By Vladimir Khromov
In June 2011, the President signed a decree to create the Development Bank, founded by the Council of Ministers and the National Bank. It has appeared infrequently in the news, except on the occasion of being headed by former Deputy Prime Minister Sergey Rumas, who took his position last year.
The Development Bank aims to fund Government programmes and socially significant investment projects, taking some of the former workload of Belarusbank and Belagroprombank. By the end of 2012, the Ministry of Finance had injected Br3 trillion into its authorised capital — increasing it more than 150-fold. Its success is already apparent, having financed 11 state programmes last year and generated profit of Br1.5b (despite profit not being its aim). Its organisational efficiency is keeping operating costs to a minimum, allowing interest rates on loans to be kept below market rates.
Already, the Bank is in top position regarding the basic indicators and is among the top three Belarusian banks for its assets. Mr. Rumas does emphasise, “The Development Bank has not been created to compete with commercial banks. It acts as a special financial institution to stimulate the economic development of the state and to raise the reliability of the financial and credit system of Belarus. Its purpose is to finance major investment projects within state programmes and to purchase existing similar loans from other banks.”
Prime Minister Mikhail Myasnikovich appeared at the bank’s presentation ceremony, having headed its Supervisory Board, and noted that commercial banks will still play a vital role in economic development. “There’s enough work for everyone, since the scale of modernisation planned requires vast resources. We should use them wisely, following the President’s extremely challenging task. All modernisation projects must prove effective financially and within strict time constraints,” he asserts.
The PM warns those expecting easy access to loans that all proposals will be assessed for their efficiency and economic viability before funds are released, regardless of the ‘importance’ of the state enterprise making the application.
Mr. Lukashenko has expanded the Development Bank’s scope with a recent decree granting it the status of an agent of the Government for external borrowing, allowing it to stimulate exports. A co-operative agreement has already been signed with the Development Bank of China and more such liaisons are planned to support foreign borrowing. The major rating agencies have begun their assessments.
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The First Vice Prime Minister of Ukraine, Sergey Arbuzov, has noted that, in 2013, his country is creating its State Development Bank to fund commercial banks seeking to give loans for modernisation.
