IMF Warns Belarus to Take Serious Measures to Prepare for Currency Union with Russia

The office of the International Monetary Fund in Minsk published on May 2 a summary of its consultations between the fund's council of directors and Belarus concerning the position and perspective of the Belarus economy. A spokesperson for the IMF in Minsk told Rosbalt that Belarus had achieved great success in realizing economic politics in a number of areas. Tax and budget and money and credit politics have been toughened in the country where a number of structural reforms have been realized. This mainly concerns the reduction of cross subsidies and increases in the rate of reimbursements of costs in the energy sector. As a result in 2002 in Belarus 'economic growth was maintained while the inflation rate dropped.'

However, at the same time, the IMF also said that 'Belarus has to decide many important economic problems, in part, to prepare a foundation for the planned currency union with Russia.' According to the IMF, these energies 'require conducting accelerated structural reforms.' The IMF also said that 'current economic politics do not correspond to the plans of strict fixation of the Belarusian ruble to the Russian ruble. 'Macroeconomic politics must correspond to a regime of changing rates, and changing rates must be to the necessary degree of competition at the moment of its fixation to the Russian ruble,' said the IMF.

In connection with this, the IMF council of directors called 'to realize disinflation at more accelerated rates and maintain the earlier mentioned dynamic of devaluation of the Belarusian ruble' in order to re-establish lost competitiveness. IMF representatives also recommended 'toughening money and credit and tax and budget politics to conduct intensive economic liberalization and officially liquidate special activities of paying work salaries in USD, in order to lower inflation.