Foreign debts refinancing is the only strategy for the Government
In 2013-2015 Belarus will has to repay USD 10 billion foreign debt. Belarus’s economic performance shows that the country will not be able to take care of the external debt burden on her own. In these circumstances, debt repayment is only possible via new external borrowing.
On September 26th, 2012 Finance Minister Kharkovets announced plans to place government bonds in foreign markets in 2013.
In 2012 Belarus was able to pay off some debt due to the successful trade during the first half of the year. Gross external debt decreased by USD 882.1 million, but simultaneously, Belarus is attracting foreign loans to fund various infrastructure projects. Over the next 3 years it will have to repay about USD 10 billion debt. Moreover, within a year Belarus will have to find a way to refinance USD 11.3 billion corporate and banking sector debt.
This week Belarus managed to agree on refinancing of Belaruskali debt vis-à-vis Russian Sberbank. The new term, 3 years, is not accidental. The authorities intentionally stretched the debt repayment over a long-term period hoping for the improvement of the economic situation in the future. Debt refinancing is natural, regardless of many statements about the possible early repay of the existing debt. Otherwise, the Ministry of Finance would have to use its gold reserves, while the loan was originally intended to replenish them.
The announced development strategy for 2013 shows there is no alternative development. EurAsEC ACF credit line and potential expansion to Asia-Pacific financial markets are need to refinance half of the USD 3 billion debt, due for pay off in 2013. Interest payments on foreign loans will mature in the expenditure budget. Bearing these numbers in mind, it is unrealistic to count on successful foreign trade, which is anticipated to replenish the gold reserves and at the same time to pay off foreign debts.
FDIs could be used to repay foreign debt, but unclear privatization programme and long sales procedures harmonization process do not contribute to maximizing profits from the state property sales.
In 2013 Belarus will be actively looking for external financing to repay the existing debt. Also the size of the needed funds (USD 500-600 million) is likely to increase.
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.