World Bank Country Director for Ukraine, Belarus and Moldova, Mr. Martin Raiser, has completed a three-day visit to Belarus as part of the ongoing policy dialogue on the structural reform priorities and the scope of World Bank’s advisory and technical assistance in Belarus.
Belarus is facing large external and domestic imbalances and a significant financing gap. The Government launched a gradual reform program in 2009. “However, developments in recent months have highlighted the need for stronger macroeconomic measures and simultaneously increased the urgency of structural reforms”, noted Mr. Raiser. “Structural reforms are needed to stimulate private sector job creation as the public sector is forced to adjust. At the same time there is ample room within public spending to make it more efficient and better targeted to those most vulnerable to the effects of the crisis.”
Mr. Raiser, accompanied by a group of Bank’ economists held discussions with Mr. Sergei Rumas, Deputy Prime-Minister, the World Bank’ Governor, and met with other senior Government officials and the National Bank.
Mr. Raiser took part at a seminar with government representatives on fiscal reform priorities. The size of the public sector in Belarus crowds out private sector investments and undercuts the competiveness of the economy. In this respect, the government requested the World Bank to look into key sources of fiscal pressure and present reforms option. A fiscal analysis demonstrates that rationalization and better targeting of expenditures in four areas, namely (i) pension, (ii) social assistance, (iii) housing and communal services and (iv) agriculture could generate savings of up to 4 percent of GDP annually.
Mr. Raiser also met with the recipients of the World Bank’s Civil Society Fund program, which has supported local non-government organizations particularly in areas such as increasing awareness of environmental issues, and strengthening the dialogue between citizens and local authorities around improving public services.
At the end of the visit, Mr. Raiser briefed mass-media on on-going World Bank’ activities to support the needed economic and structural rebalancing in Belarus. World Bank experts are carrying out several diagnostic reports on Belarus economic growth model, its public finances, and the regulation of its securities markets that aim to lay the foundation for the necessary deepening of structural reforms. “Notwithstanding the social achievements of the past, Belarus’ economic model has run out of steam, and in the face of the current macroeconomic imbalances, the time frame for achieving the necessary adjustment has significantly shortened”, concluded Mr. Raiser.
Belarus joined the World Bank in 1992. Since then, the Bank’s lending commitments in Belarus have totaled US$865 million for 12 projects; about thirty national programs received grant financing totaling US$22.8 million. Belarus is currently receiving World Bank financing for six projects to upgrade road infrastructure, to improve energy efficiency, water supply quality and waste management, and to develop infrastructure in Chernobyl-affected areas.