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INTERVIEW-Belarus sees no serious obstacles to IMF loan

Published 11/17/2008, 09:34 AM
Updated 11/17/2008, 09:36 AM

By Adrian Croft

LONDON, Nov 17 (Reuters) - Belarus sees no serious obstacles in its talks with the International Monetary Fund on a $2 billion loan and is hopeful of reaching an agreement, Prime Minister Sergei Sidorsky said on Monday.

An IMF mission is in Minsk for talks at Belarus's request for the loan, which officials have described as a precautionary measure against the impact of the global financial crisis.

"We are hoping for a positive outcome," Sidorsky said in an interview with Reuters. "I believe that the experts will find a compromise to successfully finish this mission."

Belarus had provided all necessary information, he said in London, where he will attend a Belarus investment forum on Tuesday.

"The (IMF) mission, the experts, all take our side, at least that's what they tell us. Now the ball is on the side of the IMF mission," he said, adding that the IMF would have to take a decision "in the near future".

Conditions put forward by the IMF were technical. "(There are) no serious obstacles right now," he said, speaking through an interpreter.

However, President Alexander Lukashenko said the IMF had criticised the ex-Soviet state for raising wages and for low collection rates for payment of public services.

He made the comments in an interview last week with the Wall Street Journal, a transcript of which appeared on the president's Web site on Monday.

POLITICAL DECISION

Lukashenko said Belarus had taken the decision to raise public sector wages before the financial crisis erupted and it would be improper to cancel it.

The Belarus president, who has long criticised the West for isolating his country but has sought to improve relations in the past year, said that if the IMF failed to extend the loan "this would be a political decision on their part".

Sidorsky said Belarus's priority was to support the real economy, including the import-export sector.

"The (IMF) credit ... is not only for Belarus, it would also be a credit for the partners from the European Union that are now involved in export-import relations with the Belarus industries," he said.

A $2 billion loan that Russia has agreed to grant Belarus would also be used to help the real economy, he said.

Belarus is a close ally of Moscow but is reaching out to the West for investment. At Tuesday's London forum, Belarus is inviting foreign investment in more than 400 projects ranging from micro-electronics to wood processing.

"We would like to position ourselves as a country that is actively developing as (an) innovative and high-tech economy," Sidorsky said.

Belarus had not been hard hit in the first months of the global financial crisis because the country was not an active player on international markets, he said.

"We minimised our foreign borrowings in the years of our economy's development," he said, adding: "The credit lines that we have received in previous years are all well taken care of by the government of Belarus."

In October, Belarus Gross Domestic Product was 10.6 percent higher than a year earlier, Sidorsky said, predicting inflation for 2008 as a whole would be between 10 and 12 percent. (Additional reporting by Andrei Makhovsky, Ron Popeski) (Editing by David Stamp)

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