Authorities continue searching for currency sources
In late July Belarus plans to attract a $ 1 billion credit for the supply of potash fertilizers or for assets of Belaruskaliy, said Vice-Premier Vladimir Semashko.
Vladimir Semashko added that the inflow of foreign currency could be secured via placing public offers of shares of large domestic companies on foreign stock markets. In particular, with the “Deutsche Bank” they are investigating opportunities to place IPOs of BelAZ on foreign stock markets.
Vice-Premier Anatoly Tozik met with Vice Minister of Commerce of China Chen Jian and said that the swap agreement which was signed two years ago should be implemented with greater effort: back than Belarus and China swapped USD 3 billion of the national currencies.
The country needs an urgent influx of foreign currency. In January-May 2011 the requirements of commercial banks in foreign currency to the central bank increased from USD 531.7 million to USD 4.538 billion by 1 June. In the meanwhile the gold reserves calculated by the IMF standards went down by USD 1.438 billion in January-May and reached USD 3.593 billion, which is the lowest since 1 September 2009. The foreign currency liabilities of the National Bank to the banks exceed the volume of the international reserves by USD 944.8 million. In other words, the National Bank does not have sufficient funds for one-time payment for current liabilities to the banking sector, which casts doubt on the ability of the National Bank to discharge its liabilities in foreign currency in a timely manner.
Due to the lack of money, the country finds itself in a virtually “pre-default” state. The authorities need to find funds in the amount of approximately $ 5 billion urgently (before October). There are only two sources of revenues: new loans and privatization. The authorities work in both directions, however it is clear that the conditions put forward by the President are not satisfactory for the potential investors and creditors. Moreover, all representatives of the highest authorities (Lukashenko, Makey, Myasnikovich, Semashko and others) talk about some potential revenues and transactions in order to reduce stress and reassure investors and the population.
Accordingly, the government continues its difficult negotiations and at the same time it adopts a directive related to distribution of foreign currency earnings in the country and actively uses other administrative tools. The authorities try to tighten the monetary and fiscal policy (demands put forward by Russia and the IMF), as well as to fulfill the requirement of the IMF concerning the single exchange rate. The IMF yields for a single exchange rate as a requirement for granting a new loan, while the authorities plan to come to a single exchange rate by the end of 2011 (Br 5,000 per USD) and they need the loan to maintain the exchange rate at the level established by the National Bank.
It is obvious that this year IPOs will not be held: as a rule their preparation requires a couple of years. Possibility of a USD 1 billion loan under the condition of future privatization of Belaruskaliy or supply of fertilizers is questionable and denied by the Russian investors. Therefore, given the absence of privatization deals, investors have every reason to doubt the medium-term solvency of the country.
President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.
President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.
The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.
The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.
The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.