Dire straits
September 14, 2011
The International Monetary Fund (IMF) has made further financial assistance to the cash-strapped, eastern European nation of Belarus dependent on a firm commitment to structural economic reform.
Belarus, labeled as Europe's "last dictatorship" by the EU and US, has requested $8 billion (5.8 billion euros) of credit to help shore up an economy shaken by its worst economic crisis in a decade.
"The fund will require a demonstrated commitment to strong policies and structural reforms," said Chris Jarvis, the IMF's mission chief in the Belarusian capital, Minsk.
The Belarusian government, led by long-time authoritarian leader Alexander Lukashenko, is planning to devalue its currency for the second time in a bid to make exports cheaper and plug a major hole in the state budget.
Minsk already devalued the ruble by 36 percent during the first go around, and the rating agency Moody's is predicting a further 50 percent decline in the currency's current value.
Government attempts to prevent rapid devaluation through an artificial exchange rate largely failed, and Minsk has now hinted that it is prepared to meet the IMF's call to allow the ruble to free-float, or have its value determined by markets.
Scapegoat
Lukashenko, meanwhile, has accused the IMF of demanding the release of political prisoners in exchange for the requested loan.
"They are demanding that political prisoners be released," said Lukashenko. "What does that have to do with the IMF? They should be looking after financial and economic matters. And the first thing they come out with is this demand."
Lukashenko, in power since 1994, won another presidential term last December in elections considered illegitimate by the West. Subsequent pro-democracy demonstrations led to a government crackdown in which hundreds were arrested, including several presidential candidates. The EU and US have imposed sanctions on Lukashenko's regime.
The IMF, however, has denied Lukashenko's charge of playing politics, saying such demands are beyond its scope of expertise.
"As we have said in the past, the IMF does not set political conditions to its lending," a representative from the IMF told the news agency Reuters. "We do not have the mandate to impose such conditions or the expertise to design and implement them."
Author: Spencer Kimball (Reuters, AFP)
Editor: Martin Kuebler