The CIS Summit closed in Minsk on June 1 without the announcement of any concrete actions that might help buoy the sagging Belarusian economy or, coincidentally, the campaign of Belarusan President Alyaksandr Lukashenka, who faces an election in September. The summit did announce the putative transformation of the existing customs union among Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan into a new “Eurasian Economic Community” (RFE/RL, June 1), but provided no indication of how this new organization might boost economic growth in the member countries. Then, four days later, while addressing the parliamentary assembly of the Russia-Belarus Union, Lukashenka berated Russia for introducing unilateral amendments into the customs regime that damaged Belarusan interests, the latest being reduced Russian import duties on imported televisions (BBC, June 5). Lukashenka also lamented the lack of progress on a number of joint economic programs.
One program that had at least resulted in a concrete agreement was the anticipated Russian-Belarusan currency union. In order to stabilize the exchange rate and lower inflation, Belarusian policymakers in recent months have introduced two important changes in the foreign-exchange regime. First, the multiple exchange rate regime was eliminated in September 2000, when the official rate was allowed to depreciate to the level of the market rate. The official exchange rate is now being set at daily free trading sessions at the currency exchange. Second, the government and central bank announced on December 27, 2000 that the Belarusan ruble would be loosely pegged to the Russian ruble as of January 1, 2001. The national bank promised that the ruble would depreciate by no more than 3 percent per month, as opposed to the 5 percent per month rate of depreciation experienced in 2000. This more “stable” economic environment would pave the way for the introduction of a single currency for the Russian/Belarusan union. The plan for implementing the integration of the Belarusan and Russian economies calls for establishing a monetary union on January 1, 2005. The Russian ruble is to serve as the common currency until 2008, whereupon it is to be replaced by a new “union” currency.
Unlike Russia, which at the moment is swimming in dollars, Belarus needs all the foreign exchange it can get. The National Bank of Belarus (NBB) reported official foreign exchange reserves in February 2001 at only of US$365 million. These were insufficient to finance one month of imports (which averaged nearly US$500 in 2000), whereas three months of import coverage is generally regarded as a bare minimum by international standards. In order to help stabilize the Belarusian ruble and facilitate initial steps toward monetary union, Russia agreed to help boost the reserves of the NBB by extending credits. But at the meeting of the parliamentary group of the union in early June, Lukashenka charged that the promised credit had never arrived from Russia. He said that he would turn instead to Libya for the much-needed loan to improve his country’s international liquidity. Lukashenka blamed U.S. influence on Moscow for its lack of follow-through on its economic commitments to Belarus. But Russian Duma Speaker Gennady Seleznev, who chaired the session of the Union parliamentary group, told the press that Belarus-Russia merger plans still faced strong resistance in both countries and should be put to national referenda following the Belarusan presidential election (AP, June 4).
WORLD BANK AND IMF EXTEND LOANS TO ARMENIA.