BELARUS NEWS AND ANALYSIS

DATE:

29/10/2008

Belarus to loosen grip on economy for IMF loan

The Associated Press

MINSK, Belarus: Belarus is seeking a $2 billion international loan as a precaution, officials said Wednesday, insisting the former Soviet republic's economy had not been badly affected by the global economic crisis.

Government and Central Bank officials said they were liberalizing Belarus' economy, as they expected the International Monetary Fund to present loan conditions during talks that started Monday in Minsk.

"We don't urgently need this money," said Vasily Matyushevsky, deputy head of the Central Bank. "Our macro aim is not to use this money at all. But we need a loan to create a safety cushion, because no one knows the depth of the global crisis."

But other signs suggested Belarus does need the money - and quickly.

The authoritarian state has already turned for help to neighbor Russia, which last week approved a $2 billion loan of its own. Russian Finance Minister Alexei Kudrin said the money was earmarked for Russian gas supplies for Belarus' 10 million population before the winter.

In the last month Belarus has spent 10 percent of its $5.6 billion gold reserves in propping up its currency.

Deputy Prime Minister Andrei Kobyakov said he was "hoping for the best, but preparing for the worst."

Suggesting Belarus was making concessions for the IMF loan, Matyushevsky said the country raised the maximum foreign ownership in the banking sector from 25 percent to 50 percent.

Observers say the move may help with President Alexander Lukashenko's long-standing goal of improving Belarus' reputation in the West.

"Belarus intends to enter the top-30 countries in the world with the most attractive investment climate," Kobyakov said.

The IMF has agreed to loan Iceland $2.1 billion, Ukraine $16.5 billion and is in talks with Hungary, among other countries.

Source:

http://www.iht.com/articles/ap/2008/10/29/business/EU-Belarus-Financial-Crisis-Loan.php

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