IMF Loans: The Money We Do Not Need?
A controversial event took place next to the International Monetary Fund (IMF) office in the middle of the summer in Washington, DC.
Why the IMF is ready to support empty-handed countries?
Belarus draws its loans from a special IMF fund called the Poverty Reduction and Growth Trust (PRGT). According to Kryptoszene.de, its money covers the difference, when a country buys more than it actually sells. The Belarusian government cannot “buy votes” with the IMF, since it can neither cash in on these funds, nor use it to increase the salaries of public sector employees and or boost retirement plans. Belarus, however, has other opportunities to abuse the money it receives from the fund.
How could the IMF money be misused?
More realistically, the Belarusian government may exploit the IMF funds by indeed using it to cover any excess imports, but it should be noted that only the political elite makes foreign purchases. This happens when the political elite buys from outside exclusively for its own consumption. In this case, the products bought with the IMF money benefit a very closed group.
Pursuing similar goals
Before going continuing to protest against the IMF, we should understand what the IMF expects from Belarus. Those Belarusians who advocate for democratisation through reforms should understand that the IMF, led by its main donors, has the same vision for change in Belarus. Belarusians would benefit more if civil society organisations would protest for as the lowest possible interest rates on IMF loans rather than struggling against the receiving the funds in the first place.
Palina is a PhD Candidate in Public Affairs at Florida International University