Minsk asks for loan to fight epidemic

Officially, there is no quarantine, but the economy already needs help. Belarus is going to take an impressive loan in the West to compensate for the damage caused by the coronavirus. Where will the money go?

Minsk has asked the World Bank, the European Investment Bank and the International Monetary Fund for $ 2.5 billion or 4% of GDP loan. Four hundred million are planned to be spent on drugs and medical equipment, the rest — to help the economy.

“The number one task is to preserve jobs and businesses. By and large, all other tasks are secondary today,” said Deputy Prime Minister Dzmitry Krutoy.

The authorities plan to save enterprises with loans for salaries, tax benefits, deferral of rent and debt write-off.

“Up to 100-200 large enterprises will get this money, they will receive benefits. The banks will get benefits. But thousands of people engaged in small and medium business have nothing to expect. Lukashenka has already made a clear statement about them: “What are you waiting for? Go into agriculture!” economist Yaraslau Ramanchuk commented on the decision of the authorities.

Alyaksandr Lukashenka left the issue of granting rental and tax benefits to companies at the discretion of local authorities. He signed the relevant decree on 24 April. Lukashenka promised support from the state budget only to large plants.

“We can recall the decree on glass factories, sugar refineries. These are enterprises that, in the absence of the virus, could not work and were unprofitable. Why they need help in this situation is not clear at all,” Vadzim Iosub, a senior analyst at Alpari, said, perplexed.

Even without quarantine, the COVID-19 epidemic has already affected the country’s economy. Travel agencies, cargo carriers, non-food stores, hotels, gyms, cafes and event organizers — demand for small business services has fallen several times.

“We have been ‘coughing’ like this for some time now. We have an open credit line, which we are using to live. Then I hope to pay the money off. Now we are trying to preserve our team,” says Siarhey Bandarovich, the pub owner from Homel, about the current situation.

Minsk also needs Western money to strengthen its social security system. Unemployment allowance will be raised to a minimum subsistence level for the first time — from today’s $ 22 to $ 100. The International Monetary Fund has long sought this from Belarus. Support for the unemployed may turn out to be very helpful. The IMF forecasts 6% economic decline in Belarus.

Alyaksandr Papko/ Belsat.eu

Photo: president.gov.by