May 9 – May 15, 2011

Stabilization loan

The situation has not changed
Stabilization loan

Last week the Finance Minister of Russia Alexei Kudrin said that Russia does not consider the allocation of a USD 1 billion loan from its budget and that Belarus could rely on the funds of the EEC Anti-Crisis Fund only ($ 1 billion in 2011-2013).

The Belarusian delegation departed for Moscow on 13 May to start technical arrangements for a loan agreement with the Eurasian Economic Community Crisis Fund for USD 1 billion.


What is behind this statement? On the one hand, it could be informational setting for Belarus on the eve of the visit of V. Putin. He can make a diametrically opposite statement and announce the speedy issue of the loan under certain conditions. In his statement Kudrin on behalf of Russia, for the first time voiced direct reference to the possibility and necessity of raising funds from privatization. There was no privatization in the country yet, because, again, the officials are simply afraid to go to the President with the price-offers made by investors.

Regardless of the fact that there are fewer objects atrracting Russian investors with every passing year, there are strategic assets that will always be of interest to Russians (Energy, Engineering, potassium, some infrastructure companies). It is possible that Russia named the price for a few facilities of their interest – $ 2 billion.

On the other hand, it could be a balanced strategic decision, which means that Russia is not going to throw money down the drain because of the lack of political will or crisis management skills of the current government. That is, Russia is consciously shifting from politics to economy and is not willing to pay for politics any longer (Belarus has already signed all the necessary documents). A possible demarche and withdrawal of Belarus from the integration projects with Russia, threatens Belarus with greater troubles.

At the same time, even small loans like this one are vital for the country. But, there are no grounds to believe that the country will get this money before the end of May, as the Belarusian government hopes, given the conditions for granting the credit were not agreed upon. The Russian-Belarus relations will be clarified next week, during Vladimir Putin’s visit to Minsk.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.

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