New tranches from EDB require Belarus to reduce state control over economy

In April 2017, the Eurasian Development Bank transferred USD 300 million, the third tranche within in the loan agreement with Belarus and updated the loan terms. The terms for fifth through seventh tranches have been amended to include, inter alia, requirements to improve corporate governance in 17 joint-stock companies and to transfer 45 state enterprises to communal ownership. State owned shares in some enterprises are likely to be offered for sale, but due to the lack of interest from foreign investors, part of enterprises is unlikely to be sold and could be bought by Belarusian companies. That said, if enterprises would come with an encumbrance banning layoffs and imposing other social obligations, sales of state shares are unlikely to materialise. Requirements to reduce the state role in the economy have repeatedly been included in the terms of various loan programmes, but were never implemented. However, taking into account Belarus’ interest in the IMF loan amid the need to repay public debt, the authorities could accept such requirements.