Foreign currency shortage: growth of debts and unpaid loans

April 22, 2016 17:54

Without new stabilization loans, the situation with the payment of energy bills, as well as other foreign currency payments by economic entities vis-?-vis banks and suppliers, will become worse.

On 1 April 2011 external arrears of Belarus for natural gas amounted to 213.2 billion rubles (about $ 70 million) (debt for February supply of gas). However in the first half of April this $ 70 million debt was repaid by Belarus and on 23 April Belarus paid for March supplies of gas. However, the bulk of the amount transferred to the Gazprom for gas was formed from the foreign currency loans of the banks given the amount of sales at the BCSE within the 30% mandatory sale was insufficient to meet the needs of Beltransgaz.

For the second month in a row there is an increasing spike in unpaid foreign currency loans. The volume of unpaid loans issued by the Belarusian banks in foreign currency on 1 May 2011 amounted to USD 295.1 million, i.e. it increased by 97.8% in January-April. In April, the growth of problematic foreign currency loans amounted to 41.9% against 29% in March.

According to the NBoB, the highest rate of the increased distressed debt to the banks was in the private sector. On 1 May arrears by private companies amounted to USD 131 million (increased by 56.9% in April) following the March rise by 2.3 times. In January-April problematic foreign currency loans of the private sector increased as compared with the beginning of this year by 5.3 times.

State-owned enterprises increased their foreign currency debt by 42.4% in the course of the past 4 months or by $ 146 million. April was marked with a sharp increase in overdue foreign currency debt by SOEs: by 38.4% compared with 0.7% in March.

State-owned enterprises increased their foreign currency debt by 42.4% in the course of the past 4 months or by $ 146 million. April was marked with a sharp increase in overdue foreign currency debt by SOEs: by 38.4% compared with 0.7% in March.

Private individuals, as before, decreased the foreign currency debt: on 1 May it was USD 18.1 million, which is 16.6% less as compared with the beginning of the year, including the April decline by 3.7% and in March by 7.4%.

Arrears of the “Belposhta” to the “Mail of Russia” on money transfers between Russia and Belarus, was 195 million rubles on 21 April. In mid-April the “Mail of Russia” reported that due to non-paid financial obligations by the “Belposhta” under the agreement on the exchange of international wire transfers, the Russian company could terminate the payment of money orders from Belarus.

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August 21, 2017 10:55
Image: TUT.BY

The Belarusian authorities are attempting to strengthen some elements of the ‘Soviet’ education to ensure the ideological loyalty of new generations to the state. Most likely, one of the major tasks of the educational reform is to prevent growing discontent with the existing education system among the population. The educational reform aims to strengthen centralisation and adjust the system to the needs of the public sector.

In Belarus, the Ministry of Labour and Social Protection and the Ministry of Economy would determine the university enrolment figures.

The Belarusian authorities do not seem to have a long-term vision of the educational reform. The education system changes depending on who leads the Education Ministry and has access to President Lukashenka. For instance, former head of pro-government communist party and Education Minister Igor Karpenko reintroduced some "Soviet" elements to the school and strengthened ideological components along with the de-politicisation of the curricula. Current generation of students and youth have not spoken against the authorities, unlike previous generations raised during the Gorbachev thaw and socio-political transformations of the 1990s.

In addition, the Belarusian authorities are attempting to adopt measures aiming to prevent discontent among the population with the Belarusian education system. The authorities are mobilizing those nostalgic for the USSR and propose to return to 5-marks grading system, school uniforms and reduced curriculum. The Belarusian leadership also aims to blur the growing social stratification in society and to relax social tension due to the growing income gap between the richest and poorest.

Should the authorities adopt plans to reduce university enrolment, they would re-certify universities in order to close some of them and would reduce competition from private educational institutions. The Belarusian leadership is attempting to adjust the education system to the needs of the real economy, to reduce pressure on the labour market and to cut government spending on higher education for specialists low in demand by replacing them with graduates of secondary vocational schools requiring less time to train.