Updated at 20:51,24-11-2020

Former head of Belarus' National Bank: Banking system is in trouble


In February Belarusian authorities intend to discuss with the IMF mission the issue of a new loan program. This was stated by chairman of the National Bank Nadezhda Ermakova at a press conference in Minsk on January 30.

Why a new loan is needed, while everything, as it's said be the state media, goes well, and foreign exchange reserves reached its record? In an interview to UDF.BY former chairman of the National Bank of Belarus Stanislav Bogdankevich answers on this and other questions.

- Belarusian authorities claim the crisis, in general, was met, but at the same time ask for another loan. Why? Why not to do without it?

- I think, this loan is needed. First and foremost, for the use of currency resources to develop, rather than for consumption and the exchange rate support. We need to develop the economy, rather than trying to preserve the status quo. As a result, on the basis of productivity wages and pensions will rise, and it will be possible to solve the problem of competitiveness, etc. A loan from the International Monetary Fund is the cheapest, it is favorable and long-term. This is not the loan, which Sberbank of Russia gave us: for a one year and in the year-end it has to be repaid.

Secondly, Belarus is to face a big payments on foreign debt. As well as payments of the Ministry of Finance and National Bank on their debts, and the banking system, and some debts of enterprises ... Even if exports and imports are balanced, these payments need additional resources. And in order to ensure the stability of currency, it's necessary to have these resources.

- Both, Ermakova and Lukashenko said the IMF surrounded the loan by political conditions. In particular, by the demand to release political prisoners. But political prisoners remain in prison, and does this mean that hope of getting money from the IMF is in vain?

- Hard to say. I think, if the authorities hope to get loans, then it will allow some liberalization. At least, the release of political prisoners.

Also, I think the authorities understand, that except getting the loan, a more clear program of reforms is needed, which still are not there, that is, a crisis management program is needed. Non-recognition of the crisis when the three times collapse is going on in the consumer and currency markets - this is nonsense! The crisis must be recognized and should be evaluated: personnel, and economic, and political causes of this crisis to prevent it again. But none of this is done. But banking system is in trouble: the loss of capital - $3.5 billion, the population lost their savings at $1.5 billion, the lost circulating capital of enterprises in money form is large, etc. These are huge, billion-dollar losses by the country in no time. Someone should answer for that! And someone needs to point out mistakes and the inadmissibility of such a thing. Apparently, global staff changes at the highest level are needed.

I note, I don't agree with the opinion that politics doesn't play here some role. It plays not half, and it is time to finally carry out a liberal political reform. And looks like as Lukashenko has matured, said that was considering a political reform. But we need him to think in the right direction, looking not at China, but at the civilized world - at Europe, so that reforms will be of the liberal democratic kind.