That will choose a dictator, remained without Russian money?

On 25 October the Minister of Finance Maxim Ermolovich has made several statements about foreign loans. He said that the demands of Russia were not referred, and generally “needed some political loans absolutely not”.

On the other hand the Finance Minister said that Belarus expects to end the year with a Chinese loan of $500 million At the same time, any details about the terms of the loan are not reported.

Finally, Ermolovich said that the implementation in Belarus a road map of reforms the world Bank will require some financial support.

Experts explained UDF.BY what are the pitfalls of these statements.

“Chinese money is called, do not cross the border of Belarus”

Senior analyst “Alpari” Vadim Iosub reminded that the Belarusian authorities asked Russia a loan of $600 million since last year.


“But judging by the statements of Minister Ermolovich, at some point, to ask stopped, new filings are not filed. The fact that Russia, linked the results of different loans with the processes of the so-called greater integration. That is, in fact, decided to exert political pressure,” said Iosub.

Will the terms of the loan to China just as reasonable as the Russians?

“Previously, Belarus is quite often used by Chinese loans, but it was always fundamentally different conditions. Loans to Russia were unrelated, Belarus could dispose of money at own discretion. Most often they were going to repay a debt to the same Russia. China gave loans associated (at least in large amounts): pre-negotiated, where the money is going, and most of them were paid for the use of Chinese technology, equipment, components, and even the labor of Chinese workers. In these cases, the money is called, do not cross the border of Belarus – went to pay for Chinese suppliers, contractors, etc.” – said Iosub.

Senior analyst “Alpari” noted that earlier briefly mentioned that the Chinese loan may become an alternative to Russian.

“But a clear statement that this would be an unrelated loan that the money you can dispose of as you wish (for example, to extinguish the old debt), was not” – said Iosub.

With regard to the statement of the Minister of Finance on the road map of reforms, the expert believes that it means little.

“The Minister Ermolovich can be quite sincerely committed to reform, but it takes the go-ahead of the President. Theoretically, the lack of money from Russia may move to the head of state in the direction of the reforms – above all, we are talking about inefficient public sector enterprises, sharing their “bad” part. We need to stand up and say that the “effective Belarusian model” was a failure, we admit to mistakes, and will do everything differently. To be honest, not sure that the head of state is ready to such statements,” – said Iosub.

“In the world clearly understand that Minsk can only work on the road map. Step did you get the money”

Economist LEU Marholin said: when Russia began to put additional conditions for the loan, the Belarusian authorities have decided that the price would be too high.


In this situation, the desire of Minsk to the Chinese credit okay.

“In international practice loan rates are quite low. The question is whether China considers Belarus as a reliable borrower and if he needed it? China always wants to get something in return. But I would not rule out that the parties agreed on terms that are acceptable to the Belarusian authorities,” said Margolin.

With regard to cooperation with international organizations, it all depends on whether the government convincingly Express the arguments of the head of Belarus.

“Count on the fact that international organizations will give something under the promise, is not necessary. They have 25 years of experience with the Belarusian authorities and clearly understand that Minsk can only work on the road map. Step did you get the money. One more step – get. Not made the step, you get nothing. But Lukashenko understands that any deep systemic reforms are a threat to the regime of his personal power. So it all depends on the credibility of the government”, – the economist believes.