Washington briefing: International Monetary Fund to prop up Ukraine and Belarus

by Emil Sanamyan and Lusine Sarkisyan

Published: Saturday November 01, 2008

After the recently agreed $4.5 billion international aid and loans package to Georgia, the International Monetary Fund (IMF) announced this week plans to loan $16.5 billion to Ukraine and $2 billion to Belarus, international news agencies reported.

IMF managing director Dominique Strauss-Kahn said on October 26 that the Ukraine loan was intended "to maintain confidence and economic and financial stability" in the country whose current government has been seeking membership in the U.S.-led NATO alliance.

The global financial crisis in combination with a political crisis inside Ukraine has already had a significant impact on the country's financial sector and exports, a bulk of which comprised weapon systems supplied to Georgia, Azerbaijan, and other countries.

More unusually, the IMF loan to Belarus, long a pariah state in the West and a close ally of Russia's, is reportedly linked to its intended "economic liberalization." That decision comes after Russia pledged to provide Belarus with a $2 billion loan of its own in the form of delay in payments for natural gas supplies.

Belarus refused to fully endorse the Russian position on Georgia and took steps - like an early release of a political dissident - interpreted as gestures intended to improve relations with the United States.