EBRD adopts new strategy for Belarus

By Richard Wallis

A new three-year strategy for Belarus adopted by the EBRD will enable the Bank to increase its engagement in this country of nearly 10 million people, subject to the authorities implementing sector-specific reforms promoting a market economy.

The strategy was adopted after an extensive consultation process involving civil society organisations in Belarus, the Belarusian authorities, the international community and other important stakeholders.

As in previous strategy periods, the Bank’s overriding priority for Belarus will remain providing support for the development of the private sector as a means of promoting progress towards the ultimate goals of political democracy and market economics.

The EBRD welcomes the greater willingness shown by the authorities towards working with the international community and recognises that there have been encouraging signs of progress on the political and economic fronts. Further positive developments in these areas would contribute to the creation of a more favourable business environment.

Continued progress in these areas will enable the Bank to increase its activities in Belarus, including working with state-owned entities on a limited and highly selective basis, provided they operate on commercial principles and meet the Bank’s stringent lending criteria. Previous EBRD Board-adopted policies restricted the Bank to financing only private sector projects in Belarus.

The new strategy spells out how the Bank could, for example, offer technical assistance and potentially financial support for the authorities’ stated intention of developing an open, transparent and competitive privatisation programme to build confidence in the process. This would support the package of policy measures agreed between Belarus and the International Monetary Fund (IMF) and the World Bank (IBRD) in which privatisation plays a prominent role.

The Bank will also consider expanding its dynamic small business lending and trade financing programmes to include, on a selective basis, state-owned banks for the first time, as long as they are commercially oriented and have credible privatisation prospects.

Other business priorities for the Bank in Belarus during the new strategy period include promoting energy efficiency and the development of sustainable energy resources; expanding the EBRD’s Trade Facilitation Programme to encourage cross-border business; and providing support for the reform and technical upgrade of environmental infrastructure and municipal services.

The level and scope of the Bank's engagement in Belarus will be calibrated in such as way as to respond to changes in policy direction and progress in implementing a credible reform agenda.

The Bank will continue to conduct an active policy dialogue with the Belarusian authorities on a range of needed reforms and will monitor progress against a set of benchmarks in the political and economic spheres. The criteria the EBRD will use are listed in the strategy document.

The Bank will report every year to its Board of Directors on whatever movements there have been in respect of these benchmarks, thus allowing the EBRD’s management and shareholders to work out an appropriate response to changes on the ground.