Belarus interested in the New IMF Standby Program
Belarus is interested in implementing the new IMF standby program with corresponding financial support. However, cooperation can be resumed only on condition that Belarus stabilizes its relations with the EU and the USA. Belarus also has to implement serious structural reforms in the economy and extend its program on the privatization of state assets.
Belarus would like to resume a dialogue on prospects for the allocation of a second standby program with corresponding financial support from the IMF, said Belarusian Prime Minister Mikhail Miasnikovich during his meeting with the new head of the IMF mission to Belarus David Hoffman on June 6.
Hoffman noted that he is replacing the previous head - Chris Jarvis. The purpose of this mission is to become familiar with the situation and prepare ground for the work of the third post-program mission that is scheduled to begin in October 2012. David Hoffman has previously worked in the European department of the IMF.
We believe that allocation of a new backup IMF loan would allow the residents of Belarus to pass the peak of forthcoming payments on foreign debt as normal. It should be noted that, as of April 1, Belarus’ total external debt amounted to USD 33.727 billion, which is equal to 80.1% of GDP on an annualized basis.
At the same time, cooperation between the IMF and Belarus is possible only if political relations are normalized between Belarus and the USA and the EU, which are the main members of the IMF. Moreover, the Belarusian authorities have to confirm their strong willingness to carry out serious structural and market reforms in the economy, including the extension of the privatization program of state property in the short-term as well as the medium-term.
For reference. In February 2009 - June 2012, Belarus made debt-service payments on the backup IMF loan totaling USD 303.6 million. As a result, the outstanding balance of principal of IMF loan declined from USD 3.484 billion as of January 1, 2012 to USD 3.351 billion as of July, 1 (subject to exchange rate fluctuations of SDR against the U.S. dollar). The next payment of interest and commission payments is scheduled in August this year.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.