Russia to Give $70 mln Loan to Belarus

Russia is to give Belarus a loan of $70 million, designed to repay Minsk’s debt to Russia, as well as to the Eurasian Fund for Stabilization and Development. The corresponding order was published on August 24 on the webpage law.by.

The Belarusian side is to repay the loan twice a year (April 15 and October 15) for 10 years. The first instalment will be made in the spring of 2018. Moscow will give Minsk the necessary amount in Roubles, but the loan will be paid back in dollars.

Ex-chairman of the Supreme Council of Belarus, Stanislav Shushkevich, has warned that further allocation of loans will lead to a default in Belarus.

"He (the president of Belarus, Alexander Lukashenko), is driving Belarus into great debt. This will probably lead to a default. I cannot give him advice, because he does not recognize reasonable advice. He has been given advice for a long time as to how to modernize the economy, but he is threatened with losing power. With this loan, Russia is saving the Belarusian dictator," Shushkevich said, adding that while he understood the necessity to allocate a loan for Belarus, which will not suffer if it is used wisely, "Belarus will pay it for a very long time”.

In the first four months of 2017, Belarus paid $120 million in repayment of the public debt. At the same time, it is expected that in 2017 alone, Minsk will return $741 million. According to the balance of payments, CBR (Central Bank of Russia) version, Belarus owes Russia about $6.4 billion.

Russia remains a key partner for Belarus from a trade, financing and political perspective. The gas price dispute with Russia, which echoes various energy disputes in the 2000s, remains unresolved, thus creating uncertainty for the 2017 economic and financial outlook.

David Smith