EurAsEC Anti-Crisis Fund continues pushing for reforms

Category status:
April 22, 2016 17:58

Single exchange rate of the Belarusian ruble, tightening of the monetary policy, as well as the resignation of Russian Finance Minister Kudrin – do not guarantee loans from the ACF. It implies that the Belarusian government has to continue fulfilling the conditions set by the creditor.

Experts of the Eurasian Development Bank (EDB), the fund manager of the EurAsEC Anti-Crisis Fund (ACF), worked in Belarus from 17 to 24 September, assessing the performance of Belarus against its obligations under the loan programme. Experts praised the progress in implementation of a series of reforms, part of the stabilization programme of the Government and the National Bank, but emphasized that “Belarus also needs to tighten its monetary policy. New loans issued on easy terms to support government programs drive up inflation and the government’s expenditures on subsidizing the interest rates. Maintaining interest rates at levels lower than the rate of inflation paves the way for excessive lending to the economy and increased domestic demand”.

Comment

“Belarus also needs to tighten its monetary policy. New loans issued on easy terms to support government programs drive up inflation and the government’s expenditures on subsidizing the interest rates. Maintaining interest rates at levels lower than the rate of inflation paves the way for excessive lending to the economy and increased domestic demand”

Regardless of the introduction of the single exchange rate of the Belarusian ruble, tightening of the monetary policy, as well as the resignation of Russian Finance Minister Aleksei Kudrin (who voiced consistent criticism towards the Belarusian authorities), the government will have to continue fulfilling its commitments – to raise interest rates to the level of inflation (87% during January – October 2011 period), to reduce concessional lending, to raise tariffs for the population, etc. The authorities cannot fail implementing these painful reforms, given the country’s treasury poor condition; the government cannot afford to neglect the following transfer of USD 445 million, in particular, given that $ 1 billion loan from Russia is still under consideration. The reforms in question imply deterioration of social problems.

Similar articles

Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

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.

Recent trends