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Session to discuss interaction with the IMF

3 October 2016

Interests of the Belarusian nation must be undoubtedly taken into account in discussions about the new credit program of the International Monetary Fund for Belarus. Belarus President Alexander Lukashenko made the statement during the government conference held on 3 October to discuss interaction with the IMF.

The President remarked that the IMF has a standard way of interacting with any country during negotiations on lending and the requirements the IMF presents are generally the same. “I have come to understand precisely what shareholders want, what IMF founders representing the countries, with which negotiations are held, want. In other words, the IMF has a certain policy,” said Alexander Lukashenko. “In the end decisions are made upon recommendations of those, who have more capital in the IMF, those, who own the controlling interest. The USA and the European Union are the dominating shareholders. No IMF decisions have ever been made without them.”

“The requirements [the IMF usually presents] are super liberal. Moreover, in the end these requirements have nothing to do with the policy the president declared during the first presidential elections, possibly the second presidential election and even now,” said the Belarusian leader. “When one reads these requirements, the general theme with regard to social security can be summarized like this: no salary raises, an immediate increase in utility rates and so on. Communists would say that such measures are meant to choke the nation. I don’t mean they are trying to choke us. Nobody forces us to take these loans but, unfortunately, this is the formula.”

“I would like to warn those, who are conducting these negotiations: if you are trying to erase everything the nation and the president have done in the last 20 years, you will fail. Don’t do it. We have no right to make the Belarusian nation poor,” stressed the head of state.

“I am not saying everything you have brought today fits this negative formula. But I would like to hear you out, would like to hear your motivation,” the President told participants of the meeting.

As an example Alexander Lukashenko mentioned the IMF requirements concerning the policy of managing state-owned property. “I have always said that we are not going to give up on state property if it works fine. Moreover, we will rely on it,” stressed the head of state. “But far from privatizing everything and anything in a certain period of time we are supposed to totally forget about privatization. We are supposed to pass some law and forget all about it.”

“Even if privatization goes wrong, we will not be able to revise the matter ten years from now. Privatized assets will become unchangeable after three years,” the President noted.

Alexander Lukashenko noted that raising utility rates was an issue he was sick and tired of hearing about. “Contemplating the matter, I tried to approach it from another angle: those, who can pay, should pay. Let’s see who will be able to pay the utility rates we are told to enforce, with a warning against raising salaries,” said Alexander Lukashenko. “Who will be able to pay them? Blue-collar workers? No. Peasants? No. Teachers? No. Medics? Civil servants? No. Army and police officers? No. Who then? Belarus may have about 100,000-200,000 businessmen while the total number of working Belarusians is close to 5 million. What effect will the measure produce? We will have to spend state budget resources to pay for utilities of teachers, medics, blue-collar workers, peasants, civil servants, and the military. But then the IMF has very strict requirements concerning our budget management.”

Acording to the President, the same situation may unfold in the real economy sector, too.

The head of state also underlined that, as a rule, payment arrears rise when utility rates are suddenly raised. “By the way, it seems to me that even with current prices there are already arrears in payments for utilities. The arrears can be small but they do exist. What will we achieve [by raising utility rates]?” wondered Alexander Lukashenko.

The President stated that some people, including government officials, are in favor of going ahead with some reforms regardless. “I have already stated a thousand times that we have carried out all the reforms. We are now improving on what we have today,” said the President.

“Yes, borrowing three billions at a cheap price would be nice. I am all for it. But the price is absolutely unaffordable for us and unjust with regard to the people. It will cancel the entire policy we’ve been pursuing up till now,” said the President.

Alexander Lukashenko also noted that they suggest he could write a letter to IMF head Christine Lagarde. “It would be demeaning not only for me. It would be demeaning for our nation,” stated the Belarusian leader. “If they tell us to follow this policy, we will have to tighten our belts and explain to the nation that either we take three billion or we live the way we do – calmly without destroying anything. I think the people will not back the IMF recommendations.”

“I would like to learn what we have agreed on in negotiations with the IMF, what they want us to do, whether we are ready for such changes, and how the changes will affect the nation,” added Alexander Lukashenko.

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