No possibilities to refinance the IMF loan, hopes for EurAsEC Anti-Crisis Fund
An IMF mission will be working in Minsk from 18 October until October 2012 to conduct the third post-program monitoring.
In 2013, Belarus will have to repay about USD 2.9 billion in foreign debt settlement. Major repayment will be addressed to the IMF. This debt is not subject to refinancing, while according to IMF estimations, the current account balance in 2013 will not allow Belarus to refinance it independently.
On October 9-13, the Belarusian delegation participated in the annual session of the Council of the Executives of the World Bank and the International Monetary Fund. After the meeting, the Ministry of Economy announced that cooperation with IMF would only be limited to consulting on technical support for Belarus. No new loan program is planned.
According to IMF forecasts for 2013, Belarus’ current account balance will be negative and will account for 5.8% of the GDP. In this situation, Belarus will not manage to independently refinance a debt of USD 2.9 billion.
Belarus has made efforts to refinance the foreign debt through borrowing from the domestic market. The first transaction on Belarus foreign currency bonds amounting to USD 100 million was carried out by Bank BelVEB. On October 17, it announced that it invites egal entities to invest in foreign currency bonds for a period of 3,5 years in the amount of USD 150 million. The potential investors can offer their own rates and the Ministry of Finance will choose the most competitive offer. In these conditions, the remaining tranches of the loan from EurAsEC Anti-Crisis Fund are the largest and most likely resources to refinance the existing debt.
However, obligation of the Belarusian side stated in the letter of intent will not be performed to the full. Most crucially, it needs to fulfill an obligation to sell state assets of USD 2.5 billion by the end of 2012. Currently, there is no single realistic transaction which would account for fulfilling this obligation. In this regard, allocation of new tranches of the loan is not evident and will most likely be postponed, since growth of pressure in the foreign exchange market will force Belarus to take a more active stance in negotiations on certain assets.
Thus, in the situation when the Belarusian authorities have limited external foreign currency earnings and are pressed to repay foreign debt, they will have to make concessions regarding terms and conditions for privatization of state-owned property by Russian investors. Otherwise, the tranches of the EurAsEC Anti-Crisis Fund loan will be postponed for an uncertain term.
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.