Putin’s loan to Lukashenko evaluated: one hand will yield, the other will take

Lukashenko, whose security forces arrested thousands of opposition supporters demanding the president’s resignation, secured financial support for Russian President Vladimir Putin during a meeting in Sochi on Monday.

However, the actual amount he will have at his disposal, for example, to pay militiamen or increase wages to lure striking workers back to work, will be far less than the impressive figure of 1.5 billion. Dollars, Reuters reports.

Artiom Shraibman, a political analyst at the Carnegie Center in Moscow, believes that only a small portion of the loan will reach Minsk, as Belarus has to roll over a billion worth of loans from other countries, including Russia, before the end of the year. USD, and pay 300 million. Debt in US dollars with Russian energy giant Gazprom.

“In fact, this money will go from one Russian pocket to another,” said Pavel Latuško, a famous member of the Coordination Council of the Belarusian opposition.

Sofia Donec, chief economist at Renaissance Capital in Moscow, said: “Basically, this loan is not new money, but a refinancing of the existing debt of Belarus (with Russia). Part of this debt must be paid next year. “

Almost half of Belarus’ foreign debt is debt to Russia, added the chief economist. Next year, the country will have to repay around 2.6 billion. USD, mainly for Russia and China.

Deteriorating economy

Lukashenko has faced not only the worst political crisis in his 26 years in office, but also mounting economic challenges.

On Tuesday, state news agency BelTA reported that gross domestic product (GDP) fell 1.3 percent in January-August. In August alone, the country’s central bank spent $ 1.4 billion. USD, or about one sixth of gold and foreign exchange reserves in an effort to strengthen the national currency of the Belarusian ruble.

Belarusian companies and banks are also very vulnerable. According to the Russian credit rating agency ACRA, on July 1. The debt of Belarusian companies and banks amounted to about 9 billion. USD, so the government may have to cover part of this amount, since the possibilities of deferring payment of arrears are limited due to the current crisis. ACRA calculated that on April 1 of this year. Belarus’ debt to Russia amounted to about 7.9 billion. USD, or 12 to 13 percent. GDP.

For the past two decades, Lukashenko has relied heavily on Russian financial support for Belarus’ stagnant economy. According to some people, he received more than $ 100 billion during this period. USD, mainly in the form of oil and gas subsidies.

The Belarusian leader takes advantage of the fact that Russia needs small neighbors as a buffer state against NATO and as an export route for oil and gas. Putin does not want another leader of the neighboring country to be overthrown by protesters, as in 2014. It happened in the Ukrainian capital, Kiev, where the Maidan revolution took place.

Putin “must support Lukashenko, otherwise his regime will collapse,” said political analyst Dmitry Oreškin. “The events in Belarus are a very dangerous example for the Kremlin of what could happen in Russia,” he added. “People will see that mass protests can change leaders.”

For this reason, the destinies of both presidents are intertwined, says my analyst.

Although Lukashenko would have benefited from a larger sum, both he and Putin benefited from Monday’s meeting, said Ryhor Astapenia, a member of the London-based Chatham House think tank.

‘A. Lukashenko is saved in economic terms. At least for a while – said the expert. “And Putin can be sure that Russia’s influence in Belarus will only increase.”