Stanislau Bahdankevich: “Belarusian Regime Fears Economy Collapse” :: Charter'97 :: News

Belarusian government has asked Russia for $1.5 billion stabilization loan. As Belarusian Finance Ministry explains, a decision about a loan is caused by a necessity of additional financing of the budget expenses caused by a hike in oil and gas prices. Two weeks ago Finance Ministry stated their intention to place bonds, primarily in Russia, to receive foreign loan of up to $1 billion. Belarusian economists do not understand the aim of this credit completely. To their mind, energy price hike does not give grounds for such huge credit financing. “These moves of the government are incorrect. They could be based on some fear for the future, that some collapse hike could follow. The hike could be caused not only by energy resources hike, but by extremely high prices. A little has been done in recent years, that is why a crisis aggravation is expected,” a former head of the National bank of Belarus Stanislau Bahdankevich said in an interview to Deutsche Welle.

As underlined by him, he does not understand why this lending is needed:

“If enterprises took this money for concrete projects, I would understand the aim. What’s the use in that? I do not understand such actions at all. And secondly, if our government’s debt is 850 million dollars, why we should double or triple it over one year. What could it bring about?”

According to the economist, the head of Mizes center Yaraslau Ramanchuk, “there is nothing wrong in borrowing. The bad thing is that these credits could be high-interest”. The economist believes that Belarus cannot be picky now. As a result, “in 2-3 years from a country with very low foreign debt Belarus could turn into a county with a problem of a foreign debt”.

Ramanchuk thinks that foreign loaning is not correct.

“Government activities show that it estimates the state of our economy inadequately. It has received an order to find money, but hasn’t explained Lukashenka that it would be better to earn money through foreign investors’ attraction, through privatisation, standard market reform, including guarantees to private property,” the economist said.

Besides, as said by Ramanchuk, the danger of such a considerable Russian credit is that Russia could insist on political dividends, not only financial ones.