Minsk wants 1 bln Russian loan. Expert explains why Moscow will not refuse

Putin and Lukashenka meeting in Minsk

Belarus and Russia are negotiating a $ 1 billion Russian state loan in 2019 to refinance Belarus’ foreign debt.

This was said by First Deputy Prime Minister Vasil Matsyusheusky, TASS reports.

“Work is underway, we have a rather constructive interaction. We are not being dramatic, but there are issues, and we are responding to them,” he said. “Our strategy is not to increase debt obligations.”

Matsyusheusky specified that in 2019 Belarus is to pay 3.7 billion dollars of external debt, 50% of payments are planned to be refinanced. To this end, Belarus intends to attract funds from the placement of bonds on the Chinese market and on the domestic market.

Expert: Russia will continue to support the loyalty of few friends

Senior analyst of Alpari Vadzim Iosub told belsat.eu that the prospect of getting such a loan from Russia is quite real.

“Russia is one of the main sources of Belarusian lending. Along with the Eurasian Development Bank of the Russian Federation, Minsk gets from Russia untied loans. In China, Belarus takes tied loans intended for the supply of Chinese equipment, wages for Chinese workers, etc.

Although the relationship between Moscow and Minsk has been complicated lately, Russia will continue to support the loyalty of her few friends in this way. Compared to previous years, despite periodic trade wars, allegations of smuggling, Russia has always agreed to lend money to Belarus,” the expert thinks.

“Restricting supplies of petroleum products can cause stagnation”

As was previously reported, Russia can limit duty-free supplies of petroleum products and liquefied petroleum gases (LPG) to Belarus from the fourth quarter of 2018. Recently, Vasil Matsyusheusky said that there is no threat in limiting supplies of Russian oil products to Minsk. Negotiations on this topic, he said, are conducted at the level of vice-premiers.

“Statements of this kind should be treated critically. Arrangements for the supply of petroleum products have always been as opaque as possible. We probably will not know the truth in this case, or we will receive information postfactum, when the parties have agreed. You can recall the restriction on the supply of Russian oil in 2016. This tory lasted until the first quarter of 2017 and was accompanied by a series of leaks. In particular, the “Kommersant” then published a lot of contradictory information…” Vadzim Iosub said.

According to him, if this time Moscow really cuts down supplies of oil products and LPG to Belarus, this will gradually lead to economic stagnation in the country.

“First of all, this will affect the budget revenue — respectively, and the state’s ability to raise public sector wages. It is hardly possible to predict a fall in wages, but the stagnation effect will certainly be noticeable. ”

Katsyaryna Andreyeva, belsat.eu

See also