Funding of state programmes
The launch of the Development Bank should improve the effectiveness of state support programmes and, consequently, the macroeconomic stability in general. However, it is likely that industry lobbyists will accommodate the new rules of financing of state programmes to fit their needs.
A joint Resolution of the Government and National Bank No 14/1 of January 5, 2012 approved the terms and conditions of financing of projects, listed as state support programmes by the “Development Bank of Belarus”. The document stipulates the Development Bank will fund the state programmes on its own behalf and at its own expenses.
In this regard the statement of the Chairman of the Board of the National Bank Nikolay Luzgin speaks for itself, “Certain stabilization makes some business executives and government officials feel euphoria and complacency. They start applying for all sorts of programmes, construction sites, irrelevant of their cost recovery in foreign currency. They start applying for loans, naturally for preferential ones, via the state programmes. However the situation remains rather complicated”.
The Banks’ priorities include loans for state programmes for housing construction in rural areas, agricultural development, the creation or development of high-tech industries. The volumes of funding within these state programmes, and sources of funding are defined in the draft budget of the Development Bank in compliance with the annual plan of financing of state programmes, which is determined by the Government.
However, the document emphasizes that the decision on funding of projects listed in the state programmes should be taken directly by the Development Bank and in the case of an outstanding debt of an applicant to the Development Bank regarding loans issued previously, new loans will not be granted. The Bank also has the right to suspend loan transfers under previously signed contracts.
Last week, Belarusian Foreign Minister Makei participated in the foreign ministers’ meeting of the Eastern Partnership and Visegrad Group initiative hosted by Warsaw. The Belarusian FM emphasized Belarus' interest in cooperation in the transport sector, which could be due to Belarus’ desire to export electricity surplus after Belarus finished construction of the nuclear power plant in Ostrovets. Minsk expressed concerns about Warsaw’s stance on the Belarusian NPP, as it refused to buy electricity from Belarus and supported Vilnius’ protest on this issue. Following accusations by the Belarusian leadership and the state media against western states, including Poland, of training "nationalist militants", Minsk did not agree on the visit of the European Parliament deputies from Lithuania and Germany to Belarus and to the NPP construction site near Ostrovets in particular. In addition, the Belarusian authorities have stepped up efforts to enforce education in Russian in Polish-language schools in Grodno and Vaukavysk. Should a rift in Belarusian-Polish relations persist, the Belarusian authorities are likely to step up the pressure on the Polish-speaking minority in Belarus.