Mikhail Chyhir: Russian loan to be spent on support of Belarusian ruble’s exchange rate

Belarus spends its loans on eating them away, though it would be more effective to use them as investment resources.

The government of Russia has approved the draft agreement on granting another loan of $1 bn 550 mln to Belarus. How acute the need of the country to receive this loan is? Could we be sure the country would make the most of it? These questions have been addressed by ucpb.org website reporter to the former Prime Minister of Belarus Mikhail Chyhir.

“Russian loans are offered at a low interest rate, and naturally it contributes to the economic development of Belarus,” Mikhail Chyhir believes. “But the negative thing is that those loans are mostly spent on support of the exchange rate of the national currency. That is, they are eaten away. Little good will come of this. But if it were not for these loans, Belarus would not be able to support the exchange rate of its national currency by its own resources. It is bad.

It would be a different story if the loans could be used as an investment resource. It would be great. Something should be done. A program on cutting import and increasing export has been adopted, but to my mind, it had been adopted not in a completely correct way, it does not meet the needs. And even this program is not being implemented.”