Updated at 17:34,27-10-2020

National Bank head: Belarus can do without IMF loan


Belarus is interested to get a loan from the International Monetary Fund (IMF) but can do without it, said Nadzeya Yermakova, head of the National Bank of Belarus (NBB).

"We will do without them, but we need to earn the money that we must return to the IMF", Ms. Yermakova said in an interview with the government’s news agency BelTA on Tuesday. "There is another point, which is more serious. It is about the image of the country. If an international financial institution works with you, your image is strong. But I think that other institutions will come. The World Bank works with us, along with the European Bank for Reconstruction and Development".

The Belarusian authorities’ request for a new IMF loan was under discussion during a visit paid by an IMF team to Minsk between February 22 and March 6.

Speaking at a news conference on March 5, Christopher Jarvis, head of the IMF mission to Belarus, said that the Belarusian authorities should first draw up a strong economic program, noting that the IMF was ready to help them. "If the IMF thinks that there is a good prospect of getting full support from all parts of the authorities for a strong program,” then it will check whether all IMF member countries are prepared to support it, he said.

To a question as to whether the recent aggravation in relations between Belarus and the European Union could foil Minsk`s plans to get a new IMF loan, Mr. Jarvis said, "It is not really up to us to decide what will influence member countries".

"We wanted to get $3.5 billion in several installments to refinance our old debt", Ms. Yermakova told BelTA. "But even the IMF representatives who stayed here did not make it a secret that the political situation and political issues – whether IMF member countries will agree to work with Belarus in the framework of a new program -- mostly play a role".

The IMF team expressed a favorable opinion about measures taken by the National Bank to stabilize the economic situation, said Ms. Yermakova. "We were moving in the right direction and making the right decisions", she said.

However, its recommendation that the Belarusian authorities should not raise pay in the government-funded sector and, perhaps, even lower it is "beyond understanding", said the NBB head. "How is it possible to recommend worsening the life of the population? [A rise] in pay in the public sector is provided for in our spending plan. Not paying it will mean creating an artificial budget surplus. But why should we do this? People anyway should receive pay. Speaking of pay at industrial enterprises, it cannot be higher than earned by them thanks to their proceeds. Why should we somehow stimulate them not to earn their proceeds? It would be absolutely wrong."

Ms. Yermakova also questioned the IMF’s suggestion that the Belarusian authorities should start meaningful structural reforms to ensure long-term stability in the economy. "Structural reforms are taking place in our economy. Perhaps, they are slow, but they are still being carried out. It is just unrealistic to implement transformations in a flash. It is necessary to consider everything carefully before doing something. We do have a road map, but it is different from what the IMF wants to see".

Belarus borrowed a total of $3.46 billion under its stand-by arrangement with the IMF in 2009 and 2010.

In May last year, the authorities formally applied to the Fund for another loan, asking for up to $7 billion.