Russia says Belarus seeking $3 billion in loans

By Gleb Bryanski

MINSK, March 15 (Reuters) - Belarus is seeking $3 billion in loans from Russia and an emergency fund that links ex-Soviet republics, Russian Finance Minister Alexei Kudrin said on Tuesday.

Kudrin, speaking during a visit to Minsk with Russian Prime Minister Vladimir Putin, said the loans would be conditioned on structural reforms to its Soviet-style centrally controlled economy and on privatisation.

"The loans will be linked to a number of conditions such as structural reforms similar to the ones requested by the International Monetary Fund," Kudrin said.

He said conditions may also include the elimination of currency restrictions in Belarus, which tightened foreign exchange controls on Tuesday.

Kudrin said Belarus was seeking $1 billion from Russia and $2 billion from an emergency fund run by ex-Soviet states. Most of the money in the fund comes from Russia and Kazakhstan.

"We are continuing talks," Kudrin said.

The loans would strengthen Moscow's already powerful influence on Belarus, whose longtime President Alexander Lukashenko has relied heavily on Russian largesse, mostly in the form of cheap energy supplies, to keep the economy afloat.

Belarus has deep historical ties with its far larger eastern neighbour Russia and is seen by the Kremlin as a buffer against the expanded European Union and NATO.

Kudrin spoke after Russia and Belarus signed a deal to press ahead with a stalled plan to build a nuclear power plant in Belarus and Putin said a decision on a $6 billion Russian loan to build the plant was expected within a month.

Lukashenko spent generously ahead of a December election in which he won a fourth term, and Belarus has been burning though central bank reserves following an increase in the price of imported Russian oil.

Belarus completed a successful IMF programme early in 2010, but his government's violent crackdown on opponents protesting the election could make it tough to secure new lending.

Lukashenko has sought to improve relations with the West in recent years, but the United States and European Union slapped new sanctions on the president and top officials over the arrests and prosecution of opponents and protesters.

Critics of Lukashenko in Belarus have expressed concern that privatisation will increase Russian influence.

"Privatisation is a necessary condition to attract foreign currency into a country," Kudrin said.

(Writing by Steve Gutterman; Editing by Diane Craft)


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