Экономические науки/3.Финансовые отношения

Laputina G.I., Mironenko D.A.

Scientific adviser: Martynovich V.G.

Polessky State University, The Republic of Belarus

The cooperation of the International Monetary Fund and the Republic of Belarus

The International Monetary Fund (IMF) is the international organization that was created in Bretton Woods, United States, in July 1944. The IMF is the central institution that encourages the international monetary system and promotes balanced expansion of world trade, reduced trade restrictions, stable exchange rates, minimal trade imbalances, avoidance of currency devaluations, and the correction of balance-of-payment problems. The IMF formally came into existence in December 1945 [1].

The IMF monitors the financial and economic policies of its members. It monitors economic developments on different basis: national, regional and global. The IMF advises its member countries on financial questions.

The IMF provides loans to countries that have problems with their international payments and can't find differently sufficient financing on available conditions. Due to this financial assistance countries have an opportunity to recover macroeconomic stability. It becomes possible due to restoring their international reserves, stabilizing their currencies, and paying for imports. The IMF also provides concessional loans to low-income countries in order to help them develop their economies and reduce poverty [2].

Now there are 188 countries (The United Kingdom, Switzerland, Lithuania, Belarus and so on) as a part of the IMF.

Belarus has been an IMF member since 1992. The IMF operation in Belarus is aimed at working together with the government and the National Bank in preparing economic policy documents, focusing on taxation, budgeting, maintaining exchange rate, and implementing trade policy for the sake of achieving considerable economic growth, low inflation and a stable balance of payments. [3].

The reserve position of the Republic of Belarus in the IMF consists of funds deposited with the Government of the Republic of Belarus in the General Resources Account of the IMF, which if necessary can be used by the Government of the Republic of Belarus [4].

The IMF works with the Government and the National Bank of Belarus in the preparation of policy programs with a focus on fiscal and monetary policy, exchange rate and trade policies in order to achieve significant economic growth, low inflation and balance of payment. Representatives of the Republic of Belarus regularly participate in various activities of the Fund, including the annual meetings of the Board of Governors of the IMF.

Until 2009, the country used the resources of the Fund for the three programs to support economic reforms in the country.

A new stage of cooperation between Belarus and the IMF began in 2009. January 12 Board of Executive Directors of the Fund approved the allocation of financial resources, the Republic of Belarus under the program stand-by. The first tranche of the loan went to Belarus in January 2009, the last – in March 2010. The total cost of the program amounted to about 3.5 billion of US Dollars [5].

The program, which ended in April 2010, will maintain stability in the foreign exchange market, to ensure greater stability of the financial system, to avoid a balance of payment crisis, to prevent recession and maintain a low level of unemployment.

Despite the end of the program Stand-By, IMF’s experts have carried out a number of visits to the Republic of Belarus in 2011 – 2013 to assess its economic policies and the development of new offers to improve the efficiency of its functioning [6].

It should be noted that nowadays quota of Belarus in the IMF is 386.4 Millions of SDRs (Percent of Total – 0.16). Chair of the Board of the IMF from the Republic of Belarus is Pavel Kallaur, Chief Executive Officer of the National Bank of the Republic of Belarus. Alternate Governor of the IMF from the Republic of Belarus is Vladimir Amarin (the Minister of Finance of the Republic of Belarus) [7].

Official reserve assets of the Republic of Belarus in the IMF on March 2015 are 4,560.50 millions of US Dollars, including 2,344.20 millions of US Dollars of Foreign currency reserves (in convertible foreign currencies), in March 2015.

Foreign currency loans, securities, and deposits amount -6,273.20 millions of US dollars and Contingent liabilities in foreign currency – -1,164.00 [8].

An International Monetary Fund team led by Mr. David Hofman visited Belarus during March 5–16 to hold 2015 Article IV Consultation discussions. The team met with Prime Minister Andrei Kobyakov, Chair of the Board of the National Bank of the Republic of Belarus Pavel Kallaur, First Deputy Prime Minister Vasily Matyushevsky, Minister of Economy Vladimir Zinovsky, First Deputy Minister of Finance Maxim Ermolovich, and representatives from business and the diplomatic community.

At the end of the mission today in Minsk, Mr. Hofman made the following statement that the economic model of Belarus still remains highly vulnerable to negative economic processes in the world. As an example the situation of the recent market turmoil caused by deterioration of environment was presented. Mr. Hofman also noted that this vulnerability of the economic model doesn't allow Belarus to reach sustainable economic growth. So constantly repeating attacks of expansionary macroeconomic policies led to inflation and external imbalances of the country and left it highly dependent on external financing.

Therefore, Belarus can reach sustainable future growth and break with the cycle of recurrent crises only by means of implementation of deep structural reforms. So the authorities are aimed to accept and realize ambitious and frontloaded reforms which will lead to an increase in the market orientation.This scheme should include price liberalization, the swift phase out of mandatory targets for enterprises, plausible plans for privatization in such sectors as corporate and banking, strengthening safety nets in order to protect the defenseless [9].

So, the IMF`s cooperation with the Republic of Belarus is realized in three main areas:

- cooperation with the Government of the Republic of Belarus and the National Bank in the preparation of policy programs with a focus on fiscal and monetary policy, exchange rate, trade policy, support of the balance of payments

- providing, if needed, credit;

- technical expertise.

The development of relations with the IMF is a signal to foreign states and foreign investors to allocate loans for intergovernmental lines and large-scale foreign direct investment.

Loans granted by the IMF in the past period were mainly used to strengthen the economy of our country, and their allocation and using by our country has been successful.

List of references:

1. InvestingAnswers: the hottest investment trends and bold financial predictions. – Mode of access: http://www.investinganswers.com/financial-dictionary/economics/international-monetary-fund-imf-984. – Date of access: 02.05.2015.

2. International Monetary Fund. – Mode of access: http://www.imf.org/
external/about/ourwork.htm. – Date of access: 28.04.2015.

3. Радио Беларусь. – Mode of access: http://www.radiobelarus.tvr.by/
be/node/7183. – Date of access: 03.05.2015.

4. National Bank Of The Republic Of Belarus. – Mode of access: http://www.nbrb.by/statistics/reserveassets/imf.asp. – Date of access: 28.04.2015.

5. Ministry of Foreign Affairs of the Republic of Belarus. – Mode of access: http://mfa.gov.by/mulateral/organization/list/a96aad9808506c51.html. – Date of access: 28.04.2015.

6. National Bank Of The Republic Of Belarus. – Mode of access: http://www.nbrb.by/today/InternationalCooperation/imf. – Date of access: 14.04.2015.

7. International Monetary Fund. – Mode of access: http://www.imf.org/external
/np/sec/memdir/members.aspx. – Date of access: 14.04.2015.

8. International Monetary Fund. – Mode of access: http://www.imf.org/external/np/sta/ir/irprocessweb/data/blr/eng/curblr.htm. – Date of access: 14.04.2015.

9. International Monetary Fund. – Mode of access: http://www.imf.org/external/
np/sec/pr/2015/pr15117.htm. – Date of access: 28.04.2015.