Are IMF's loan requirements to Belarus sensible?

Are IMF's loan requirements to Belarus sensible?

President Lukashenko constantly orders to look for new markets in new regions of the world. Not only for milk products. Belarus does have some potential here. This is confirmed by the conclusions of experts of all kinds and ratings. At times, these ratings due to some tasks.

The Belarus President this week held a meeting in Minsk to discuss the possible IMF loan.

Belarus and the IMF, over the past six months, have come very close to a new $3bn loan. This spring the IMF gave Belarus a list of reforms the country needs to carry out. In the autumn, in New York, Alexander Lukashenko held talks with IMF Managing Director Christine Lagarde. Recently, Minsk was visited by a special mission of the IMF.

Belarus can again take advantage of the financial support as did many other countries - the US, South Korea, Indonesia, Brazil, Russia, Serbia, Poland, and Kazakhstan. All in all, IMF loans have been issued to 35 states.

Alexander Lukashenko, Belarus President:
We will only perfect what we have now. We will do this only if we are sure that people will be able to pay higher utility bills. If we are talking about privatization, then this must be a pure, honest, open, and most importantly - competitive privatization. Everywhere there should be competition, including in the privatization of an enterprise.
If we say that we need to raise the retirement age, as the IMF urges, we need to do it and I have already named reasons for that, even before the presidential election.

Six years ago Belarus successfully implemented the stand-by program in the amount of three and a half billion dollars. This helped Belarus mitigate the effects of the external crisis.   

Alexander Lukashenko, Belarus President:
We must act in the interests of our own people. And if the IMF does not support us, this is not a tragedy. We will continue to work with them, or not work at all. I want to say that the main thing is our people and our state. From this we should proceed.

The Lagarde Revolution is a new trend in the work of the IMF. Chinese Yuan was included in the list of IMF reserve currencies this week. A is a sort of a hint to the US dollar that not everything depends on the greenback. Including ratings. The Chinese, tired of tolerate and injustice, founded his own agency to assess the state of the Chinese economy. On the other hand, the United States: even in difficult conditions agencies still rate the USA with the highest rating a solid AAA.

Politics in action: recently, Fitch has raised the rating of Ukraine from restricted default to high credit risk. And note that it happened after the statement of Prime Minister Yatsenyuk that Ukraine would not repay the $3 billion loan to Russia, at least not in the nearest time.

The Belarusian rating of Standard & Poor's is just a notch higher than the Ukrainian one. Is the situation of the two countries comparable? No, but Ukraine will not survive without an IMF loan. And to give one, a country needs to feature in a rating. It turns out that it's not about reforms? It is, especially when a country wants to develop. The example of changes in the structure of the Belarusian economy is vivid. 

Vadim Iosub, Alpari senior analyst:
What did the economy sell 10-15 years ago? Electronics, TVs, machine tools, equipment, tractors, trucks and so on. If you look at today's economy, petroleum products and potash fertilizers have the largest share in our export.

What is Belarus in international ratings? Frankly speaking, it looks different. In the Gallup's, Belarus is richer than all CIS countries and the majority of Eastern Europeans. According to other estimates, it is poorer than Moldova.

Rating, compiled by Credit Suisse, is an example of how you can't count and compile ratings, experts say. $1,500 dollars are very different. $1,500 in a country where state-owned property is rare and where the state finances medicine and subsidizes housing, education and public transportation is completely different money.

The Gallup rating paints a very different picture, which may not be entirely accurate but is very pleasing to the eye.

Vadim Iosub, Alpari senior analyst:
Our nearest neighbors are Slovakia and Croatia. And, indeed, here Belarus is higher than many European countries and the CIS countries, countries of the former Soviet Union.

The Gallup's rating is based on data from telephone interviews, that is how respondents themselves perceive their own income. Belarus has quite a high level of social equality. The difference in income between the richest 10% and the poorest 10% is 6 times. In Russia, the figure is 30-40.

Georgy Grits, deputy director of the Center for Contemporary analysis and Strategic Studies, National Academy of Sciences:
If we have managed to keep this social equality isn't is a success? I believe this is an achievement. Our infrastructure (I do not want to compare with Ukraine where war is still underway, let us compare with the Baltic states and Russia)... I believe that this achievement. If you are looking for a black cat, you'll find it. If you are looking for a glimpse you will find it too. I think we need an optimistic message here.

Perhaps the most famous rating is Doing Business, which assesses the business climate in 189 countries. To be among the top 30 - this task was set by the President. In 2015, Belarus rose by 13 positions and settled in 44th place.

Georgy Grits, deputy director of the Center for Contemporary analysis and Strategic Studies, National Academy of Sciences:
The same Doing Business, yes, we are heading in the right direction. But let's not exaggerate it. Who is today the leader, at least the driver of the global economy? This is China. Where is China in the Doing Business? Somewhere around 80th. But they don't overexaggerate it.

The government is responsible for the stable foundation on which each Belarusian works. But it's hard to argue with the IMF's pragmatic motives.

Andrei Kobyakov, the Prime Minister of the Republic of Belarus:
The IMF's conditions are $3 billion, at 2.28% per annum for 10 years.

Alexander Lukashenko:
This is a good loan, I asked exactly this. And the interest rate is good. Neither Russia nor anyone else can give us loans under this very interest rate.