Updated at 16:23,20-06-2018

In return of loan: IMF wants Lukashenka to carry out reforms

Belsat.eu, phot. ria.ru

Three months ago, representatives of the International Monetary Fund visited Belarus for the regular annual inspection of its economy. But the current visit is extraordinary; its objectives have not been announced either by the Belarusian authorities or by the Fund.

The delegation might be aiming at working out the conditions under which the IMF could allocate a long-expected $3 bn loan to Minsk.

Belarus has been trying to get a new program over the past years, but the negotiations repeatedly failed, because Minsk did not agree on market reforms recommended by the IMF in return of a vital economic lifeline.

Delays are dangerous

To pay off foreign loans in 2017, our country needs to re-take more than $3 bn. The government, among other things, is bargaining for receiving $1 bn tranche from the IMF next year. If they fail to get the IMF money or borrow from someone else, the regime will be either forced to default or radically curtail budget expenses.

To have the IMF program implemented, the Belarusian authorities will have to drastically cut subsidies to inefficient industries and agriculture. However, it is easy to meet these conditions because Belarus does not have enough money to sponsor ill-developed branches. Moreover, the hope for cheap Russian gas also failed.

Economy inseparable from politics

Market reforms will definitely receal the first symptoms of the crisis, i.e. rising unemployment and bankruptcy of uncompetitive industries, but, due to the release of resources, in several years private businesses are likely to replace them.

But the effective management of the market economy needs political reforms in the form of independent parliament and courts. As the authorities are still not eager to take these steps, experts fear that the reforms as part of the IMF program may go into a skid.