Imf Experts Nix Belarus Stabilization Loan Plan

IMF experts believe Belarus cannot expect to obtain a stabilization loan anytime soon now that the ex-Soviet state has failed to comply with the six-month economy and finance policy monitoring program, deputy director of the IMF's Second European Department, Marta de Castello Branco, who led the IMF mission, said in closing remarks. She acknowledged the Belarussian government had made some progress in monetary policies, but insisted the country's economy remained too tightly regulated. She pointed to pricing controls as a major impediment to economic development. She went on to argue that Belarus' upbeat 2002 budget was hardly justified either. The fiscal plan provides for pay rises and heftier National Bank loans to the government, something she feels has to be cut significantly. Castello Branco disclosed IMF's and Belarus' delegation had found no common ground in talks on these, and other, issues. Nonetheless, the IMF hopes the Belarussian government pays heed to the Fund's recommendations next year. If the government can twin compliance with the recommendations with maintaining the macroeconomic indicators at levels proposed by the IMF, the Fund could negotiate disbursing a standby loan to Belarus. She acknowledged that, either way, the money involved will not be too big, but said the move itself would send a clear signal to important investors.

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