IMF Loan as a Prepayment for Political Prisoners?
Political prisoners in Belarus
The Belarusian government and the National Bank of Belarus recently applied for a stabilization loan from the International Monetary Fund. Prime-Minister Miasnikovich noted on 1 June 2011 that Belarus expected to receive USD 3.5 – 8 billion from the IMF. The Minister of Finance Andrei Kharkaviets stated the program had been scheduled for three years in general.
The Belarusian authorities cherish quite well-grounded hopes to get the IMF credit in the long run. They believe the USA and the EU may become concerned about Lukashenka’s moves towards Russia and support the independence of Belarus. Some share this opinion.
According to an article in Financial Times published on 2 June 2011 "the Lukashenka regime will not last forever, and Western countries have a long-term interest in supporting Belarus’s freedom. An IMF programme, properly designed and implemented, would contribute to this goal.” The authorities like the idea of getting an IMF loan as a payment for independence of Belarus.
The West failed to convince Lukashenka that he will not receive any money without liberation of political prisoners. Therefore, the Belarusian authorities do not demonstrate any positive changes in their attitude towards opponents. There are plenty of examples of that.
A political prisoner Mikita Likhavid, sentenced to three years of imprisonment, was placed to a lock-up on June 9, 2011. It was done for the third time since the trial. Previously, he had spent 10 and 15 days in the punishment cell. The Panel of Judges of Minsk Economic Court rejected an appeal, submitted by the Belarusian Popular Front Party leadership against a decision to deprive the political party of its rented premises. Not only the oppositional political parties, but also all Minsk-located civil initiatives will lose the opportunity of holding their events at a quite convenient venue in the city center of Minsk.
At the same time, Lukashenka does not rule out the possibility of facing certain political pre-conditions for getting the IMF credit funds. It is quite evident to him that the credit extention will firstly depend on the liberation of political prisoners in the country. “We don’t nourish any illusions at all. We’ve done twice as much as the IMF wanted us to do. We’ve done all that. I don’t rule out the presence of some political component there. Actually, I fear the US and the European Union may block these loans. Let them do this! We will survive. I may take a decision to abandon other credits in July as well. Therefore, we will thank them very much if they help. If they don’t, it will be only due to the political component,” Lukashenka said on June 17, 2011.
Lukashenka delivers contradictory statements quite often nowadays. Thus, on June 17, 2011, he said there was no crisis in Belarus. At the same time, he was talking about the anti-crisis measures which the Government was preparing. Having analyzed Lukashenka’s statements, one may come to a conclusion that he hints at liberation of political prisoners on receipt of credit funds from the International Monetary Fund.
Lukashenka stated repeatedly he might liberate the political prisoners: “We won’t keep them in this prison. It is too expensive. It is too much honor for them to sully the jails. Decent people serve their time there.” In Lukashenka’s opinion, if he meets the West halfway and releases the political prisoners, it will look like a manifestation of his weakness and as a concession to the pressure from the West. Therefore, among other, Lukashenka is eager to see the West meeting him halfway and giving him money first. “Help us, but don’t make humiliating terms! “Hey, release the political prisoners!” they say. We don’t have them. If there appears a clemency plea, I will consider it indeed. We aren’t bloodthirsty,” Lukashenka emphasized.
It is obvious that Lukashenka regime makes use of political prisoners for bargaining. He keeps to the ‘money first’ principle and suggests the West should make a prepayment.
Andrei Liakhovich
Andrei Liakhovich is a contributing author. He directs the Center for Political Education in Minsk.
Will Russia Provide More Loans to Lukashenka?
The Eurasian Economic Community (EurAsEC), a post-Soviet economic bloc led by Russia, agreed in May to extend a loan of USD 3 billion. According to the agreement, Belarus will receive the following funds: USD 1.24 billion in 2011, USD 800 million in 2012, and USD 1 billion in 2013. The first installment was received by Minsk last week.
