The Eurasian Development Bank, which manages the loans of the Anti-crisis Fund of the Eurasian Economic Community (EurAsEC), has published a report enumerating the conditions Belarus had failed to meet to receive the sixth tranche of EurAsEC`s stabilization loan.
The Board of the Anti-crisis Fund (AFC) decided on December 27, 2013 to postpone the disbursement of the $440-million tranche of the $3-billion loan for six months.
The Board said that Belarus had failed to meet 10 of the 14 targets set by the AFC for the country in June 2013.
In its report, the Eurasian Development Bank says that Belarus failed to meet international reserve, privatization and lending targets.
The Belarusian government`s failure to fulfill the terms attached to the EurAsEC’s loan is due to the excessive stimulation of domestic demand, which cancels out the earlier benefits of the AFC’s loan program by steadily increasing the current account deficit, a process that began in the latter half of 2012, the report says.
The amount of the current account deficit is extremely unstable and leads to the reduction of Belarus’ international reserves, pressure on the exchange rate of the Belarusian rubel, and the growth of external debt, the report says.
Belarus has also failed to meet some other requirements for getting the third loan tranche, including the adjustment of the rates of excise tax on alcohol and cigarettes to match their level in Russia, the report says.
In addition, the cost recovery rate for utility services and transport services had not been increased to 40 and 90 percent, respectively, by the fall of 2013 in line with the loan program, the report says.
Given Belarus’ failure to abide by the terms of the loan program, the Eurasian Development Bank has recommended the AFC Board to postpone the consideration of disbursing the final loan installment to Belarus, the report says.
The first, $800-million tranche of the loan was made available to Belarus in June 2011. Another portion, $440 million, was provided in late December 2011. Belarus received the third tranche in mid-June 2012, the fourth one in January 2013 and the fifth one in April.
