New cold war turns McDonald's grills off

August 9, 2002

The Belarusian State University has taken on a symbol of global capitalism - and seems to be winning, to the dismay of the United States.

The Minsk university began constructing a new building for its department of international relations last week. But the project requires closure of an adjacent McDonald's restaurant - a symbol of capitalism in a state that harks back to the Soviet era.

According to the university, it owns the site on which the restaurant stands, and the 40-year lease agreed between McDonald's and city authorities in 1997 is invalid.

Foreign firms are not allowed to purchase land in Belarus, but McDonald's felt its tenure at the site sufficiently secure for it to erect a three-storey building for a restaurant with offices above. Office space not required by McDonald's was rented out to five other companies, including the local bureau of the Prague-based US-funded Radio Liberty.

The university did not lay claim to the site until last year, when it announced plans for the new building. In subsequent negotiations McDonald's suggested that the university should take over the existing lease, and even drafted a proposed agreement.

According to Volha Trayan, McDonald's marketing manager in Minsk, the firm showed the university "every understanding", but no compromise was reached.

Last week a two-metre fence went up, blocking access to the McDonald's building, and construction work began. The restaurant is inaccessible, and the 150 staff can only get to their offices with difficulty. Other tenants, including the radio station staff, are seeking new premises.

McDonald's has appealed to the Belarusian government and city authorities. But even if the firm can get its lease confirmed, the restaurant will be unable to operate while building operations continue - a minimum of two years.

Ms Trayan described the situation as "a threat to the foreign investor". Michael Kozak, the US ambassador to Belarus, said prospective investors would be "alarmed by the fact that it is not safe to invest in this country".

The Belarusian government and Minsk city authorities seem unlikely to defend the restaurant.

A few weeks ago, Belarusian president Alaksandr Lukashenka, a critic of western influences, said there were already too many McDonald's in his country. No more would be permitted, and a home-grown fast food chain must be set up to counteract the McDonald's presence, he said.

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