Reuters: Sannikov is the strongest rival of Lukashenko

The leading news agency of the world has prepared a report on Belarus.

Alexander Lukashenko is relishing his notoriety as Europe's last dictator. He is a pariah in the West, viewed suspiciously by Russia and loathed by opponents in exile or jail.

After 18 years in power, the blunt, forceful and heavily built former state farm manager shows no sign of bowing to Western pressure to relax his grip on the former Soviet republic squeezed between Russia and the European Union.

Always defiant, often cantankerous and sometimes provocative, Lukashenko has added irony to his armory to deflect Western politicians' criticism, touting their dictator tag as a badge of honor.

"I am the last and only dictator in Europe. Indeed there are none anywhere else in the world," he told Reuters in a rare interview in the capital Minsk in which he repeatedly referred to himself as a dictator and to his rule as a dictatorship.

"You came here and looked at a living dictator. Where else would you see one? There is something in this. They say that even bad publicity is good publicity."

Lukashenko's words are delivered with a wry grin and a wave of his immense hands, and appear intended to taunt the critics whose calls for more economic and political freedom have gone largely unheeded since he first became president in 1994.

The 58-year-old leader does not tire of telling guests that Belarus is the geographical centre of Europe. But the country of 9.5 million does not share the same democratic values as its western neighbors.

Minsk's broad thoroughfares are still lined with monolithic Soviet-era buildings. There are streets named after Soviet founder Vladimir Lenin and philosophers Karl Marx and Friedrich Engels, though some may now boast smart Western shops, such as a showroom for Porsche cars and McDonald's fast-food restaurants.

There is not a single opposition deputy in parliament. Lukashenko, if re-elected, can rule indefinitely following a referendum that allowed term limits to be lifted, and the opposition has been all but crushed into submission.

His strongest rival, Andrei Sannikov, once a deputy foreign minister, took political refuge in Britain last month after 16 months in prison in which he said prison staff tortured him and tried to get him to commit suicide.

Years of diplomatic spats with the West have left Belarus isolated, but a European Union travel and assets ban on people and companies associated with his government has had no obvious impact on Lukashenko's policies.

He is promising to modernize the largely state-run economy and possibly one day build a party-based political system. But he scoffs at talk of rapid change or the possibility of upheaval like the "Arab Spring" that swept away Middle East leaders.

"There's no point in comparing the policy of Belarus and the Middle East. A few people tried through social networking to make the situation explosive," he said, referring to "silent" protests last year when opponents gathered in public places to applaud ironically.

"But nothing came of it. Nor will anything come of it. Every day we have changes here. There is no scope for revolutions coming to Belarus," he said, sitting in an ornate armchair in a luxurious room with green carpets and a chandelier in his cavernous presidential residence.

In mid-2010, after signs Lukashenko was easing pressure on the political opposition, it seemed that Western governments might be ready to relax their harsh criticism of him.

But all that ended in December 2010 when, after he was voted in for a fourth consecutive term, riot police broke up rallies by tens of thousands of people against his re-election.

Several politicians who ran against him for office were detained by security forces, including Sannikov, and scores of opponents were picked up in their homes. The EU and the United States tightened sanctions on Lukashenko and his inner circle.

This week the Justice Ministry closed down the Minsk office of the human rights organization Viasna whose head Ales Beliatski is serving a four and a half jail term after a trial for tax evasion described as unfair by Amnesty International.

Lukashenko's message to the West is one of defiance, coupled with a sense of seething injustice at being ostracized for not following Western-style policies.

"You (Europe) do not like the course Belarus is taking. You would like everything here to be sold off - in the interests of Russia or in the interests of Western companies," he said, shifting forward in his chair and almost shouting as he denounced the West, his face coloring with anger.

"You do not like the fact that we have good relations with Russia. This is determined by our history. During the last war we fought together in the trenches against the Nazis. We saved you, Europe, from being slaves to your own Fuehrer."

In a veiled threat to Europe to stop "choking" Belarus, he reminded Europe that it receives much of its oil and natural gas from Russia via pipelines that run through the country.

"Who needs these double-standards? Who needs instability in the heart of Europe? Not you, not us, not Russia. Let's talk, we are people," he said.

Lukashenko rejected Western charges of holding political prisoners, saying specific cases raised by the West relate to people who committed criminal offences.

Asked about alleged abuse of human rights, he waved the question to one side, saying he was the guarantor of the most important right - the right to live.

He seethes too as he recalls a pro-democracy stunt by a Swedish PR company in which hundreds of teddy bears were dropped from a light airplane over Belarus last July.

"You recently sent over a plane with humorous toys and this was a violation (of Belarus's air space). And what if the military had opened fire and people had been killed?" he said.

Inflation in 2011 was 108 percent and, although it fell to 18 percent in the first 10 months of 2012, this is a coinless society where all banknotes and bills end in zeroes.

Belarus also has a $12-billion debt pile, a large amount for a country which Lukashenko says has an annual gross domestic product of about $60 billion.

Despite this, stability has been his by-word for two decades as he waged war on corruption and as neighboring Russia wilted under mafia-style crime, violence and sometimes political chaos.

"A simple nation put me in this chair. I have never moved away from my promises to people," he said.

Dismissing any concern about economic instability after a parliamentary election in October, he blamed fluctuations in the value of the Belarussian rouble last month on opponents he often describes as a "fifth column".

But the economy is a concern for many Belarussians.

"How can we live when there is a crisis every year?" said Andrei, 45, a Minsk resident who declined to give his last name.

An effective state security machine, still bearing the Soviet name of the KGB, ensures public protests against his rule are snuffed out fast. A statue to Soviet security police founder Felix Dzerzhinsky - long since removed in many former communist east European countries - stands opposite the KGB headquarters.

Despite his hostility to western Europe over criticism, he is wary of Belarus being drawn back in to Moscow's orbit.

Lukashenko has long played Russia's interests off against those of western Europe - but he has also gone to lengths to shut out large-scale Russian investment from an accessible market of potentially rich pickings for the Russian investor.

Despite their economic inter-dependency, and moves towards a customs union between Russia, Belarus and Kazakhstan, Moscow still shows signs of wariness about Lukashenko's unpredictability and, Belarussian political analysts say, he and Putin do not enjoy a particularly warm relationship.

The balancing act appeared to tip in Russia's favor last year, however, when it bailed Belarus out of a financial crisis.

Under the bailout package, Belarus made pledges to allow the privatization of some state companies that could interest Russian investors, and allowed the sale of the Beltransgas pipeline network supplying western Europe.

Lukashenko hopes for a new deal with the International Monetary Fund to help Belarus through an anticipated debt repayment crunch in 2013, if the international lender stops "playing politics". The country has to find $1.6 billion in repayments to the IMF alone next year under an old program.

There is nothing in the constitution to stop Lukashenko seeking a fifth five-year term in 2015, or then a sixth.

But the president, who has two adult sons and an eight-year-old son, Kolya, who attends some official functions, denies he is grooming a successor.

"I am reproached for allegedly preparing my children, my eldest son as a successor. But I swear to you: I have never discussed this idea even with my family or with my sons. These are dreamed up by the Fifth Column in our country," he said.

"I shan't be holding on to this job for life. As soon as people decline my services, I'll put my brief case under my arm and I'll be off."