header -->

Belarus will not change economic policies

Category status:
April 22, 2016 18:39

The IMF mission has continued its work in Minsk. The Belarusian authorities do not hide their reckoning on the new loan. However, the IMF has not demonstrated much excitement about the Government and the National Bank’s Joint Action Plan for structural reform and improving economy’s competitiveness.

The Action Plan for structural reform was designed for external creditors, but its implementation depends entirely on the political will of the Belarusian leader. Belarus talks about a gradual transition to a market economy in order to improve its image among investors and creditors. However, de facto, Belarus carries on with its current economic policies, as President Lukashenko will not allow economic reforms ahead of the 2015 presidential campaign.

The Belarusian authorities are aware of the problems in the economy and understand the need to remedy the economic situation. While talking about the Government and the National Bank’s joint Action Plan, Finance Minister Maxim Ermolovich said, that “the Plan had to be developed due to the economic imbalance, rapidly increasing since early 2013”.

The Belarusian authorities seek to solve the economic problems by attracting new loans, without introducing significant changes in the economic policy. The scale of economic transitions (to meet the IMF requirements) will depend on the outcomes of negotiations about oil and other subsidies between Belarus and her Eastern neighbour.

Belarus regards Russian subsidies as the main source of financing. Unlike the IMF, Russia sets much less stringent requirements for structural economic reforms. In Belarus, economic policy depends on the election cycle (next peak in 2015). Therefore, Lukashenko is unlikely to agree on any reforms ahead of the elections and government and National Bank officials are well aware of this.

Belarus wants to demonstrate economic policy progress to the IMF and to receive a positive feedback, which would improve Belarus’ image in the eyes of foreign investors. For instance, Economy Minister Snopkov said, that “I do not want money from them [the IMF], I need a positive feedback, because positive assessment by the IMF is a positive sign for investors”.

In 2015, President Lukashenko will be the least willing to reform the economy. However, Belarus’ actions will largely depend on the outcome of negotiations with Russia about economic subsidies to Belarus. The Belarusian authorities would rather ‘cut down’ social benefits for population, than make fundamental changes to the economy ahead of the elections.

Similar articles

Minsk attempts to make up for image losses from military exercises by opening to Western values
October 02, 2017 11:49
Image: Catholic.by

The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.

Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.

Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.

In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.

Recent trends