doubts about the future of the union, and many of the provisions of the union have yet to be implemented.

U.S.-BELARUSIAN RELATIONS
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. Michael G. Kozak served as U.S. Ambassador from October 2000 to August 2003. George A. Krol served as U.S. Ambassador from September 2003 to July 2006. Karen Brevard Stewart replaced Ambassador Krol as U.S. Ambassador and arrived in Belarus on September 18, 2006.

The two countries exchanged top-level official visits in the early years of independence. 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 in January 1994. After this high point in relations, however, bilateral relations cooled following the election of President Alexander Lukashenko in July 1994.

In September 1995 three hot air balloons participating in the Coupe Gordon Bennett race entered Belarusian air space. Race organizers had informed the Belarusian Government about the race in May and flight plans had been filed, but nevertheless the Belarusian air force shot down one balloon, killing two American citizens, and forced the other two to land. The crews of the other two balloons were fined for entering Belarus without a visa and released. Belarus to date has not apologized or offered compensation for these killings.

In November 1996, the Lukashenko regime conducted an internationally unrecognized constitutional referendum, which resulted in the dissolution of Belarus' legitimate parliament and the centralization of power in the executive branch. In that same year, the Belarusian authorities provoked a diplomatic crisis by demanding and, in contravention of international law, eventually confiscating diplomatic residences in the Drozdy housing compound, including the U.S. Ambassador's residence. This action led the United States and other countries to withdraw their ambassadors from Belarus until the Belarusian authorities provided compensation and guarantees to respect international law. In addition, Lukashenko used his newly centralized power to repress human rights throughout the country, including persecuting members of the illegally disbanded Belarusian parliament (13th Supreme Soviet) and former members of his own government.

As a result of these events and tendencies, in 1997, the United States announced its decision to pursue a "selective engagement" policy with the Government of Belarus. This policy included downgrading government-to-government contacts to the level of Assistant Secretary and below, and restricting U.S. Government assistance to the Belarusian Government--with some exceptions including humanitarian assistance and exchange programs with state-run educational institutions. At the same time, the U.S. greatly expanded contacts with Belarusian civil society to promote democratization in Belarus.

Since 1997, despite growing U.S. engagement with Belarusian society, official bilateral relations have remained at a low level. In 2003, the United States, in tandem with the European Union, proposed a step-by-step, gradual approach to improve bilateral relations: the United States would respond positively to genuine efforts by Belarusian authorities to improve Belarus' human rights and electoral practices. Belarusian authorities failed to take such steps to warrant a positive response.

In October 2004, the U.S. Congress passed, and the President signed, the Belarus Democracy Act, designed to promote democratization. In signing the act, President Bush noted that the authorities were turning Belarus into "a regime of repression in the heart of Europe," and set out the U.S. policy of working "with our allies and partners to assist those seeking to return Belarus to its rightful place among the Euro-Atlantic community of democracies." After a deeply flawed presidential election in March 2006, the U.S., acting together with the EU, imposed travel restrictions and targeted financial sanctions against Belarusian officials implicated in human rights abuses and election fraud. The financial sanctions prohibited U.S. persons from engaging in financial transactions with named persons. On January 12, 2007, President Bush signed the Belarus Democracy Reauthorization Act, which repeated the call for targeted sanctions against Belarusian officials and continued assistance for democracy building activities. In August 2007, the U.S. widened application of travel restrictions on Belarusians to include directors and deputy directors of state enterprises. In November 2007, the Treasury Department froze the U.S. assets of Belarus' oil and chemical conglomerate, Belneftekhim, based on Alexander Lukashenko's control of the company. To underscore U.S. support for the Belarusian people's democratic aspirations, the President and Secretary of State have frequently met with Belarusian pro-democracy activists, most recently during a visit to Washington, DC, in December 2007 that included leaders of pro-democracy political parties and NGO leaders.

U.S.-Belarusian Economic Relations
The U.S. Government continues to support the development of the private sector in Belarus and its transition to a free market economy. With the advent of the Lukashenko regime, Belarusian authorities have pursued a generally hostile policy toward the private sector and have refused to initiate the basic economic reforms necessary to create a market-based economy. Most of the Belarusian economy remains in government hands. The government, in particular the presidential administration, exercises control over most enterprises in all sectors of the economy. In addition to driving away many major foreign investors--largely through establishment of a "Golden Share" requirement, which allows government control in all companies with foreign investment--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, the U.S. removed Belarus from the Generalized System of Preferences (GSP) in 2000.

The United States has encouraged Belarus to conclude and adhere to agreements with the International Monetary Fund (IMF) on 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. 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 fell 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 IMF Staff-Monitored Program (SMP) in 2001, which ended in September 2001 with relatively disappointing results. In early 2004, Belarus halted negotiations on a follow-on stand-by arrangement due to disagreements with the IMF on macroeconomic policy and claiming that it did not require IMF funding.

Because of the unpredictable and at times hostile environment for investors, 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 U.S. investors in Belarus have left, including the Ford Motor Company.

U.S. Assistance to Belarus
U.S. Government assistance programs in Belarus support and encourage civil society development, access to independent information, pro-democracy forces, and the emergence of democracy in a very difficult and challenging environment. Most assistance is in the form of training and exchanges, as well as small grants and capacity-building for local non-governmental organizations. The U.S. also supports external radio and television broadcasting into Belarus, and external websites. Because the Belarusian authorities have not embraced market reforms, the U.S. is able to program only modest activities in support of private entrepreneurs. The U.S. provides some health program funding and supports international organizations' efforts in Belarus to combat the growing problem of trafficking in persons. With very limited exceptions, including humanitarian assistance and exchange programs involving state-run educational institutions, bilateral assistance is not channeled through the Government of Belarus.

From FY 1992 through FY 1995, the U.S. Government provided more than $455 million in assistance to Belarus, and transferred over $233 million in U.S. Defense Department excess and privately donated humanitarian commodities. Assistance is provided to Belarus under the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act (FSA) enacted in October 1992. 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 Alexander Lukashenko in mid-1994.

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, in February 1997, due to the Belarusian Government's poor record on human rights, President Clinton de-certified Belarus, rendering the country ineligible for further CTR assistance and placing restrictions on other security-related assistance as well. 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.