Bloomberg News

IMF Says ‘Premature’ to Discuss Belarus Aid During Mission Visit

October 03, 2011

Oct. 3 (Bloomberg) -- The International Monetary Fund won’t negotiate a new financial-aid package to Belarus during a visit this month by the lender’s mission to the capital, Minsk.

“At the moment, it would be premature to speak about the possible volume of hypothetical IMF assistance for Belarus,” Natalia Koliadina, the lender’s resident representative in the country, said in a phone interview from Minsk today.

The former Soviet republic, which received $3.5 billion from the Washington-based fund in 2009, requested a new stabilization loan in June to help overcome a balance-of- payments crisis that forced a 36 percent devaluation in May and a further 38 percent decline last month after the authorities allowed the national currency to trade freely.

The government is seeking as much as $7 billion from the IMF, Belta said today, citing First Deputy Finance Minister Vladimir Amarin. The lender urged Belarus to show “commitment to strong policies and structural reforms” before it qualifies for more financial aid, according to a report published Sept. 13 after talks with Belarusian officials that concluded Aug. 29.

The IMF mission, led by Chris Jarvis, will work in Belarus Oct. 5-17, Koliadina said. Reaching an understanding on the country’s macroeconomic framework with the fund would facilitate a new program of assistance, Koliadina said, adding that fiscal tightening and recent increases in interest rates are steps in the right direction.

Introducing a “unified” exchange rate later this month will help stabilize the foreign-exchange market, Koliadina said.

IMF Pressure

Belarus has come under pressure from the IMF to reform its political and economic system and release political prisoners. The unsettled political situation, including political prisoners, the breakup of protests by force and western sanctions against the government, are among risks to the country’s economic outlook, the lender said Sept. 13.

President Aleksandr Lukashenko on Oct. 1 freed Dmitry Uss, a presidential candidate in last year’s elections, on “humanitarian grounds,” two weeks after pardoning 11 political prisoners convicted of protesting the December ballot.

The Belarusian leader previously released 13 people sentenced for organizing and participating in mass protests during the elections. Four remain in prison after the Oct. 1 announcement, including two opposition figures, Andrei Sannikov and Nikolai Statkevich, who competed against Lukashenko last December.

Belarus left the Eastern Partnership Summit, a European Union conference with eastern neighbors held last week in Warsaw, citing decisions from the gathering touching on Belarus as “not legitimate,” the Foreign Ministry in Minsk said.

Chancellor Angela Merkel called for the release of political prisoners and intensified EU sanctions against the country. EU leaders attending the meeting issued a statement expressing “deep concern at the deteriorating human rights, democracy and rule of law situation in Belarus” and called for the release and rehabilitation of all political prisoners.

--Editor: Paul Abelsky, Andrew Langley.

To contact the reporter on this story: Aliaksandr Kudrytski in Minsk, Belarus at akudrytski@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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