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Wednesday, October 21, 1998

Belarus seeks IMF help amid Russia crisis 

Janet Guttsman  
Washington, Oct 20: Hardline Belarus has asked the IMF for money to help it cope with slumping exports to Russia, but an IMF official said on Monday a deal would depend on clear signs of a shift toward market-oriented reforms.

The official, who spoke on condition he was not identified, said Belarus had asked the International Monetary Fund to consider a loan under the fund's special compensatory and contingency financing facility -- a little-used programme that helps countries deal with external shocks.

But he made clear that the government of the former Soviet republic would have to change policy radically in order to win IMF funding -- and this could take some time.

"To qualify for this facility, even if they met the technical requirements, they would have to take some measures to show that they are serious about moving ahead with reforms," the official said.

"That means a reasonably sensible monetary and fiscal policy, bringing down inflation, not accommodating inflation from Russia."

The IMFlong despaired at the economic policies of Belarussian leader Alexander Lukashenko, who rejects market reforms in favour of a centrally planned Soviet-style economy.

The fund withdrew its resident representative from the country in July.

The feeling of uneasiness is clearly mutual, and first deputy foreign minister Sergei Martynov said earlier this month that "old text book recipes" from the IMF were to blame for the crises plaguing developing economies.

"The Fund's enforced policies in a range of countries have deepened and even caused the crisis," he said.

The IMF official said a team of Washington-based experts would visit Belarus next month for talks, discussing the loan request and other issues.

He had no figures for the size of a possible loan, but said it would be for tens of millions of dollars rather than for hundreds of millions. "I cannot even give you a ballpark figure, but it would be a small fraction of quota," he said.

Belarus, which had independence more or less thrust upon it whenthe Soviet Union fell apart in 1991, has an IMF quota -- or subscription -- of some $400 million.

Belarus has been hit hard by the economic collapse of its giant neighbour Russia and Russian firms no longer have money to pay for goods from Belarus, or indeed from other countries.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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