belarus focus areas

Priorities

The latest country strategy, approved in December 2006, continues with the three-level (baseline, intermediate and regular) scenario approach adopted since 1997. The Bank currently follows the baseline scenario, which excludes any funding of public sector projects and mandates that all of the Bank’s operations must demonstrate that the proposed investments are not effectively controlled by the state or state entities, and that government officials will not personally benefit financially from such investments.

The strategy identifies the following priorities for the Bank in Belarus:

• Until sufficient progress is made on a number of political and economic benchmarks, the Bank will focus on portfolio management of existing investments in Belarus, including continued support to micro and small enterprises (MSMEs) through approved Lines of Credit with privately-owned banks
  
  
• Advisory services to small and medium-sized enterprises (SMEs) via the Bank’s TurnAround Management (TAM) and the Business Advisory Service (BAS) programmes, provided funding from donors is made available
  
  
• Selective direct investments in local and foreign private companies, including through the Direct Investment Facility (DIF) programme
  
  
• Expansion of the trade facilitation programme to additional bona fide private banks

In accordance with the need to support private MSMEs, Foreign Direct Investment, as well as competition in the financial sector, the Bank will consider providing MSME credit lines directly to individual private banks, and equity investments in private banks, together with related technical assistance, when the investments are small and particularly if this can be done alongside reputable international strategic investors, and the State has no control, including veto power over decision making.

If substantial progress is made in democratic reforms and if the authorities embark on a consistent programme of economic liberalisation and reform, the EBRD would be in a position to conduct a broader range of operations either on an Intermediate or a Regular Scenario. As in the past, the Bank will employ a number of benchmarks in gauging political and economic progress. Should evidence of significant progress under these benchmarks emerge, the resultant improved investment climate would allow the Bank to consider on a project-by-project basis and in consultation with the Board of Directors, further involvement in the Belarus economy.