Washington, Feb. 15 (RFE/RL) - Sources in Washington say that despite some progress on economic reforms, the International Monetary Fund (IMF) has told Belarus it is not moving fast enough to justify a second traunch drawing from the loan it obtained only last autumn.
Belarus reached agreement on a standard one-year stand-by program
with the IMF in September with a loan totaling around $294 million. However, Belarus was able to draw only the first traunch of about $75 million before its economic reform program went off track.
An IMF delegation traveled to Minsk last week to discuss the
problems and what steps would be necessary to resume credits. The
IMF declines to comment on the status of its talks with Belarus, but
sources familiar with the situation say there was a complete review
of government policies and "agreement on a number of points."
However, the sources told RFE/RL that disagreements remain in a number of important areas, in particular the "lack of fast-enough progress on privatization and
basic structural reforms."
According to public IMF documents, the structural reforms needed include price liberalization - especially allowing food and energy prices to reflect market forces
and the full costs of production. The sources say fund experts also see the need for Belarus' 1996 budget to be "a little tighter" and for monetary policy to be
Belarus Central Bank spokesman Alexander Makovsky told reporters
in Minsk last week that the bank had fulfilled its part of the
program with the IMF and that inflation during the month of December stood at five
percent. But according to the IMF's annual report issued in September, the target was for inflation of no more than one percent per month by the end of 1995. Makovsky also noted that the government's budget deficit was no higher than 2.7 percent of gross domestic product (GDP), which was under the IMF-agreed target of three percent.
Prime Minister Mikhail Chigir said at the start of the week that
the negotiations would be difficult. But, he said, "we will try to
persuade the mission that Belarus is proceeding towards the market,
though slowly and cautiously."
"At this stage," says one source at the IMF, "while the stand-by
remains in effect, it is not possible to proceed with disbursement of
the second traunch" of the loan.
Sources say the World Bank has also told Belarus it will not be
able to proceed on any future loans until the pace of privatization
and structural adjustment is accelerated.
The sources say no new discussions have been scheduled, but point
out that the IMF is now in almost constant contact with all of its
member countries and especially those from the former Soviet Union that are in the transition to market economics.