The economy of free fall

Society
Belarus applied to the IMF for a loan of $ 8 billion. Possible scenarios analyzes commentator of Radio Liberty / Free Europe Robert Kolsan.

Belarus applied for help to the IMF in the context of inflation, as measured by double digits, the loss of foreign exchange reserves and a deep devaluation. Recently, Russia gave Belarus via EurAsEC anti-crisis fund loan of $ 3 billion, conditioning is the privatization of some key Belarusian industrial assets.

The current economic crisis Belarus was called as rising prices for Russian energy and the populist policy of generous public spending, which Lukashenko spent last year on the eve of the presidential election.

Matthew Rozhansky deputy director of the Russia and Eurasia Program at the Carnegie Endowment, said that the IMF can provide assistance to Belarus, but the conditions have to be tough:

"Aid is possible, if necessary will be exhibited non-political conditions. But I believe that the IMF should adopt an approach that in some ways, similar to that applied EAEC, demanding action first, and only then giving the money. It would be foolish to do otherwise, given the conditions Lukashenko without even the first tranche, which he could use for short-term survival or to maneuver in the search for alternative sources without the necessary reforms, "- says Rozhansky.

The IMF mission concluded its visit to the country on June 13. She Lukashenko warned that if Belarus hopes to help the country to be implemented structural reforms. Lukashenko dilemma describes well the message header agency Bloomberg: «Lukashenka has to choose between control over Belarus and assistance of the IMF."

Chris Jarvis

The head of the IMF mission in Belarus Chris Jarvis said at a press conference in Minsk that the new aid from the Fund will depend on the "strong program". "We also need to be sure that all the responsible person — the president, the government and the National Bank — dedicated to this program," — said Chris Jarvis.

Something that hinted the IMF representative, is a long-standing problem in the country, of which 17 years by Alexander Lukashenko. Former presidential candidate Yaroslav Romanchuk said about the decision-making in the Belarusian authorities following:

"And in a national bank, and the Ministry of Finance have qualified professionals. I have spoken with many of them and they say: "We are preparing good papers, but then the presidential administration issues orders or orders that contain a completely opposite things."

The economic situation is increasingly becoming a political issue for Lukashenko. In addition to the harsh repression against the opposition, which began in December last year and caused resentment of the West, the government started to use force to suppress the protests triggered by the crisis. June 12 on the border with Poland riot police forces was stopped drivers demonstration protesting against new restrictive rules of export goods abroad.

Anders Aslund

Economist Anders Aslund from the Institute for International Economics in Washington, said that the crisis in Belarus is to the neighbors more political than economic problem:

"Belarus is not as important to its economic crisis could spread to other countries in the region — said Aslund. — Belarus is very close to Russia, and Russia can easily prevent the spread of the Belarusian economic consequences of the crisis. Effect if you will, that in the political sphere. Events in Belarus as the "Arab Spring" could spread to Ukraine and Russia, because Lukashenka can not rein in these political processes. "

According to Aslund, the current crisis in Belarus is very similar to the collapse of the Soviet centrally-controlled economy.

Matthew Rozhansky agrees that the current economic crisis is probably the beginning of the end of Lukashenka's rule, but avoids saying that the departure of the president is inevitable. Analyst urges the West and Russia already start planning policy in Belarus since Lukashenko.

He says, although Russian oligarchs and tend to buy Belarusian industrial assets at low prices, long-term interests of Moscow in the region like Western interests:

"We also need to talk with Moscow. Our main interests — Washington and Brussels on the one hand, and Moscow on the other — are no different. We can agree on the fact that we do not want a humanitarian crisis in Belarus. We can agree on the fact that in a real political instability in Belarus, we do not want violence. Even if we agree that what should end this instability, we do not want it to lead to animosity between us, as it was in Georgia in 2008, "- believes Rozhansky.

Like this post? Please share to your friends: