Russia yesterday announced the release of the first $800 million tranche of a bailout loan to Belarus aimed at helping its neighbour recover from its worst economic crisis since the Soviet era.
Moscow also criticised a new wave of sanctions slapped on the republic by Europe’s Foreign Ministers on Monday in protest over a crackdown on the opposition that followed disputed presidential elections last year.
A small group of former Soviet republics headed by Russia agreed to release a $3 billion loan to Belarus over three years under strict conditions that include its adoption of a wholesale privatisation programme.
Belarus has thus far failed to put its state firms up for sale.
The loan’s release was imperilled further by strongman President Alexander Lukashenko’s vow to shut down Russian media outlets operating in Belarus.
But Russian Finance Minister Alexei Kudrin told news agencies that “Belarus fulfilled all the formal obligations (on Monday) evening” and was issued the first payment yesterday.
The hard currency and basic goods shortage poses the most serious challenge of Lukashenko’s 17-year Presidency and has seen the mercurial leader make a series of at-times contradictory pronouncements.
He warned on Friday that he was ready to close the republic’s borders and require consumers to rely only on domestic goods if the economic situation deteriorated further.
Mr Kurdin said yesterday that Moscow reserved the right to review the release of additional money if Mr Lukashenko barred Russian goods from entering the republic.
Belarus is scheduled to receive its next payment of $440 million by the end of the year.
Russia has served as the increasingly isolated republic’s most important link with the outside world and on Tuesday defended its ally against another round of sanctions imposed by the European Union.
“We view such a policy as counterproductive, no matter how difficult the dialogue in the human rights arena might be,” news agencies quoted a Russian Foreign Ministry spokesman as saying. The new sanctions were the first to hit the business sector and targeted Mr Lukashenko’s economic adviser Vladimir Peftiev and his three local firms.