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Belarus Says Russia Offers Bulk Of Rescue Fund For Allies

Lukashenka (center) with Kyrgyz President Bakiev and Russian President Medvedev in Moscow
MOSCOW (Reuters) -- Belarusian President Alyaksandr Lukashenka has said that Russia is expected to contribute $7.5 billion to a rescue fund of five ex-Soviet states, on top of more than $3 billion already promised to individual allies.

The leaders of Russia, Belarus, and the Central Asian states of Kazakhstan, Kyrgyzstan, and Tajikistan discussed joint efforts to fight the global economic crisis, including the creation of a $10 billion mutual rescue fund, at a summit in Moscow on February 4.

"To create the anticrisis fund, which is worth approximately $10 billion, Russia will contribute $7.5 billion and Kazakhstan $1 billion," Lukashenka told the meeting.

Russian President Dmitry Medvedev, who addressed a final news conference, gave no figures of contributions by individual countries to the fund. He said there will be no nonrefundable handouts.

"We are creating this fund to issue our allies," he said. "Terms should be acceptable for the countries finding themselves in a difficult situation, similar to those under which international financial organizations issue their credits."

Russia, whose markets lost three-quarters of their value and where gold and currency reserves plummeted to under $390 billion from more than $600 billion last summer, is one of the worst losers from the raging global crisis.

But Russian leaders insist the national economy is still strong enough to weather the storm itself and help its allies.

In the past week, President Medvedev has promised $2.15 billion in a rescue package for Kyrgyzstan and another $350 million to Cold War-era ally Cuba.

Russia has also agreed to speed up allocation of a $1 billion credit to Belarus and said it would consider in the next two weeks Minsk's request for another 100 billion rubles ($2.77 billion).

Moscow, which aims at using the troubled times to consolidate control over allies, has won major political concessions from the recipients of the aid.

Belarus agreed to form a joint air-defense system with Russia, whose relations with NATO have reached post-Cold War lows in the past year.

Kyrgyzstan announced after receiving the Russian aid it would close a U.S. military base crucial for supplies of Western forces fighting in Afghanistan.

The rescue fund for the members of the economic group, the Eurasian Economic Community (Eurasec), was negotiated on February 4 as members of Collective Security Treaty Organization -- a post-Soviet security pact grouping Eurasec members plus Uzbekistan and Armenia -- were mulling the creation of a joint rapid reaction force.

The Russian-dominated force is set to become a nucleus for military and security cooperation between Russia's allies and a guarantor of stability in the post-Soviet space, especially in energy-rich Central Asia closely watched by the West.