IMF to take preliminary stock
Preliminary assessment by the IMF experts of the implemented and projected arrangements of the Belarusian economic policy, looks little promising. Most likely, at this stage talks about a new IMF loan to Belarus will end in vain.
The International Monetary Fund (IMF) mission is expected to arrive in Belarus in the second half of February. The IMF Resident Representative in Belarus Natalia Koliadina said, the IMF mission will revise Belarus’ macroeconomic forecast for 2012 and the following five years, review the recent economic policies and analyze economic policy arrangements for 2012.
The IMF permanent representative in Belarus Natalia Koliadina said that the IMF experts could not discover sources that would allow Belarus to increase its GDP by 5.5% in 2012. Mrs. Koliadina also expressed concern about attempts of the authorities to resume administrative control of the economy.
The IMF Resident Representative referred to tightening of the monetary and fiscal policies as positive measures implemented by the Belarusian authorities. According to the IMF, “for the first time one of the main objectives of the monetary policy is to reduce inflation”. However, unjustified increases of incomes for the population, without proper adjustment with the level of production growth, could result in the unwinding of the inflationary spiral. Mrs. Koliadina also pointed out that funding of state programmes via commercial banks still continued, regardless of the creation of the Development bank, which funded the majority of the programmes.
Mrs. Koliadina refrained from comments on the negotiation process for a new loan to Belarus. “I have no new information about the intentions of the Belarusian authorities in this regard”, she said. In 2009-2010 the IMF Stand-by programme was implemented in Belarus, when it received a USD 3.6 billion loan. In December 2011 Alexander Lukashenko said he would not oppose to having a new loan from the IMF in the amount of USD 2.5 -5 billion.
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.