By Darya Bespyatova, BrusselsOn 4 June, Belarus secured a 3bn dollar loan from the Eurasian Economic Community (EurAsEC) that consists of 6 countries – Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.
The first transfer of 800 million dollars was made on 21 June; another 440 millions dollars will be transferred by the end of 2011. The spokesperson for the Russian Prime Minister, Dmitri Peskov, has stated that 800 million dollars will be allocated to Belarus in 2012, and the rest of the loan of 1bn dollars are planned to be transferred to Belarus in 2013, published AFP (Agence France Press) on its website on 4 June.
However, in return for the loan, Russia has demanded that Minsk not only carries out partial reforms to stabilise the macroeconomic situation, but above all that it should start privatisation. Under the present circumstances, the only real buyers of the vast majority of key enterprises in Belarus could be Russian investors. According to The Economist, M. Kudrin, the Russian Finance Minister, declared that Belarus had to perform privatisation waged at 7.5 bn dollars for the next three years. Thus, Russia's actions towards Belarus can be seen as a tactical-profitable approach. Russia could make a unilateral loan to Belarus, but has in fact chosen to do so under the banner of the EurAsEC to create the impression that this is a collective decision, part of a rescue plan for a member state (as happens within the International Monetary Fund). Moreover, the current loan is in no way sufficient to rescue Belarus’ financial system (according to calculations by independent Belarusian economists, approximately US$10 billion would be needed to fully stabilise the situation by the end of 2011).
It is possible to predict that within the next few months, Moscow will take advantage of the difficult situation in Belarus in order to achieve its own interests. As of this moment, the sale has been announced of a 50% stake in the Belarusian firm Beltransgaz (which owns Belarus’s gas pipelines) to Russia's Gazprom, which already owns half the shares. However, Minsk has made this transaction conditional on price discounts for supplies of Russian gas, which may postpone the signing of the contract. Later this year, Russia expects to sign an agreement to merge the Belarusian motor vehicle plant MAZ with the Russian KAMAZ. Furthermore, it will be important for Russia to obtain guarantees from Minsk, which will protect the rights of Russian investors in Belarus, says the Centre of Eastern Studies in its analysis of the current situation in Belarus.
It is necessary to take notice that nothing is predictable with Alyaksandr Lukashenka in power, and even well calculated Russian economic strategy might be left aside. Belarus has applied for a new billion dollar loan from the International Monetary Fund (IMF). The Government and the National Bank have asked the IMF for an extension of the stabilization loan, said Prime Minister Mikhail Myasnikovich in Minsk. He expects a loan of 3.5 to eight billion dollars (2.4 to 5.6 billion euros) over a period of three to five years. A potential IMF loan, however, is likely to come with equally stringent conditions for austerity measures and economic reform. An indication of that came in the IMF's most recent assessment, where the fund called on Minsk to take some "difficult decisions", claimed BBC News in a recent article. The situation is even more difficult when taking into consideration that Russia may limit the volume of its loans to Belarus if the state continues limiting the circulation of Russian media in the country, Russian Finance Minister Alexei Kudrin said on Thursday, 16 June 2011 to RIA Novosti. "The government of Russia is concerned with the Belarusian Administration's measures on repression and limitation of mass media from Russia," Kudrin said. The minister added that if cases of Russian media repression continue in Belarus, "we [Russia] preserve the right to limit financial support to Belarus."
At the same time Lukashenka, during his annual press conference to Belarusian state and regional media, warned that: "If it gets really bad, then we will close the borders and only purchase our own things, but I hope that we won't have to do that." The statement invoked yet another wave of harsh criticism from the Russian side. In addition, the international community is continuing to put pressure on Lukashenka through economic sanctions adopted towards Belarus by the European Union and USA.