Nezavisimoya Gazeta: Russia Will Finance Belarusian Economy for the Belarusian Loyalty

Russia will openly finance Belarusian economics for its political loyalty. Implicit crediting will be changed for explicit one, Nezavisimoya Gazeta reports. On Saturday head of the ministry for economic development Herman Gref declared the readiness of the Russian government to consider the issue of granting a stand-by credit of USD1.5 billion to Belarus. Thus, the experts consider, Moscow and Minsk decided to employ the USSR-Cuba model of bilateral relationship.

“Granting credit to Belarus is an actual issue and the government is ready to consider it”, Herman Gref declared thus replying to the Minsk’s request of USD1.5 billion stand-by credit to Belarus for “improving the payment balance, for power sources purchasing and for other needs”.

According to the economists, interviewed by the NG, the credit will be granted on preferential credit terms. And the debt itself may be further restructured and then totally written off. Previously the relationship between Moscow and Havana was based just on the same scheme.

In 1960s –1980s Cuba regularly got goods from the Soviet Union on credit, thus, by the end of the USSR’s existence it owed USD 22 billion. The crediting mechanism, presumably, didn’t suppose any debt repayment on the part of Cuba. Readiness of the USSR to grant credits without envisaging any repayment was considered to be a sort of payment for the political loyalty of Havana – a citadel of socialism in the Western hemisphere.

Alyaksandr Lukashenka also constantly mentions that for the “union” with Russia Moscow has to pay Mink. Actually, Russia accepted such game rules but decided to change the hidden crediting of the Belarusian economy for open lending, implying that any time Moscow may present its “hot bill” to Minsk. Scientific adviser of the Higher School of Economics Yevgeni Yasin approves such policy. If instead of unreal prices for carbon sources transit we are requested of a credit it is, definitely, a positive message”, the economist says.

Meanwhile, the oppositional experts in Belarus tell that new credits will be employed for preservation of the Belarusian inefficient economy, which crisis tendencies are going to become obvious soon. “Belarus has the money for buying gas at higher prices and an increased state debt will be applied for supporting unprofitable sectors of the Belarusian economy”, declared former Chairman of the national Bank Stanislau Bagdankevich.

According to Stanislau Bagdankevich, the volume of unpaid output comprises around USD 7 billion with the total Belarusian GDP of USD 37 billion. Meanwhile, the unsold stock of the Belarusian manufactures had increased almost by 25 % in 2006 and in January 2007- by 18%. “According to official statistics, the Belarusian economy grew by 10% in 2006 along with 60% increment of the credit facilities, thus, pointing out to the inefficient nature of production process”, says Stanislau Bagdankevich.

According to him, today Belarus is already incapable of delivering meat to Russia even with minimal profit, because inside expenditures are higher than the current Russian prices. “Russia, certainly, may sponsor the Belarusian economy but such economic model can’t exist for ever”, the former banker told.