“Kommersant”: terms for Russian credit were imposed on Belarus :: Charter'97 :: News

The Russian part informed Belarusian Prime Minister Siargey Sidorski on the new terms for the Russian state credit at the talks held last Friday. The sum requested by Belarus has grown from $ 1.5bln to $ 2bln. According to the Russian newspaper “Kommersant”, Russia insists that Belarus should change its financial policy so that this would be the last credit requested; Belarus still hasn’t re-evaluated the price of “Gazprom” gas supplies.

Belarusian Prime Minister Siargey Sidorski came to Moscow last Friday solely to negotiate with Russia’s Government Head Mikhail Fradkov on the Russian credit for Belarus. The official reason for the visit, however, was the following meeting of the Council of Ministers of the “union state” of Russia and Belarus. But Siargey Sidorski concentrated mainly on the present economic crisis in Belarus that had broken out after the terms for Russian oil and gas supplies had been altered in the beginning of 2007. Belarus bases its explanations of the need for the Russian credit on these matters.

According to the Belarusian Prime Minister, the growth of the natural gas prices over the last 4 months has resulted in “the growth of the price of its import to Belarus by more than $ 458mln.” Moreover, as he has counted, the oil supplies from Russia having been reduced in early 2007, the Belarusian budget has received $ 200mln less. On the same day in Minsk Belarusian Deputy Prime Minister Viktar Bura cited bigger sums of budget losses. According to Reuters, Bura evaluated the losses of the Belarusian economy in January-May 2007, stipulated by the export duties imposed by Russia, at $ 430mln. As he put it, Belarus plans to restore the oil-refining industry in the second half of 2007, with the help of the system of 90 per cent compensation of tax duties on commission for the Russian oil suppliers. The key macroeconomic problem of Belarus is the negative trade balance with Russia: according to S.Sidorski, it has grown from $ 390mln in 2006 to $ 2bln in the first half of 2007.

In Siargey Sidorski’s view, it is Russia who is to rescue the country’s economy from the crisis, with the intergovernmental credit. The talks on the credit terms are still on. Siargey Sidorski spent an hour and a half discussing the matter with Mikhail Fradkov last Friday at a bilateral meeting held before the session of the Council of Ministers. As one of the participants of the talks told “Kommersant”, demands posed by Minsk on the credit grew up to $ 2bln. He also illuminated Russia’s new position: Belarus can get the credit only for “substitution of the cash gap of the budget.”

In other words, Belarus is to show Russia the changes in its budget policy that will prove the credit is a one-time aid, the need for which will not occur in future. This can’t be a simple precautionary measure: the Belarusian budget 2007 was calculated basing on the price for Russian gas of $ 55 for 1 000 cubic meters, and no alterations have been made yet. According to the information source, the present talks of Russia and Belarus remind of the talks between the IMF and Russia of the 90s: Russia was granted the IMF credit on the condition that the social expenses would be reduced and the Russian economic policy would get transparent.

Belarus’ future privatization strategy is one more question that Russia hasn’t got any reply to yet. That was in March 2007 when Belarusian Deputy Prime Minister Uladzimir Siamashka said Belarus “is ready to sell its enterprises”. According to the Belarusian privatization plan, auctions for selling the shares of several strategic oil-refining and petrochemical enterprises (such as “Naftan” Plc, Oil-recycling Plant of Mazyr, “Polimir”, “Belshina”, “Grodnoazot”) can be held in 2007. These enterprises can be of interest, first of all, of the Russian companies “Gazprom”, LUKOIL and

“Uralkaliy”. But the price bidden seems unreasonably high to the Russian buyers; for example, Belarus plans to get $ 1bln for “Belshina” Plc. The reduction in the start price for privatization of the companies can play the key role in the credit matter.

Obviously Siargey Sidorski wasn’t empowered to get such concessions from Russia. The Belarusian Prime Minister’s request wasn’t fully declined, and that is the most what he has managed to achieve. Mikhail Fradkov said summing up that the possibility of granting the credit to Belarus “is being regarded”, but “this demands certain time and thorough consideration”. The term of the new talks isn’t announced.