US official sees looming crisis for Belarus economy :: Charter'97 :: News

A senior U.S. official said on Tuesday Belarus needed to loosen state control of the economy to avert a possible crisis in the impoverished former Soviet state. President Alexander Lukashenko, isolated by the West for resisting reforms, is hostile to foreign investment and fears losing some power if he changes the Soviet-style economy, said the State Department official, who asked not to be named. But low productivity, a need to print money to pay state salaries and signs its key importer, Russia, is demanding higher quality goods, may force Belarus to become more market-oriented, he told reporters.

"I don`t get the sense that the place is about to explode but certainly pressures are there that could lead to a really severe economic crisis," the official said. "At this particular time they are closing their eyes and hoping something will develop that will ease their path."

The United States works with Belarus over frontier security aiming to catch anti-American militants using the country as a transit route into Europe. Washington is also constantly concerned about Belarus` sales of ammunition and other conventional military goods, such as night-vision goggles, that have been exported to places like Iran, Libya and Sudan, the official said.

Analysts have said the Belarussian economy is on the verge of a crisis with nearly 70 percent of goods never reaching customers and stocked in warehouses. "They will have to find a way to adjust (the economic system). But it as much a political as an economic issue," the official said.