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. Last Updated: 07/27/2016

Lukashenko Names Mixed Cabinet

INSK, Belarus -- Belarussian President Alexander Lukashenko presented a mixed government team of conservatives and market advocates on Thursday and warned that tough measures lay ahead to lift the economy out of crisis.

Lukashenko, elected by a landslide on pledges to root out corruption, also won parliamentary approval for Mikhail Chigir as prime minister. Deputies voted 266 to three to approve Chigir, a former banker who has promised market reforms. Two of the new prime ministers' four deputies are conservatives, however. His team also includes new foreign, defense and interior ministers.

"We must not make a hash of this. We must be consistent. We must retain overall control. We must keep capable people in office," Lukashenko told deputies in a 30-minute nationally televised address, his first major pronouncement on policy since being inaugurated Wednesday. "I want to offset the views of committed market reformers ... with conservatives."

Lukashenko said Belarus, a nation of 10 million between Russia and Poland, had to knock down "fences" in its foreign policy and move closer to Moscow and other former Soviet republics.

On the economy, Lukashenko said that the former Soviet republic was balanced on the brink of disaster and called for an abrupt halt to spendthrift policies of subsidizing bloated industry.

He said he would curtail new central bank emissions and cut back on state subsidies, obliging factories and able-bodied consumers to pay their own way.

He added, however, that help would be given to pensioners and others suffering most from more than two years of economic collapse. National income, a Soviet-style term indicating economic performance, was down 34 percent from last year, he said.

"The situation is approaching a catastrophe. The very survival of the nation is at stake," he said.

"Introducing tough measures is the only way forward. Factories won't be given directions from above. We need civilized economic direction, meaning support for successful businesses."

Privatization, he said, was "not an aim in itself" and would be limited to sectors better run outside state hands. In his acceptance speech as premier, Chigir warned he would tolerate no unwarranted state expenditure.

"Our path is a market-oriented one. But the market does not necessarily mean doing exactly as one wants," he said. "There will be state control, tough state control. If we keep opening the state's coffers ever wider, we will never stop inflation."

But Chigir cast doubt on a proposed monetary union with Russia, which officials in both countries had sought to complete by next month to introduce Russia's ruble in Belarus.

He ruled out any proposal that would "hurt the principles of statehood" -- an oblique reference to Russian insistence that Belarussian budgetary and monetary policy would be totally subordinate to Moscow.

But Lukashenko said it was "absolutely vital" for Belarus to forge closer relations with its ex-Soviet neighbors.

"We will reorient our policy from construction of sovereign fences to open cooperation with the world community," he said.

Lukashenko captured 80 percent of the vote after pledges to dismantle "mafia clans," roll back price rises and halt privatization. Since his election, he has admitted that the state's treasury is empty and said there was no alternative to moving toward market reforms.