MINSK (Reuters) -- Belarus's president declared an end on May 29 to "begging" to Russia and told his government to ignore Moscow's decision to shelve a $500 million loan and turn elsewhere to find credits.
Alyaksandr Lukashenka made his comments a day after Russia's finance minister said the funds were no longer on offer as its smaller Western neighbor -- linked by a "union treaty" since the 1990s -- could be insolvent by the end of the year.
Finance Minister Alexei Kudrin's remarks appeared to reflect growing frustration with Belarus, whose loyalty is now caught in a struggle for influence between Russia and the European Union.
"If it doesn't work with Russia, there is no need to bow down, no need to whimper and weep. We will have to try our luck in another part of the planet," the official BelTA news agency quoted Lukashenka as telling a gathering of economic officials.
"Let me say this loud and clear. No begging or beseeching. If they haven't got the $500 million they promised us long ago, there is no need to go asking for it."
Lukashenka said Kudrin's comments had "sown panic" throughout his country of 10 million. And he rejected his pessimistic view of the Belarusian economy.
"If they have such a wonderful economy, where does their 10 percent decline in GDP come from?" BelTA quoted him as saying. "Our economy may be different, but we are expecting growth of 1.5 percent this year."
Russian Prime Minister Vladimir Putin, speaking after talks between the two governments, softened some of Kudrin's criticism. But the Belarusian leader said he believed the two had coordinated their positions.
Credits For Ex-Soviet Allies
Russia, with good reserves following a decade of economic growth, has promised nearly $5 billion of rescue credits to ex-Soviet allies, including Belarus, Kyrgyzstan, and Armenia.
Belarus received the first tranche of $1 billion last year followed by another $500 million this year. Kudrin said further financing was halted as Moscow was unhappy with Lukashenka's reliance on "administrative mechanisms" in economic policy.
Russia's ambassador to Belarus said the future of the loan depended on Minsk's talks with the International Monetary Fund, which has yet to approve the second $400 million tranche of a $2.4 billion loan program.
Strains in relations between Russia and Belarus became acute after a 2007 row over energy supplies and prices.
Russia has also been alarmed by Belarus's rapprochement with the European Union, which the Kremlin fears could threaten its interests and give Lukashenka new bargaining power with Moscow.
Accused by the West of flouting human rights, Lukashenka has taken steps to deflect EU criticism by releasing the last of what Western countries called political prisoners.
The EU suspended a travel ban on him and Belarus was invited to join the bloc's "Eastern Partnership" to bring former Soviet states apart from Russia closer to the EU. Moscow views the scheme with considerable suspicion.
In his comments, Lukashenka dismissed any notion linking the loan to Belarus's failure to recognise two Russian-backed separatist regions in Georgia -- Abkhazia and South Ossetia.
And he urged Belarusian Prime Minister Sergei Sidorsky to start looking for alternative markets for Belarusian goods.
"Surely, [he] need no longer take his ministers down such a beaten path," BelTA quoted him as saying. "Why keep going to Russia, where we simply get kicked around?"