OREANDA-NEWS. March 26, 2012. The International Monetary Fund (IMF) made it clear for Belarus that they could develop a new stand-by programme for the country, if the government showed a sustainable commitment to reforms. Christopher Jarvis, leader of the IMF team that visited Belarus during February 22 to March 5, 2012, stated that a press-conference in Minsk on Monday.

Referring to Belarus’ application for IMF support, Mr. Jarvis emphasized that before negotiating a new programme, which must be approved on the highest level, the IMF would have to make sure that the Belarusian government was up to deep structural reforms.

“We also talked about Belarus' request for IMF financial support. Program negotiations would require an agreement among all policy makers, including at the highest level, to adopt a comprehensive and consistent package to restore stability and to embark on the path of deep structural reform,” Mr. Jarvis said.

“We would also need to be confident that a new program would be supported by the IMF’s membership,” he added.

In particular, the IMF recommends liberalizing prices, giving managers in state enterprises more autonomy, making it easier for labor to move from declining industries to expanding ones, and increasing the role of the private sector, the mission leader specified.

Belarus’ macroeconomic stability in 2012 will depend whether the government succeeds in sustaining the tough macroeconomic policy pursued by the Government and the National Bank over the last few months, Mr. Jarvis said.

“Much of their success is due to good policies,” The IMF representative referring to the progress made by the Government and the National Bank of Belarus during the past few months on bringing down inflation and narrowing external imbalances.

“This is a good platform to build on, but there is still a lot of work to do.

“The relative stability in the economy also gives the Government and the National Bank an opportunity to think about longer term goals. The Government should design a fiscal policy which will keep government debt at sustainable levels over the next several years. The National Bank should target low rates of inflation, with exchange rate flexibility, a combination of policies which will reduce the current account deficit further.

“However, I would like to warn against aiming for all the targets set by Belarus’ five-year plan. The attempt to reach a very high economic growth in 2010 played its part in the 2011 year crisis. I am not sure whether the government and the National Bank would like to make the same mistake twice,” Mr. Jarvis said.