As Crisis Saps Economy, Belarus Replaces Premier

http://www.nytimes.com/2014/12/28/world/europe/as-crisis-saps-economy-belarus-replaces-premier.html

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MOSCOW — President Aleksandr G. Lukashenko of Belarus dismissed his prime minister and the head of the country’s central bank on Saturday as part of a sweeping and unexpected government reorganization.

The reorganization was announced in a statement posted on the website of the presidential administration, but it offered no official explanation. Mr. Lukashenko’s chief of staff, Andrei V. Kobyakov, who had run the presidential administration since 2010, was named the new prime minister, replacing Mikhail Myasnikovich. Pavel Kallaur, one of the central bank’s deputy chairmen, was named its head.

The changes by Mr. Lukashenko, often called “the last dictator in Europe,” seemed to reflect the mounting challenges for Belarus, caught in the middle of the soured relationship between Russia and the West.

The economy of Belarus is heavily reliant on Russia, and its currency, the Belarussian ruble, has tumbled along with the Russian ruble in a crisis set off by lower oil prices and by Western sanctions over President Vladimir V. Putin’s policies in Ukraine.

In recent weeks, Belarus has been the most aggressive of any former Soviet republic in trying to fence off its economy from the problems in Russia, in part by imposing capital controls that include hefty fees on foreign currency purchases.

Currencies throughout the former Soviet Union, including those in Kazakhstan, Georgia and Armenia, have come under pressure as a result of Russia’s problems.

And on Thursday, Mr. Lukashenko demanded that Russia settle all transactions with Belarus in dollars or euros.

“We should have long ago demanded Russia pay us also in hard currency,” the official government news agency, Belta, quoted Mr. Lukashenko as saying.

Mr. Lukashenko is a strongman and former collective-farm boss who has been in office since 1994, and Belarus is generally ruled by his whim, backed up by occasionally heavy-handed use of the country’s security services.

He was widely accused of rigging the presidential elections that he won in 2006 and 2010. He faces re-election again next year.

In remarks quoted on Belta, Prime Minister Kobyakov said the new government would focus on addressing the financial challenges. “We should secure the progressive development of the Belarussian economy in order to prevent living standards of our people from worsening,” he said.

The new prime minister added: “The tasks that the Belarussian economy faces are obvious. The situation in the world is complicated, while, unfortunately, our economy depends a lot on foreign markets.”

Before becoming chief of staff, Mr. Kobyakov, 53, had served as ambassador to Russia.

While Mr. Lukashenko had long been ostracized by the West because of his erratic nature and apparent disregard for human rights and civil liberties, his country has emerged in recent months as a useful neutral ground amid the ongoing conflict in Ukraine.

Minsk, the capital of Belarus, has served as the meeting place for negotiators seeking to forge a settlement among Russia, separatist leaders from eastern Ukraine and the Ukrainian government in Kiev.

Mr. Lukashenko, like other leaders of former Soviet republics, seemed to be unnerved by Russia’s invasion and annexation of Crimea last spring, which suggested Mr. Putin’s possible expansionist aspirations.

Since then, Mr. Lukashenko’s relationship with Moscow has grown more tense. In recent months, as Russia barred the import of many European goods in retaliation for Western sanctions, some Russian officials accused Belarus of capitalizing on the dispute and repackaging European products for resale as if they were Belarussian.