International Monetary Fund, an organization with long record of imposing radical neoliberal solutions in exchange for loans on countries in dire need, is planning to send in October their representatives to Belarus in order to discuss the economic situation with the Belarusian government – informed Chris Jarvis, the head of IMF mission to Belarus.
The IMF officials will visit Belarus between 5th and 17th October; their focus will be analysis of the most recent developments in the Belarusian economy and providing advisory opinions. .
Belarus requested a financial aid program in June, but there was no mentioning of that issue. Mr. Jarvis stressed that IMF will provide Belarus with a loan only if there are deep and constant changes in the Belarusian authorities policy. – As long as we don’t have thorough knowledge of Belarusian economic program, we are not able to decide if the financial aid is necessary – he added.
Mr. Jarvis also explained that before making any decisions on the loan, IMF Executive Directors demand that Belarusian authorities introduce radical economic reforms – liberalizing the currency rates, prices, and introducing more discipline in fiscal policy, often meaning cutting deficit at a price of the social welfare. If such reforms were introduced, they can take a heavy toll on an average life standard, already affected by the ongoing economic crisis. Mr. Jarvis also encouraged changes in monetary and credit policy, advising keeping high credit rates.
“So even with a floating exchange rate, we think it would be important for the central bank to be able to build up its reserves to a more comfortable level. And for that reason, we think that potential external support–both in the form of loans and in the form of privatization proceeds–can play a very helpful role in contributing to external stability. “ – said Mr. Jarvis.
Finally, the head of Belarusian mission applauded the efforts to liberalize the currency rates through holding additional trading session at the Currency and Stock Exchange – “I think it’s a very important and welcome move. It will be important that this is a genuinely free exchange rate. And we will be interested to see how the new approach works in practice.” – he stressed.