Belarus has a chance to get a political loan from Russia – our country cannot get economic loans.
Belarus found itself at the verge of default – practically all independent experts state that bankruptcy is approaching us – this is why Belarusan authorities is rushing and trying to find foreign loans, negotiating both with Russia and with the IMF.
Belarus together with the Eurasian Fund for Stabilization and Development (EFSD) is leading a new rescue program of $3 billion; there is no talking about a new loan from the Russian budget, reported Russian deputy Minister of Finance Sergey Storchak. By this he disavowed his direct boss – the Minister of Finance, who told that Belarus asked Russia for a new loan of $3 billion and that the authorities are working on that.
At the same time Russian Sberbank announced that the level of gold and exchange currency reserves of Belarus as by June ($4.6 billion) cause alarm.
Do Belarusan authorities have chances for drawing new loans from abroad? What will happen if lenders refuse to help?
Stanislau Bahdankevich, former head of the National Bank, answers the questions of the “EuroBelarus” Information Service.
- According to the Russian Sberbank, by June the volume of gold and exchange currency reserves of Belarus was $4.6 billion, but over the last year it decreased by $1.8 billion. Reserves in foreign currency only make $1.7 billion. What does that mean?
- The stock of gold and exchange currency reserves has been at the level of $4.6 billion for several months already. The gold and exchange currency reserves consist of foreign currency and precious metals. The part of currency in Belarus’ gold and exchange currency reserves is extremely low – it should at least cover the current payments. In 2015 Belarus should pay $4 billion of debts, which means that exchange currency reserves should be at least $4 billion. Belarus doesn’t have it.
Such low level of gold and exchange currency reserves of Belarus is a hidden threat of default: we might not liquidate the external loan. We are not liquidating them and waiting that Russia will give us a three-billion dollar loan. But Belarus has nothing to pay for the debts out of its reserves.
- Belarus is discussing a new program of help for $3 billion with the Eurasian Fund for Stabilization and Development (EFSD). Do Belarusan authorities have chances to get loans for keeping the economy afloat in the near future?
- We have chances to get a political loan from Russia. Eurasian Fund for Stabilization and Development (EFSD) is Russian by more than 80%. Russia can issue a direct loan or it can give the money through the EFSD – this is the only chance for Belarus for the next 6 months.
- Are there internal resources at the expense of which the economy can be kept afloat?
- Internal resources are export, property sale, and introduction of privatization. We can sell “Belaruskalij” and get $10 billion to pay off debts – there are always such chances. But the sale of “Belaruskalij” will essentially damage the basis of the state.
Everything is bad. But taking into account that Belarus is a Union State with Russia and has finally tied itself to the East, I assume that Russia will issue a loan, debts will be paid off, so there will be no default.
- What if we assume that Belarus doesn’t get foreign loans?
- It means default: we need to announce that we refuse to pay off our debts. We can do without it, too: we can sell precious metals, gold, and pay off our debts. The most liquid part of the gold and exchange currency reserves of Belarus is currency: dollars and euros.
- If the situation will make authorities decide on privatization, which enterprises will be sold by auction?
- I don’t think it will happen. Russia will issue a loan in the name of friendship. Russia is interested in Lukashenka’s win at the elections; he is a little bit capricious, but Moscow understands that the caprices are not global – Lukashenka will never become really close with the West and will never introduce democratization. De-facto Belarus is an appendix of Russia; economically, the country isn’t a sovereign state.
That is why I am answering your question so confidently: Russia will help us since it will be rescuing Lukashenka; it will help us not economically, but politically. If Russia would really like to help it could give direct loans to the main funds of MAZ, MTZ, and “Atlant”. The loans that Russia is giving to our country are used for current expenses.