Economist Uladzimir Kavalkin posted in his Facebook excerpts from an article published in the official journal of the Ministry of Finance of Belarus. The article highlights the fact that local budgets are threatened with “an increase in the debt obligations of local governments.”
“Over the past two years, with the aim of improving the agribusiness [agro-industrial complex] enterprises, the debts of agricultural enterprises to banks were transferred to the banks in the amount of 2.3 billion rubles [about $ 1.15 billion],” the Finance Ministry journal said.
The decision on transferring loans “at the initiative of the regional executive committees” was taken by the head of Belarus last year.
What does this mean?
Previously, unprofitable enterprises independently repaid their debts to the banks. Now the debts of the agribusiness are paid by the Regional Executive Committees, which issued bonds of local loans. The main means of loan repayment should come from the funds of enterprises of debtors (with the possibility of deferral or installments).
According to the naviny.by, regions with a high level of debt obligations have no right to take new loans without the permission of Alyaksandr Lukashenka.