Government’s efforts to create the Development Bank expedite
The Government expedites its efforts to set up the Development Bank in order to remove the burden of funding of governmental programs from the largest state-owned banks. Functioning Development Bank is one of the IMF requirements and also an opportunity to sell part of stakes in these banks at a better price.
The government of Belarus has approved the Credit Development Bank to deal with restructuring of loans issued to state banks for financing of the sate programmes. Under the new regulation, the Development Bank will restructure debts transferred to it by the state banks via deferment (installment) of repayment of principal debts and overdue interest payments. The mechanisms of restructuring include conversion of foreign currency loans into Belarusian rubles and exemption from penalties for overdue interest payments during the period of insolvency.
The Development Bank is also an agent of the Belarusian government for servicing and repayment of external public debt and foreign borrowings guaranteed by the government, issued for funding of projects, part of the state programme. Currently the funding of state programmes is implemented mainly by state-owned banks "Belarusbank" and "Belagroprombank".
In June 2011 the President of Belarus signed a decree on the establishment of the Development Bank of Belarus with a statutory fund Br20 billion (government share is 95%, share of the NBB is 5%). The Bank will take on its balance sheet loans of state banks issued for funding of state programmes before 1st January 2011, and as of 1st January 2012 it will take over funding of state programmes. The Development Bank is also an agent of the Belarusian government for servicing and repayment of external public debt and foreign borrowings guaranteed by the government, issued for funding of projects, part of the state programme. Currently the funding of state programmes is implemented mainly by state-owned banks "Belarusbank" and "Belagroprombank".
Creation of the Development Bank and changes in the funding mechanism of the state programmes was a basic condition of the IMF, which Belarus has not complied with since the previous loan has been provided by the IMF. Today the authorities are trying to accelerate the adoption of regulations that will allow the Development Bank to perform its functions and to unload the largest state-owned banks. As soon as the burden of governmental programmes is removed from the “Belarusbank” and “Belargroprombank”, their chances for being privatized would increase (the National Bank does not hide his desire to sell stakes in these banks at a reasonable price).
President Lukashenka has met with the head of Chechnya Ramzan Kadyrov, who visited Minsk and the Minsk Automobile Plant. Minsk has always sought to have independent links with Russian regional elites, partially, to compensate for the Kremlin's diminishing interest in Belarus. In recent years, Belarus’ contacts with the Russian regions have been extremely intense. However, with some leaders of Russian regions, primarily heads of large republics, communication was more difficult to build. As many analysts in Minsk suggested, Minsk could regard contacts between President Lukashenka and the head of Chechnya as an additional communication channel for relieving tension in relations with the Kremlin. However, most likely, a trusting relationship with Kadyrov is a value for Minsk as such, provided Kadyrov’s broad business and political interests, and a high degree of autonomy for the Chechen leader from the Kremlin.