Komsomolskaya Pravda: "Putin offers bailout to Belarus"
Prime Minister Vladimir Putin arrived in Belarus to attend a meeting of the heads of government of the CIS member-states and the Eurasian Economic Community (EurAsEC). However, the main intrigue of the visit was whether Russia would offer financial assistance to its neighbour.
On Tuesday, Belarusian President Alexander Lukashenko announced that Russia agreed to grant Belarus a $6 billion loan. Finance Minister Alexei Kudrin made a correction – not $6 billion but $3 billion (Belarus is expected to receive as much by privatising government property). Moreover, the money will come from EurAsEC's anti-crisis fund rather than directly from Russia, and not in a lump sum but in equal portions over three years. In all fairness, it should be mentioned that this fund largely consists of Russian contributions. The main issue is on what terms Minsk will receive the loan.
Lukashenko is trying to put a good face on the matter by saying that although Belarus needs the money, it is not so urgent or critical.
However, the facts belie his statements. The Belarusian rouble is becoming weaker with every passing day (it has already lost half of its value). There is little foreign currency left in the country and people are spending nights at exchange offices. Our correspondents report that stores shut their doors every day to rewrite price stickers as goods are becoming more expensive. The country's national debt does not seem too high, but if all government loans and the obligations of companies (that are almost all state-owned) are counted, it turns out that Belarus owes 45% of its GDP. "So what?" officials in Minsk say, recalling that the U.S. national debt is 100% of the GDP and nothing happens. However, experts say that it is inappropriate to compare America and Belarus – their economies are worlds apart. Moreover, the announced $3 billion is too little too late. According to expert estimates, Minsk needs $1 billion per month rather than per year.
Putin is expected to help and almost nobody doubts that Russia will grant a loan. The whole issue boils down to the price. This is what Putin and Lukashenko will have to discuss. Lukashenko could offer Putin 50% of shares in Beltransgaz. Gazprom already owns half of the company but wants to get full control over this strategic Belarusian asset.
The parts of the meeting of CIS prime ministers and EurAsEC that were open to the media did not contain any high-profile statements by Putin. He did not say a word about the loan for Belarus, increasing the intrigue surrounding the issue. Belarusian Prime Minister Mikhail Myasnikovich told journalists that the loan would be granted and that the terms had already been agreed upon, though he said it was still unclear whether the loan will be $3 billion or $3.5 billion. One thing is clear though – the interest will be below the market rate. The other details will be settled during a conversation between Putin and Lukashenko (their meeting had not begun at the time this issue was signed; see details at the kp.ru site).
Incidentally, Kyrgyzstan would also like to receive financial aid from Russia, as its Prime Minister Almazbek Atambayev hinted at once again at a bilateral meeting with Putin. "All the more so since Mr Kudrin is here," he said without a prelude, nodding at the Russian finance minister.
"Mr 'No' with a purse," Putin joked, making everyone laugh.
It is still unknown whether Kudrin said his "no" because the rest of the conversation took place behind closed doors...
The meeting of the CIS heads of government was routine – the parties discussed 19 issues. They postponed again an agreement on a CIS free trade zone. The problem is that during the CIS's 20 years of existence, its members joined other alliances and associations, and if all duties are cancelled now, some will gain and others will lose. The Tajik prime minister, who chairs the CIS heads of government council, said that the easiest way is for all of them to join the WTO and thus settle all the differences. However, this scenario seems utopian today.
The CIS heads of government supported the candidature of Grigory Marchenko, chairman of the Kazakh National Bank, to be nominated as head of the IMF after the resignation of Dominique Strauss-Kahn, who has been charged with sexually assaulting a hotel maid (see p.7 for details).
Minsk also played host to the meeting of the Customs Union Supreme Council. In his opening address, Vladimir Putin said that Kyrgyzstan had expressed its desire to join the Customs Union and that the technicalities would be resolved soon.
Nigina Beroyeva
