Belarus external debt: Sustaining Levels in a Time of Global Crisis

This paper analyzes the sustainability of Belarus external debt and examines predictions for its growth. Concrete measures to optimize the structure of this debt are also investigated. Although compared to other Central and East European countries, the level of the current external debt of Belarus is relatively low, the structure of the debt, which is composed of mainly short-term trade and bank loans, makes the costs of its servicing high. In addition, growing exchange rate risks and increasing interest rates – both effects of the global financial crisis – make prospects for successful servicing of the debt uncertain.
The government can hardly do anything about the global crisis. But it can act to prevent dire scenarios from occurring; a situation which remains highly possible post-crisis. Simplification of registration procedures for businesses, the adoption of international financial accounting standards, swift actions enabling Belarus to enter the Eurobonds market and privatization are some of the concrete steps the government should take to ensure external debt does not overload the country's servicing possibilities and harms its economic standing abroad.

The paper is prepared with the support of the Belarusian Public Policy Fund. The content of this
publication is the sole responsibility of the author and does not necessary reflect the views of
the IPM Research Center or other institutions the author may be affiliated to.

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Pontis Foundation, BISS, IPM Research Centre