MOSCOW -- The presidents of Russia and Belarus said yesterday that they intend to begin unifying their currencies and much of their economies next year, an action stopping just short of a political merger that would again extend Russian territory to the border of Poland.
Whether such a military or political union could occur later was left unclear. Belarus President Alexander Lukashenko, a fervent proponent of merging his nation into Russia, said he now hoped that the two countries would enter the next millennium as one.
But Russian officials were cooler, with Foreign Minister Igor Ivanov calling the agreement "a declaration, not a treaty." The accord itself specifies that Belarus and Russia would remain "sovereign and equal members of the international community."
Russian President Boris N. Yeltsin said he and Lukashenko had "raised the issue of uniting our countries into a union state," and added, "One can be proud of such work."
Whatever its details, the announcement is a victory for Lukashenko, a charismatic dictator who dreams of someday returning both Belarus and Russia to socialism -- and, many say, of ruling them both.
The authoritarian Lukashenko, who has been widely criticized in the West for his crack-down on the opposition and the independent media, has pushed for uniting his nation of 10 million people with Russia's 147 million people since he became president in 1994. There was talk last year of an agreement for full integration, but in the end only a watered-down version was approved.
Lukashenko had been thwarted by pro-Western officials in Yeltsin's government, such as the economic adviser Anatoly Chubais, who saw Lukashenko as a threat to capitalist-style reforms.
Chubais and his allies vanished with the collapse of Russian economic reforms in August. The man now in power -- Prime Minister Yevgeny M. Primakov -- was one of the leading advocates of unification with Belarus in his previous job as Yeltsin's foreign minister.
Yeltsin's spokesman went out of his way yesterday to stress that nobody on the Russian side of the talks is considering merging the two nations, armies or even their budgets. Still, the greatest obstacle to economic unification may well come from Washington, where both the White House and the International Monetary Fund may view such a merger with intense skepticism.
Although the State Department declined to comment, the U.S. government has opposed greater unity between Russia and Belarus, in large part because most of the young democracies in Eastern Europe continue to fear Russia.
Tiny Belarus is barely the size of Kansas and rarely makes headlines. But it occupies a crucial geographic spot in Europe, squarely between western Russia and Poland. It was such a vicious battleground between Germany and the Soviet Union during World War II that fighting there killed one of every four citizens.
The International Monetary Fund is essentially a proxy for the United States, which plays the dominant role in deciding how much and whether to lend to troubled economies. The IMF is considering whether to proceed with a multibillion-dollar bailout of the Russian government that Primakov's advisers see as crucial to Russia's stability.
While U.S. influence will weigh heavily, the IMF would be likely to question an economic merger with Belarus in any case. By most measures, Belarus is more destitute and far less interested in capitalist remedies to its problems than Russia, and unification could saddle Russia's bankrupt government with the problems of another 10 million poor people.
There is a third, more remote concern: that with a foot in the Russian door, Lukashenko may employ his nationalistic charm to become a serious political force and a powerful enemy of the West. Asked yesterday whether the proposed agreement would allow Lukashenko to run for president of Russia, Yeltsin's spokesman said only that the answer is in the documents that were signed.
The accord signed yesterday proposes that officials draft plans by next spring to unify the Russian and Belarus rubles, to enact identical customs regulations, to agree on measures to protect domestic industries from foreign competition and to standardize regulation of monopolies such as electricity companies.
Among other plans, the nations also propose to standardize their labor and securities laws and grant citizens equal access to educational facilities. A new elected body would oversee these steps.
The accord's fate is in the hands of the nations' parliaments and voters, who are to consider the measures in a referendum next summer. Politically, however, those hurdles are low.
Russia's Communist-dominated parliament is anxious to rebuild the old Soviet empire, and the country's fall from superpower status has brought to the surface a strong nationalistic streak among many voters. That has increased with the expansion of NATO to Eastern Europe and with Russian resentments about its economic tumult.
In Belarus, Lukashenko installed his hand-picked Parliament and rewrote the constitution in 1996 through a voter referendum that international observers agree was rigged.
A leading expert on Russia, Dimitri Simes, president of the Nixon Center for Peace and Freedom, in Washington, said in an interview yesterday that some form of integration between Russia and Belarus is probably inevitable, because Russia has frequently ruled much of the country in recent centuries.
He suggested, however, that yesterday's announcement was a deliberate signal to other nations -- especially the United States -- that Russia can play a transforming role in international affairs.
"Politically, it would be very popular if you want to demonstrate to the people that Russia is still a serious power, and do it on the cheap," Simes said. "Internationally, the notion that the Russian army, weak as it is, might be going to be on the Polish border will get a lot of attention."
Pub Date: 12/26/98