Russia Should Give Belarus Cheap Loans:Lukashenko

Lukashenko said the IMF had for the moment done more for Belarus than had Russia.

Russia should help Belarus by extending it more loans at attractive rates if it wants to benefit from an air defence system linking the two neighbours, President Alexander Lukashenko was quoted as saying on Tuesday.

Belarus, Russia and other ex-Soviet states announced plans last week to create an air defence system running from Belarus's border with three NATO states through Russia to the Chinese border.

Russia, Belarus's main supplier of energy, has already pledged $2 billion in credits to Minsk and disbursed half that sum. Belarus has also clinched a $2.5 billion loan deal with the International Monetary Fund.

"If Belarus collapses, it will be a loss to Russia that is far greater than support worth $2 billion," state news agencies quoted Lukashenko as saying.

He said his country of 10 million people was making concessions to Russia as it had limited choices in securing energy and was unlikely to withstand any transition to market prices -- as will be the case with neighbouring Ukraine from next year.

Belarus is hoping to secure a further credit of 100 billion Russian roubles (about $2.7 billion) as well as $10 billion from a stabilisation fund overseen mainly by Russia to offset the effects of the world financial crisis.

Moscow has openly suggested to Belarus that it wants its western neighbour to recognise the separatist Georgian regions of South Ossetia and Abkhazia -- the focal points of Russia's brief war last August with Georgia.

Only Nicaragua has extended such recognition. Belarus, allied with Russia under a largely unimplemented "union treaty" launched in the mid-1990s to create a post-Soviet merger, has so far declined to do so.

Lukashenko said the IMF had for the moment done more for Belarus than had Russia.

"The West is giving us credits three times more advantageous than Russia," he was quoted as saying. Russia, he said, should also remove trade restrictions.

"While we have already moved towards close unity and agreed on air defence and similar issues and gone shoulder to shoulder with Russia, why do you keep blocking our shipments to the Russian market?" he said.