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. Last Updated: 07/27/2016

Integration Proposal Blasted by All Sides

President Boris Yeltsin's proposal to accelerate unification with Belarus came under fire Tuesday from both sides of the political spectrum, with opposition leaders calling it a ploy and liberals warning that the ultimate victim of integration would be the Russian taxpayer.


The Kremlin announced Monday that Yeltsin had sent a letter to Belarus president Alexander Lukashenko suggesting the two countries hold a referendum on political and economic unification "in one form or another."


Opposition leaders said they generally supported the idea of integration, but disagreed with Yeltsin's proposal. They said the president, in the hospital with pneumonia, was using it as a diversionary tactic.


"The idea itself is sane, but considering the time at which it has been announced it increasingly resembles an attempt to distract the attention of the Russian public from pressing domestic problems once again," ex-Security Council secretary Alexander Lebed told the Interfax news agency.


"The founding documents of the Community of Russia and Belarus were signed a long time ago, but their implementation has remained nil," Lebed added. "Who prevented Boris Yeltsin from carrying out the idea earlier?"


Lebed added that he thought the initiative was a "game" initiated by the Russian president's "inner circle."


Communist leader Gennady Zyuganov also denounced the proposal as politically motivated. "I find the proposal quite strange. Whenever the situation in the country worsens, it is customary to come out with new ideas," he told Interfax.


"We favor the unification of Russia and Belarus, Ukraine and other former Soviet republics," Zyuganov added. "But those who trampled on this idea should have been more energetic in implementing a policy that was at the core of the treaty on the formation of the Community of Russia and Belarus signed on April 2 last year, and this is what has not been done."


Yeltsin's initiative, however, found some supporters, including Sergei Baburin, deputy chairman of the State Duma and leader of the opposition Popular Rule faction, and Yegor Stroyev, speaker of the Federation Council, the parliament's upper house.


Stroyev said integration with Belarus could "provide a strong impetus for integration with the Commonwealth of Independent States," the loose grouping of ex-Soviet republics.


But some observers said a Russia-Belarus merger would be very costly to Russia, and pointed to the customs union which the two countries formed in 1995. In the wake of that agreement, Lukashenko granted a number of organizations the right to import goods duty-free. Belarus subsequently became a conduit for alcohol and other consumer items bound for Russia, avoiding Russian customs duties and other levies.


In broader terms, Russia, by merging with Belarus, could wind up having to subsidize an unproductive Soviet-style economic system.


"They are two different worlds, two economic systems: Belarus, with a command economy, a totalitarian regime; Russia, with elements of democracy and a market economy," said Konstantin Borovoi, a Duma deputy and head of the Party of Economic Freedom. "It is unreal, all the more so when you consider that Lukashenko actively speaks out against market transformation."


The Russian government has tried to maintain its economic reform course and hold to the guidelines set by the International Monetary Fund and other world lending institutions. It has prohibited its central bank, for instance, from issuing inflationary credits.


An official of Belarus' National Bank, on the other hand, told the Reuters news agency Tuesday that it plans to print money to cover the country's budget deficit. There has also been little in the way of privatization and other structural reform in Belarus.


Without a sharp change of course in Belarus, some observers said, the costs of integration would mount.


Free-market economist Andrei Illarionov told Izvestia that Russia's taxpayers would end up assuming Belarus' debt to Russian energy-providers, which he estimated at $1.5 billion.


"Integration would be a heavy burden for the budget of the Russian Federation, which is not in very good shape at the moment," said Igor Kolosnytsin of the Institute for the Economy in Transition. "It would not allow the Russian government to conduct this very tight monetary policy which is underway. Belarus' industry is much less restructured than Russia's -- if at all."