Belarus has abolished the position of IMF Resident Representative

Category status:
April 22, 2016 18:04

Following the World Bank, the IMF also minimizes cooperation with Belarus. This decision is explained by the fact that the Fund does not see any prospects in Belarus in terms of structural reforms in the economy. This means that Belarus will be under constant pressure of external financing gap, and the fragile macroeconomic equilibrium, available now, will be broken by the middle of the year because of attempts to increase revenue and accelerate the growth of GDP.

In early April, the IMF Resident Representative in Belarus, Natalia Kolyadina will receive a new assignment in the structures of the IMF. Along with the new appointment of Kolyadina the IMF eliminates the position of the Resident Representative in Belarus.

In spite of the ongoing rhetoric for years about the resumption of the cooperation program, the authorities of Belarus and the IMF have completely different ideas about what, how and at what speed it should be done. Moreover, the steady course of the country authorities to 5% GDP growth, higher wages, more and more intervention in the pricing – it all goes sharply at odds with the views of the IMF on how to recover from the crisis of 2011.

Revelations of the Chairman of the National Bank of Belarus N. Ermakova on January 30 certainly influenced the final decision on the futility of the IMF’s efforts. Ermakova said that Belarus hopes to negotiate with the IMF on a new loan in an amount sufficient to refinance the first loan, which repayment the country should begin this year. \\"Our proposal for negotiations with the IMF - a loan in an amount sufficient to refinance the first loan fund of 3.4 billion U.S. dollars\\", - said the head of the National Bank of Belarus Nadezhda Ermakova. d

Total debt to the IMF with interest now stands at 3.8 billion U.S. dollars.

In total, Belarus has to pay about $ 8 billion in 2013-2015, and $ 6 billion - in 2013-2014. At that payment in 2012 will amount to 1.63 billion dollars, including 563 million dollars for a partial repayment of the IMF loan, 122 million for maintenance of state credit of Venezuela ($ 500 million, involved in December 2008 for a term of 7 years) and 441 million dollars to service its Eurobonds along with servicing and repayment at the end of 2012 two-year bonds at RUB 7 billion, placed in the Russian Federation in late 2010. In addition to stand-by credit of the IMF in the amount of $ 3.6 billion, Belarus will pay its first Eurobond issue ($ 1 billion) in 2015. Thus, if Belarus can still pass 2012 relatively painless for its gold reserves, the payments in 2013-2014 will not be such.

It should be noted that the International Monetary Fund traditional review mission will work in Minsk from February 22 to March 6 in the framework of Article IV of the IMF charter, i. e. will be held the traditional annual review of the situation in the economy, which is conducted in all member countries of the IMF. In addition, the mission will hold a second post-program monitoring, and, in particular, the audit of the macroeconomic forecast for Belarus in 2012.

But, of course, in addition to the technical routine, all the talk one way or another will be built around the possibility of signing a new loan program. It is quite possible that the country authorities claim in the margins that there is no money to pay off the old debt, despite the public rhetoric about the sufficiency of funds. At the same time, the sanest representatives of the state apparatus understand the low prospects of success of this kind of blackmail, as well as a new loan on the conditions of Belarus.

The situation can be changed through a comprehensive program of reform. However, domestic and foreign observers are content with empty rhetoric so far, which is immediately divided on the concrete steps of the government or the statements of other actors. Thus, M. Myasnikovich has recently said that it is needed to revise the frozen state programs, and evaluate their effectiveness again, as well as restore lending to the public sector. Makei in his working trip to Baranovichi announced the upcoming regulations to tighten pricing, which in his opinion, will contribute to lower prices and inflation.

Taking into account these and other statements, it is clear that 1)it is extremely difficult to attract FDI in the current economic situation in Belarus  and the plan for their involvement will not be fulfilled;  2)it will be difficult to find facts for international investment and rating agencies  that will help them review the sovereign ratings of the country; 3) the IMF will continue to observe and monitor at the same time, continuing sluggish negotiations on a new program; 4) the country authorities will be under constant pressure of external financing gap; 5) the fragile macroeconomic equilibrium, currently available, will be broken by mid-year by trying to increase revenue and accelerate growth in GDP%; 6) Belarus will return to the serious and responsible discussion and negotiations with the IMF on a new program in 2013.

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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.

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