The provision of the loan does very little to end the economic crisis in Belarus. Alyaksandr Lukashenka himself stated in his interview on June 17, 2011 that dollars and and Euro would not appear in foreign currency exchange offices any time soon. Moreover, in 2011 Belarus will receive only an insignificant sum from the EurAsEC.
The loan extension does not mean that something changed in Belarus – Russia relations. Russia appears determined to privatize Belarusian enterprises. “Privatization is the main factor of capital inflow. Therefore, there are conditions, connected with privatization of property to the sum of USD 7.5 billion, i.e. USD 2.5 billion a year in the contract. This condition will be retained for sure,” said the Minister of Finance of Russia Aleksey Kudrin after the EurAsEC Anti-Srises fund meeting, where the credit extention to Belarus was approved, on June 4, 2011.
The official representatives of Russia, including Kudrin, underscore that “Beltransgas”, “Belaruskali”, and Minsk Automobile Plant should be privatized (in other words, to be sold to Russia), first of all.
The Kremlin officials believe that Belarus will be able to avoid a default only in case of selling a part of state property. Sergei Shatalov, the EurAsEC Anti-Crisis Fund Director noted on June 14, 2011 that Belarus would not receive other credit tranches, if it failed to meet its contractual obligations or announced a default.
The Belarusian authorities hold the same position on the issue of selling the industrial enterprises to Russian companies as on other issues of ‘real integration,’ as seen by Russia. Thus, the Belarusian side did not refuse to discuss the issue of concluding the Constitutional Act of the Union State in 2002 – 2004. However, it insisted categorically on signing its version of the Constitutional Act, knowing pretty well that it would never be supported by Russia.
Similarly, the authorities do not officially rule out uniting monetary systems with Russia. However, they insist categorically on their version of the alliance. Accordingly, the National Bank of Belarus must enjoy the rights of the second emission center together with the Central Bank of Russia.
Having signed the contract on getting the credit, Lukashenka and the First Vice-Premier Uladzimir Siamashka articulated again the position of Belarusian side: the state shares of “Beltransgas” can be sold only in case if “Gasprom” agrees to supply gas to Belarus at Russian domestic prices.
Apparently, among other, the position of authorities on the sale of “Beltransgas” was influenced by forecasts of expert organizations on the gas consumption growth. In particular, according to the International Energy Agency updates, the quota of gas in the global energy balance – 2035 is expected to reach 25% to be compared to 21% nowadays. The authorities believe that “Gasprom” will require the Belarusian transit facilities to meet obligations on contracts with buyers in the EU member-states after the “Nord Stream” gas pipe line is put in operation.
On June 17, 2011, Lukashenka stated he did not object to the sale of state shares of enterprises. However, the Russian party is not happy with the articulated prices at all. In particular, Lukashenka valued “Belaruskali” at more than USD 30 billion. Apart from that, the Belarusian negotiators listed other terms of sale, never to be accepted by the Russian partners. Thus, the investors were urged to retain the high employment rate, increase the tax revenues and invest in the development of their enterprises after all.
Lukashenka also doubted that Russian oligarchs would develop the purchased enterprises and fulfil their commitments to the Belarusian state. He underscored that the state enterprises worked efficiently: “Our population owns USD 20 billion. Who will buy the enterprises then? You know, who has an eye on them, don’t you? Especially, on such an effective one, as “Belaruskali”. They propose me to privatize the best assets. Nobody will have an eye on poor companies.”
Lukashenka had stated repeatedly before that the sales of industrial enterprises would have created danger to the independence of Belarus. Following his recent statements, the position remained unchanged.
Lukashenka noted that there was a number of unresolvable contradictions in relations with Russia. Thus, a Belarusian TV propagandist Prakopau put the following question to Lukashenka on June 17, 2011: “Why does Russia pursue the unfair policy in relation to Belarus and fails to support the ally during the crisis, like the EU backs Greece?” “Don’t provoke me! I have enough of it. Everyone understands that without saying. We will survive,” Lukashenka replied.
Andrei Liakhovich
Andrei Liakhovich is a contributing author. He directs the Center for Political Education in Minsk.
