Government is confident about the second installment of the EurAsEC

Belarusian authorities want to speed up the allocation of the second installment of the Anti-Crisis Fund of the EurAsEC regardless of non-fulfillment of a number of conditions. They are not trying to hide the fact that loans are needed to support the existing economic policies, i.e. not to implement reforms.

Belarusian authorities want to speed up the allocation of the second installment of the Anti-Crisis Fund of the EurAsEC regardless of non-fulfillment of a number of conditions. The second transfer of $ 440 million is planned for late October-early November. Minister of Finance Kharkovets said, “We have fulfilled a number of our obligations. At the same time … we have already started pre-consultations with the Fund about deviations from the agreed conditions. These deviations are of a technical nature, we have explained them, they allow for negotiation and refinement of these positions”.

“We have fulfilled a number of our obligations. At the same time … we have already started pre-consultations with the Fund about deviations from the agreed conditions. These deviations are of a technical nature, we have explained them, they allow for negotiation and refinement of these positions”.

Kharkovets reported that, first of all, these deviations concerned the non-compliance with a requirement to achieve a single exchange rate of Belarusian ruble. “However, my understanding is the following. If this requirement is fulfilled at a later stage, we should be able to expect that it is assessed as implemented, though with a delay. And it will not be an obstacle for continuation of implementation of our agreements”, explained the Minister. “There are always adjustments to any loan [agreement] during its implementation, because there are circumstances that need to be either overcome, or taken into account”. Minister Kharkovets did not say what other obligations vis-?-vis the ACF of the EurAsEC the Belarusian authorities failed to fulfill due to “technical nuances”, however he expressed hope the issue of transfer of $ 440 million would be considered by the end of October.

Comment

The Belarusian authorities continue with the bad practice of working with the creditors: the conditions set for the IMF loan in 2009-2010 partially have not been implemented (establishment of the Development Bank, privatization, etc.) and some of them were broken immediately after the last transfer (increased wages of state employees, money issue to credit the economy). Concerning the EurAsEC loan, the authorities failed to eliminate the multiplicity of exchange rates, and a number of other requirements, namely, the increase of the proportion of compensation for utility services tariffs and public transport costs, reduction of the state support to enterprises, etc.