Updated at 21:13,24-10-2016

Lukashenkas Victory Be Paid by IMF instead of Kremlin

Pavel Dziadzin, www.udf.by
02-02-2010, 16:58

Lukashenkas Victory Be Paid by IMF instead of Kremlin

The International Monetary Fund is preparing a new programme for cooperation with the Belarusian government. This time, the IMF is ready to provide help of $3 billion, as the head of the Research Centre Mises Jaraslau Ramanchuk informed.

According to the expert, the IMF's help will be very opportunely for the Belarusian authorities, since Russian-Belarusian oil agreements signed in Moscow made a significant "hole" in the budget of Belarus.

"By my estimate, as a result of the introduction of new terms of oil supplies, the budget of this country will lose up to 4% of the GDP. If we take into account that international organisations forecasted GDP growth of 3%, it turns out that the economy in 2010 will work in minus. And I take the real situation, not those numbers that the government can draw in their reports", said the expert.

Jaraslau Ramanchuk reminded that the IMF credit on stand-by programme, approved in 2009, had pledged to allocate $ 3.52 billion to Belarus, of which 2.8 billion had been transferred to accounts of the government of Belarus.

"These funds were supposed to be used for reforming the economy. But the Belarusian government has practically ruined the work. First, the Privatisation Agency was not created, and the law on privatisation was not amended to guarantee the transparency of this process. In fact, the privatization itself was neglected. Even those 5 7 enterprises that they were ready to put up for auction were not sold", said Jaraslau Ramanchuk.

As the expert believes, the IMF's policy in Belarus poses a serious threat to the future development of the national economy.

"The IMF has concluded that the recession ended in Belarus, that the government took effective measures to combat the crisis. But we see that in November and December the National Bank began frantically printing money. The volume of money supply, which the National Bank managed to not only hold back, but at some time even reduce by 20%, for the year still grew by 5%. Meanwhile, the GDP continues to stagnate."

Another problem, which the National Bank failed to solve, is the growth of credit debt. In 2009, it grew by 40%. And that means that when there is not enough money, the National Bank will continue to print it. This, of course, will lead to inflation.

"But the IMF, closing its eyes to these problems, becomes one of the organisations, whose recommendations led to the deterioration of the macroeconomic situation in Belarus."

However, despite the threats to the stability of the Belarusian economy caused by the lack of real reform, the IMF is ready to further cooperate with the Government of Belarus by providing additional $ 3 billion credit assistance.

"In that case, I do not understand at all what the IMF is doing in our country. It, in fact, becomes the largest sponsor of the election campaign of President Alexander Lukashenka.

And then I see a good reason to believe that the IMF mission to Belarus is transforming from a purely economic organisation into a political one that will sponsor Lukashenka instead of the Kremlin. It continues to allocate huge amounts of money for the Belarusian authorities and asks for nothing in return. Such a policy can lead to the fact that Belarus will repeat the path of Mexico, Brazil or Argentina, which got in a very difficult economic situation just after the implementation of long-term programs of the IMF."

Meanwhile, as reported by the IMF Mission in Belarus, mission officials will visit the country from 3 to 16 February. The purpose of the visit is to examine the impact of the new terms of oil supply and transit on the economy of Belarus.

The schedule of the visit includes meetings in the government, the National Bank, and the Ministry of Economy and Finance. The work of IMF experts will influence the decision about the allocation of the next, fifth tranche of the loan amounting to about 700 million U.S. dollars to the Belarusian authorities.