Belarus and the IMF

KEF 2017Minsk, November 2017

Bas B. Bakker Senior Regional Resident Representative

for Central and Eastern Europe

Belarus became IMF member on July 10, 1992—25 years ago this year.

IMF involvement with Belarus started even before independence

Late 1991, TA mission of IMF’s Central Banking Department. Left Aide-memoire on

“Monetary Management and Supporting Central Banking Reforms: Preliminary Findings and Recommendations, and Future Technical Assistance”

Resident Representative office opened in 1992

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Since 1992 there have been 11 resident representatives, 12 mission chiefs

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Resident Representatives(from 1992)

Willem Middelkoop

Istvan Szalkai

Richard Haas

Mark Horton

Zuzana Brixiova

Balazh Horvath

Neven Mates

Natalia Koliadina

Mark Allen

James Roaf

Bas Bakker

Mission Chiefs (from 1992)

Grant Spencer

Peter Hole

Henri Lorie

Ishan Kapur

Thomas Wolf

Marta de Castello-Branco

Thomas J. Richardson

Balazh Horvath

Neven Mates

Chris Jarvis

David Hofman

Peter Dohlman

Very important has also been the local staff, currently Julia (25 years!), Elena (21 years), Mariya, and Vladimir.

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Advisor

Julia Lyskova

Economists

Denis Krivorotov

Mikhail Pranovich

Anastasiya Luzgina

Alexander Egorov

Dmitry Bedok

Alina Kafarova

Mariya Sviderskaya

Office Manager

Elena Kovalenko

Drivers

Boris Burakov

Anatoly Kresik

Vladimir Dudal

Who interacted with 6 Central Bank Governors

Stanislav Bogdankevich (1991–1995) Tamara Vinnikova ( 1996–1997) Gennady Aleynikov 1997–1998) Piotr Prokopovich (1998–2011) Nadezhda Yermakova 2011–2014) Pavel Kallaur (2014-21xx)

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Belarus has had two STF and two SBA programs with the IMF

Start date Type of the program Amount approved Amount drawn

Jul 28, 1993 Systemic Transformation Facility SDR70.1 million SDR70.1 million

Jan 31,1995 Systemic Transformation Facility SDR70.1 million SDR70.1 million

Sep 12, 1995 Stand-By Arrangement SDR196.28 million SDR50.0 million

Jan 12, 2009 Stand-By Arrangement SDR2,269.5 million SDR2,269.5 million 6

0.0

0.5

1.0

1.5

2.0

2.5

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

IMF arrangements with Belarus and credit outstanding(SDR billion)

Systemic Transformation Facility

Standby Arrangement

Standby Arrangement

Systemic Transformation Facility

But relationship is much closer than suggested by number of programs

In recent years in particular there has been very close collaboration and high level contacts

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Belarus has also received IMF technical assistance and trainings

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0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1992 1997 2002 2007 2012 -

50

100

150

200

250

1992 1997 2002 2007 2012

Technical Assistance Delivery(person-years)

Staff Training(participant-weeks)

Some of the issues have changed

In 1992, Belarus was still in the ruble zone

Issue was how to make Belarus macro policies consistent with ruble zone membership

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But others not so much

From the 1994 Article IV Staff report

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How has Belarus done? The economy looks much brighter!

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Nightlights intensity

In 1992 In 2013

Income inequality has remained low

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Gini Index(from World Development Indicators)

Life expectancy has improved and compares favorably with other CIS countries

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Life expectancy at birth(years, from World Development Indicators)

Infant mortality is as low as in Scandinavia and the Netherlands!

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If we compare Belarus with its neighbors

Per capita income is higher than Moldova and Ukraine

Not as high as Poland and the Baltics

15

0

2

4

6

8

10

12

14

1991 1994 1997 2000 2003 2006 2009 2012 2015

Belarus has grown faster than Ukraine and Moldova

16

0

2

4

6

8

10

12

14

16

18

20

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

GDP per capita in thousands of 2016 USD (with updated 2011 PPPs)

Belarus

Ukraine

Moldova

Unemployment Rate(Percent)

Ukraine

Belarus

Moldova

Which is also visible on satellites

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Nightlights intensity

In 2013

c

c

In 1992

c

c

But Belarus has not done as well as Poland

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Nightlights intensity

In 2013In 1992

GDP in Poland has increased more and has been less volatile

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-15

-10

-5

0

5

10

15

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

Growth of GDP per capita

Poland

Belarus

0

5

10

15

20

25

30

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

Poland

Belarus

GDP per capita in thousands of 2016 USD (with updated 2011 PPPs)

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Income convergence toward the more dynamic CEE countries remains a key objective and challenge

0

10

20

30

40

50

60

70

80

0 10 20 30 40 50 60 70 80

SVK

CZESVK

LTU

EST

LVAHRV

MDABIH

UKR

RUS

BLR

ALBMNE

BGR

HUNPOL

ROUUVK

SRBMKD

Income and Price Convergence, 1995-2017(Percent of EU15)

GDP per capita, PPP

Pric

e le

vel

Note: 2000-2017 for BIH, UVK, MNE and SRBData points for 1995, 2000, 2006, 2012 and 2017

To the next 25 years of IMF-Belarus collaboration!

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Thank you