The IMF has increased its assistance to Belarus by one billion dollars to help it weather the greater than expected impact of the financial crisis, bringing the country’s total loans to 3.
5 billion dollars.
The assistance provided by the International Monetary Fund amounts to seven percent of
Belarus’s gross domestic product, the Washington-based institution said in a statement.
The original agreement in January provided for the disbursement of 2.5 billion dollars but Belarus’s economy “has been hit hard by a fall in external demand and volatile cross-currency movements since the program,” said the IMF.
Increased aid comes in return of “stronger efforts” by Minsk “to liberalize the economy and prepare for privatization, which are essential to improve prospects for long-run growth and external stability,” said IMF deputy managing director Takatoshi Kato.
The revised program requires “concrete steps” for the authoritarian former Soviet bloc nation to loosen the state’s grip on the economy, and even the establishment of “a privatization agency capable of advancing an ambitious privatization agenda,” Kato said in a statement.
The loans also include the requirement of legislative changes to boost the central bank’s independence, reduce control over prices and wages, and remove mandatory production and employment targets for private companies.
The institution added that the efforts of Belarusian authorities to pursue a balanced budget for the general government in 2009 despite lower projected revenue was “commendable, as is the prudent plan to postpone public sector wage increases.”
The Fund’s board Monday also authorized the immediate disbursement of 679 billion dollars, bringing total disbursements under the program so far to almost 1.5 billion dollars.
Global credit crunch
Officials in Minsk said in January that the IMF loan was needed to make up for lost export
revenues because foreign countries were having trouble paying for its goods amid the global credit crunch.
The United States, by far the largest voting power in the 185-nation institution, has branded Belarus “Europe’s last dictatorship.” But US officials have stressed that relations are improving.