Belarus asks Kremlin for $1.5 billion to ease the row

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The Belarusian authorities have requested Russia for a $1.5 billion stabilization loan. It means we have good new and bad news. The good news is that there is a possibility of improving the stranded relations between the neighboring countries. The bad news is that Belarus has admitted the weakness of its economy.

The Belarus government had two options of how to get out of the difficult situation, following the increase in the price tag for the Russian gas: to raise the utility tariffs either for the population or for the industries. However, the authorities are simply borrowing the money. They are saving themselves that they will have to pay back later, not now.

Russia has its own reasons to lend, with $306 billion kept in reserve coffers. Leanid Zaika, a prominent Belarusian economist, has agreed to comment to the European Radio for Belarus on the situation.

“Russia could easily hand out $1.5 billion to the miserable stupid Belarusians. The point is to give out this money as loans, which will be accumulating. Afterwards, they could demand a potash factory or a steel plant, etc. to pay back the loan with,” Zaika said.

Why does Belarus need this money for? Most likely, the money is to be spent for paying for the Russian energy supplies. For example, Belarus previously paid around $90 million for the Russian gas annually. Now we have to pay over $2 billion per year.грошы беларусам?

We run across a contradiction: Russia raises the price tag for gas and at the same time gives us a loan to pay for the gas. It appears that Russia herself pays for her gas. But, the Russian economist Evgeniy Esin says the situation is absolutely normal.

“This is not at all ridiculous. This is normal. You have to take into account the interests of your partners. On the one hand, we get mutually beneficially relations; on the other hand, friendship is possible only when your partner’s interests are taken into account,” he told the European Radio for Belarus.

Economists suggest this money is hardly to be spent for building a nuclear power plant or any other energy projects or education or health care. Belarus is now in a situation when it cannot launch new projects before it sorts out the current economic impasse.

Belarus’s gross domestic product amounts to $30 billion. Foreign debt is $800 million. Together wit the loan requested from Russia, the debt will reach $2.3 billion up to nearly $3 billion together with the interest what makes 10 percent of the country’s gross domestic product.

Despite these calculations, political commentator Uladzimir Matskevich says the loan is quite affordable for Belarus and that the authorities could easily make this step for the sake of their own approval publicity.

“There is a clearly political side of the coin here. If Russia gives this loan, it would mean that Belarus and Russia have normalized their relations. It would give grounds to Lukashenka to tell to the public that everything has bee resolved peacefully.

I believe that the political reasoning has contributed to this request for a loan from Russia,” Matskevich told the European Radio for Belarus.

What does an ordinary Belarusian gain from this loan? If the government unexpectedly gave out this money to the people, every citizen would get $150. Correspondingly, if the loan is divided amongst the labor-age population, everyone would get an extra $300.

This means one average salary. Well, the loan could help stay off work for one month. However, it seems on the contrary that we will have to work more after receiving this loan.

Photo by sidereus.org