Reference letter from third world country I hold a 5 years "specialist degree" from a university in Belarus and I'm going to apply to a Ph. D. program in engineering in US. I have several problems regarding my reference letters.

The professor who was my Engineering Project adviser and who taught several important courses in my group for two years can give me strong a reference because my project was the best in the department. However: 


He doesn't know English. 
He is currently retired.
Professors in Belarus seldom have personal e-mail addressed and neither does he.
He doesn't have publications in English. 


Any ideas how to solve these problems? Translate the reference, put it into an envelope and then ask the professor to sign envelope as required? Will the reference be even opened and taken into account?
First, contrary to the optimism of some of the other answers, you should not expect that the university you're applying-to will translate a letter sent to them. At my university in the U.S., the traditional requirement was that a "certified translation" be made-and-paid-for by the student. 

At the same time, the tradition in applications in the U.S. for many years is that the student does not send the letters of recommendation (and/or translations) themself, but has either the faculty send them, or some secretarial staff. If you send paper mail and include such letters, they will most likely be considered "compromised" and invalid...

Your recommender's having an email account is not so important, as perhaps having internet access to upload an electronic file (scanned letter and translation and certification-of-translation, or PDF letter and others directly electronically), since the default process is more-and-more purely electronic. 

Some application systems seem to default to sending an email to the recommenders, asking for an upload, and additionally asking for other information. I shudder to think how these systems could be made to cope with cases not fitting neatly into the designers' (often ill-informed) design choices.

(Indeed, the most recent "upgrade" to my university's over-arching software system makes certain things essentially impossible, ...)

The degree of complication will vary from university to university, and you'll need to be very pro-active to make sure that the certification of translation is adequate, and that paper-mail really arrives, if your recommender cannot manage to send email.