WOULD UNIFICATION WITH RUSSIA INCREASE FINANCIAL DISCIPLINE IN BELARUS?

An interview recently given to Interfax by an anonymous expert associated with the Belarusan National Bank (BNB) suggests that the Belarusan monetary authorities anticipate that integration with Russia could help impose financial discipline on Minsk. (Interfax Belarus Economic News Report, April 14) According to the expert, monetary unification would mean that Belarus would have to bring its monetary and credit policies into line with Russia’s. The Belarusan foreign-exchange market and the country’s commercial bank regulations would also have to be liberalized. And the BNB would no longer be able indiscriminately to issue credits to finance the state budget deficit. The official also argued that the single currency, whose introduction and control by a single central bank is envisaged by the draft charter of the Russia-Belarus union, could only be the Russian ruble.

The expert also voiced support for these aspects of the draft charter, because, in his view, following Russia’s example will allow "a return of the National Bank’s relative independence from the executive power and make the government live within its means". That remark suggests that the BNB would become an appendage of the Russian Central Bank, should the monetary union take place, and as such would be more independent of the Lukashenko government. This could explain why Lukashenko has in recent weeks moved away from unconditionally supporting the union, and has increasingly emphasized that integration with Russia should not reduce Belarusan "sovereignty". Indeed, despite their potentially beneficial effects, the BNB expert described the issues enumerated above as serious stumbling blocs on the path to Russo-Belarusan economic integration.

The candor with which the BNB expert spoke is also noteworthy, insofar as former BNB head Tamara Vinnikova was imprisoned in January, allegedly for failing to support Lukashenko’s economic policies. Vinnikova was hospitalized in February, and her fate seems not to have been reported by the Western press. Stanislau Bahdankevich, one of Vinnikova’s predecessors, is currently a leader of the anti-Lukashenko opposition, as are most of Belarus’s economic reformers.

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