External creditors believe Belarusians should pay more for utilities and public transport
Performance assessment of Belarus’ fulfillment of its obligations within the EurAsEC loan made by the Eurasian Development Bank (EDB) jeopardizes the timely allotment of the following tranche from the EurAsEC Anti-Crisis Fund (ACF). The ACF rules, applied to Belarus, force Belarus to increase housing and transportation tariffs in the near future.
On 24 January the Eurasian Development Bank (EDB), fund manager of the Anti-Crisis Fund of the EurAsEC, issued a press release assessing cooperation with Belarus within the framework of crediting of the anti-crisisprogramme. At the same time the EDB refused to clarify the terms and conditions for the third installment of the loan for Belarus, referring to the fact that negotiations have just started.
Expert team of EDB mainly complained about the following: 1. as a result of 2011, one of the most important parameters concerning adjustment of the balance of payments and inhibition of inflation, namely, cost-cutting on state programmes, has not been met; 2. municipal services and transportation costs reimbursement rates have not been met.
According to provisional data, in 2011, funding of state programmes made up 4.5% of the GDP, which is by 0.5 % higher than the benchmark provided by the coordinated anti-crisis programme. The level of cost recovery for utilities is significantly below the stipulated 30% and for transport - 70%, envisaged by the stabilization programme. EDB experts in cooperation with the Government drafted a new agreement (a letter of intent), which takes into account the results of joint work in 2011, and amends the anti-crisis programme.
The Belarusian government hopes that the issue of the following installment of the ACF of the EurAsEC will be reviewed in February. However, it is likely that the ACF will delay the payment of USD 440 million, demanding the Government to increase housing and transportation tariffs.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.