In 2011 Belarus’ foreign debt increased sharply
The country’s economic policies are based on borrowings and sales of state property. If external debt rate continues to grow, the means to attract new loans will reduce along with the value of property put up for privatization.
The only option for recovery is to attract FDI for new businesses and projects however any significant improvement of business climate under the current political and economic conditions is impossible.
Belarus’ foreign debt in 2011 increased by 3.9 times and on 1 January 2012 amounted to Br 111.9 trillion. Domestic debt increased by 3.5 times and reached Br 32.3 trillion. The external public debt - GDP ratio in 2011 increased up to 40.8% from 17.1% on January 1, 2011. The total public debt of Belarus – GDP ratio in 2011 reached 52.5%. The external debt secured by the central government had the highest growth rate in 2011, i.e. it increased by 8.1 times, up to Br 13.4 trillion.
Such a significant increase in external debt in 2011 was due mainly to the devaluation of the Belarusian ruble, and the corresponding decrease of the GDP of the country. Calculated in USD, the external public debt of Belarus in 2011 increased by 1.38 times and reached USD 13.4 billion on January 1, 2012. Regardless of the fact that currently the external public debt ratio is still below the level recommended by the World Bank (50%), the irreversible trend of growth of debt is disturbing and threatening. With the increasingly aging capital stock and technologies, the only way for the authorities to stimulate the economy is to pump it up with emission money and as a result, face with the devaluation, slowed-down GDP growth and a sharp decline in the living standards. Bearing in mind the upcoming parliamentary elections, a sharp reduction of budget expenditures and tightening of the tariff policy for the population are merely feasible. Therefore, the country is doomed to a vicious circle of fallacious economic policy and increasing domestic and external debts. In 2012-2014 the government should repay more than USD 6 billion of debts, which is impossible without major new borrowings. That makes the country’s position vulnerable in the long run.
During searches of social and "green" activists and anarchists, law enforcement has seized computers, mobile phones and publications. The authorities have also exerted additional pressure on supporters of unauthorized street protests and independent lawyers, who represented defendants in the White Legion case. The security services have stepped up the persecution of opponents before the street protests announced by the opposition. Apparently, the Belarusian authorities aspire that participants in street protests would reduce in number and that the low interest of the population to socio-political agenda before the local election campaign would retain.