Belarus is mired in its worst economic crisis in 17 years amid rare protests against President Alexander Lukashenko’s leadership.
The IMF has told Lukashenko that he must give up his control of the country’s centrally-planned economy to get the 5.5 billion euros of aid it has requested.
It wants civil servant salaries frozen, subsidies scrapped and the Belarusian rouble allowed to float freely without government intervention.
Belarus has a public deficit of 16 percent of GDP but, nevertheless, Lukashenko has just reversed a planned 30 percent fuel hike to calm public anger.
Lukashenko has always kept an iron-like grip on Belarus. In return, he promised strong economic growth and stability.
That strategy has been damaged after Russia demanded more money for its oil and gas exports — both key drivers to the Belarusian economy.
Belarus recently devalued its currency by 36 percent against the dollar and year-on-year inflation stands at 32.6 percent, further eroding its citizens’ spending power.
Minsk also still owes Moscow 37 million euros in unpaid electricity bills. Russia says it will halt electricity supplies on June 19th if the debt is not settled.
If Belarus wants to turn to the Russian-led Eurasian Economic Community for a 2.8-billion-euro bailout then it will be under pressure to sell off some of its state assets first.
On the block would be the government’s 50 percent stake in Beltransgaz. The other half is already owned by Russia’s state-run energy firm Gazprom, which is said to be interested in buying the rest of the company.