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.
President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.
President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.
The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.
The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.
The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.