Despite the fact that Belarusian cheese and butter imports account for 13-15 percent of all cheese and butter imported by Russia, experts say the measures will have a limited effect on the Russian domestic market since Belarus is not the sole exporter of dairy products to Russia. Besides, the importance of Belarusian supplies decreased following lower import duties imposed by the Russian government on foreign dairy products.
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It is quite obvious that rising global wheat prices have had an impact on Belarus. Belarusian President Alexander Lukashenko requested Russia for $1.5 billion in stabilization loan once again. President Lukashenko attempted to secure a loan in May without paying back a $456 million debt for Russian gas supplies. Subsequently, Belarus repaid its debt to Russia, which refused to loan money anyway. Now the situation is slightly different. According to Alexander Surikov, a Russian ambassador to Belarus, the country is now entitled to receive a $1.5 billion stabilization loan from Russia because “Belarus has a budget deficit” now that its budget has been recently reviewed.
Moscow has repeatedly offered Minsk to take a stabilization loan to the amount of $1.5-2 billion on a 5-year redemption schedule at 8.5 percent interest.
Russian Minister of Economic Development and Trade German Gref confirmed February that Russia could consider the issue of a stabilization loan for Belarus.
Now the outcome largely depends on Lukashenko’s attitude toward Russia, which could lend money provided that a borrower is Russia’s friend. Although Russia can feel the pressure of the global wheat prices, the overall status of the Russian economy has not deteriorated in terms of the world economy. Although the price of dairy products rose in the Russian Federation, the world oil prices continued to rise too, reaching a new all-time high last week. U.S. light sweet crude rose 2.9 percent to $86 per barrel at NYMEX on Tuesday as traders awaited a military operation to be launched by the Turks against the Kurds in Iraq, the world’s No 3 in terms of proven oil reserves.
The world oil prices are on the rice – a trend that helps the Russian economy grow at a higher rate. Earlier this month Russian Finance Minister Alexei Kudrin predicted the country’s annual GDP growth at 7.3 percent plus a 20 percent increase in investments. “The economy’s dynamics exceed the most daring plans,” Kudrin said. However, the forecast was updated last Tuesday. According to the IMF report “The Global Economic Review,” the GDP rate in Russia should reach 7.8 percent in 2008.
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