Foreign Debts: a New Curse or Blessing?

By Kiryl Haiduk

Does growing foreign debt create a new economic context in Belarus? The repercussions of growing foreign indebtedness are not yet clear-cut despite almost a twofold increase in foreign indebtedness over a year. However, some trends begin to appear. First of all, growing foreign indebtedness is very likely to spur additional liberalization measures, including opening the routes towards FDI inflow. Since Belarus is only entering ‘the borrowing business’ so, for that matter, there is a range of policy options of how to cope with it. Ultimately, the choice would depend on the export dynamics and also on the configuration of Belarus-Russia relationships now heavily diluted by gas price.

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