No IMF credit for Belarus in 2012
Head of the IMF mission in Belarus Chris Jarvis said that the allocation of a new loan for Belarus depended on the willingness of the authorities to reform the country and on the position of the member countries of the Fund.
He emphasized that the IMF considered Belarus as solvent, i.e. able to repay the debt to the IMF and other external creditors on time.
The opinion of the IMF was not unexpected, since the Fund’s position was always unequivocal and transparent. The IMF put forward significant conditions for a new loan, in the first place, the implementation of structural reforms. However, the attitude of the Presidential Administration about reforms is well-known. That is why the IMF representative said diplomatically, that “Program negotiations would require an agreement among all policy makers, including at the highest level”. Chris Jarvis also did not deny a politically motivated intrigue with a new loan, “We would also need to be confident that a new program would be supported by the IMF s membership”.
At the same time, the IMF did not say a final and irrevocable “no” to Belarusian attempts to receive a loan. Mr. Jarvis said that, given the low reserves, Belarus could nevertheless attract new loans. At the same time, he clearly stated that the IMF will not get involved in the refinancing of the old loans, but “considers the balance of payments in general”. All in all, the position of the Fund is as follows: basically, we do not mind, however firstly you need to this, then that… and even if you meet all these requirements we cannot guarantee anything.
At the same time, this loan would be of extreme importance for Belarus: in terms of meeting the obligations within the old debts, and in terms of saving its reputation vis-à-vis other countries/investors and international organizations. Today all policy makers of the country understand this, except Mr. Lukashenko.
Gross foreign debt of Belarus in 2011 increased by USD 5.627, or 19.8%, and on January 1, 2012 amounted to USD 34.028. At the beginning of 2012, the gross external debt reached 62.3% of the GDP against 51.6% of GDP on January 1, 2011. Gross external debt per capita on January 1, 2012 increased by USD 600, or 20%, to USD 3595 against USD 2995 on January 1, 2011. According to the National Bank of Belarus, over the last year USD 6.321 billion has been spent on servicing the external debt, accounting for 11.6% of the GDP, or 13.5% of exports of goods and services. Out of that amount, USD 5.405 billion was spent to repay the principal debt and USD 0.916 billion on interest payments.
Yet Minsk has not decided on the "patriots' case" and is attempting to break new grounds in relations with the West. Meanwhile, Brussels is ready to lower cooperation levels with the Belarusian authorities in anticipation of new political prisoners to appear after the trial against former White Legion activists, irrelevant of the charges, either preparation for riots, or creation of illegal armed groups, or any other. Minsk is unlikely to cross the red line in bilateral relations with the West and new political prisoners are unlikely to appear in Belarus.
The harsh clampdown on protests and arrests this spring in Belarus are unlikely to lead to new moves by the European Union, however, the EU would closely monitor ‘some investigations’, including the ‘patriot’s case’ aka the ‘White Legion’ case.
According to human rights defenders, 17 people remain in custody, of which 16 are former members of the White Legion and one supporter of Statkevich-led the Belarusian National Committee, Sergei Kuntsevich. The law enforcement has been releasing former activists of the White Legion and members of the Patriot Club, most likely in order to mitigate criticism from Western capitals. Amid Minsk Dialogue expert conference with the participation of Belarusian and EU officials, the authorities released from custody head of the Bobruisk "Patriot" Club Nikolai Mikhalkov. In addition, the Belarusian leadership expects to ease some tension by demonstrating greater openness to a dialogue with civil society on human rights issues. For instance, for the first time the Belarusian authorities and human rights defenders held consultations on Belarus’ fifth periodic report to the UN Human Rights Committee.
The Belarusian leadership has attempted to mitigate the West’s attitude towards the criminal prosecution against former activists of the "White Legion" by adding charges of creating an ‘illegal armed formation’ to ‘preparing for mass riots’ charges.
Apparently, Minsk also gains from speculations about possible disagreements among the executives - supporters of stronger ties with Russia, and "pro-Western" reformists lead by Foreign Minister Makei. That said, the Presidential Administration and President Lukashenka have full control over the foreign policy agenda and the law enforcement.
Overall, Minsk is determined to develop relations with Western capitals. The Belarusian authorities are likely to take controversial actions, i.e. to demonstrate the desire for liberalization in some areas and occasionally tighten repressions against the opponents, however without creating new political prisoners.