FOREIGN EXCHANGE SHORTAGE PUSHING BELARUS TOWARDS SWAPPING DEBT FOR EQUITY…

Belarus’s trade deficit and growing arrears for Russian energy imports are pushing Minsk toward offering equity in the country’s oil refineries in order to settle the debts of Russian oil exporters.

Belarus’s $1.5 billion trade deficit in 1997–a $200 million increase on the 1996 figure–has been aggravated this year by Moscow’s unwillingness to permit Belarus to settle its energy imports via barter. Belarusan arrears for Russian energy reached $470 million at the start of April–$225 and $170 of which was owed to Russia’s Gazprom natural gas monopoly and Russia’s oil companies, respectively. Minsk’s estrangement from the international financial community limits its ability to obtain additional foreign exchange, leaving the country’s with forex reserves which National Bank Chairman Pyatr Prakapovich described last week as “sufficient to fulfill the 1998 forecast indicators, but still very small compared to the country’s needs.” (Interfax, April 16)

Gazprom has responded to Minsk’s financial problems by reducing gas exports to Belarus by some 30 percent. Belarusan President Alyaksandr Lukashenka therefore met in Moscow last week with representatives of four Russian oil companies to prevent a similar tightening in oil imports. According to Russian press reports, Lukashenko proposed the introduction of a new payment system, under which Russian oil companies could receive equity in Belarus’s Novopolotsk and Mozyr oil refineries. In exchange, Belarus would receive an additional $180 million in credit–to finance Russian oil imports. (Interfax-Zapad, April 16)

The economic squeeze that Moscow put on Minsk (see the Monitor, April 15) following the squabble that broke out last month when Lukashenka blamed leading Russian officials for the collapse of the Belarusan currency, could now be leading to the transfer of strategic elements of the Belarusan energy complex to Russian ownership and control.

… RECENTRALIZING FOREIGN TRADE, AND LEGALIZING THE DOLLAR ECONOMY.