EurAsEC Anti-Crisis Fund: Belarus has already budgeted future installments
The draft 2013 state budget has incorporated the receipt and use of the fifth and sixth tranches within the EurAsEC ACF loan to finance the national budget’s deficit. However, there may be certain difficulties in negotiating the tranches’ disbursement, linked to the failure to meet a set of agreed indicators.
From 15th to 19th October 2012, EurAsEC Anti-Crisis Fund evaluation mission will be working in Belarus.
On October 2nd, 2012 the House of Representatives approved in the first reading the draft law “On the 2013 national budget”. The draft 2013 budget is balanced. The balanced budget lists USD 880 million in external funding from international creditors, i.e. the EurAsEC Anti-Crisis Fund. Conditions for the allocation of ACF tranches are elaborated in the Letter of Intent dated June 13, 2012.
Some indicators, essential for receiving the next tranche from the Anti-Crisis Fund, will not be implemented. The ACF considers the failure to fulfill the requirement regarding increased share in utility costs and transport tariffs coverage by the population, as non critical. Alternatively, failure to meet the volumes of state property sales is critical.
Today there are no major privatization transactions. MAZ and KAMAZ assets merger will not take place before 2013. An attempt to sell MTS shares for USD 1 billion is doomed to failure. Deterioration in the foreign exchange market and an urgent need to refinance the public debt could result in increased pressure from Russia in terms of privatization.
Belarus has no other options for external funding. 2013 socio-economic development plan leaves little hope for new cooperation programme with the IMF. Belaruskali loan refinancing agreement was made on market terms.
Russia could exploit the situation and delay negotiations on the next tranche’s allocation. In the circumstances, when yet unavailable resources have been budgeted, and their replacement is impossible on similar conditions, there may be trade-offs in terms of easing the requirements for potential buyers from Russia, willing to buy state-owned Belarusian assets.
The Belarusian authorities could to step up the opposition representation in local councils, should party members demonstrate potency. The Belarusian leadership is unlikely to have the resources to ensure 100 percent pro-government candidates in the local elections. The authorities have exhausted the grassroot support and have no funds to pay for the loyalty.
The Belarusian Central Election Commission has proposed to hold the elections to the local Councils of Deputies on February 18th, 2018.
The president has repeatedly emphasised the importance of the local councils in the power system and the state machine always tried to ensure the necessary local election results. Candidates have been decreasing in number with each elections and the authorities dealt with that by reducing the deputy corps. That said, during the rule of President Lukashenka, his electoral base has changed substantially. Over the past decade, most Belarusians have moved to cities and lost their local roots. The rural population is ready to support the president, but rural residents are constantly decreasing in number.
The Belarusian leadership is likely to permit broad participation in the election campaign and an increase in alternative representatives in the local councils. However, the opposition would have to boost its activity, so as so far it has been passive in defending its interests. In addition, the authorities, while determining the date for the local elections, have taken into account the fact that the opposition is usually the least active in the winter time.
Overall, both, the opposition and the local authorities have exhausted their grassroot support, however new local leaders may still come on political stage, although the party opposition has not yet shown sufficient aspirations.