Government’s efforts to create the Development Bank expedite

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April 22, 2016 17:58

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.

Comment

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).

 

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Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.

The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.

Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.

For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.

Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.

The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.