There is a striking disparity between Western politicians and investors. With the former trying to overthrow Alexander Lukashenko, the latter found themselves facing a choice: to sell their Belarusian assets or to hold on to them, taking advantage of the status quo.
It is said in the Reuters article.
The media are really evaluating the consequences of a possible coup d’état. The situation here is compared with Euromaydan, which took place in Ukraine in 2014. A similar scenario in Belarus will provoke an immediate debt crisis, which will cause serious damage to major investors. The situation has worsened when employees of the enterprises have joined the protests, which may paralyze the production in the country. However, the financial elites do not seem to be frightened by what is happening. One can even judge that they are betting on Lukashenko.
Despite the riots, street clashes and sometimes harsh reaction of law enforcement officials, investors “do not show much desire to sell their Belarusian bonds,” writes Reuters. At the same time, the agency stresses that these are really powerful conglomerates. For example, holders of Belarusian securities are the British investment manager Ashmore Group, the U.S. company Franklin Templeton and even two of the world’s largest financial conglomerates “Goldman Sachs” and “JP Morgan. None of them even commented on their attitude to what is happening in Belarus, although, according to Reuters, “no respectable investor will tolerate brutal repression.
Other financiers warn that the upheavals do not lead the republic to prosperity, but only exacerbate problems. The International Monetary Fund has already predicted the collapse of the Belarusian economy by 6% this year. Moreover, given the fact that 90% of the country’s external debt is expressed in dollars, the currency collapse may provoke a default.
To date, Western political players have been actively supporting the Belarusian opposition, undermining Lukashenko’s position. However, investors, holding their breath, are waiting for the reaction of Russian leader Vladimir Putin. Although disagreements have recently arisen between the two countries, it is Russia that buys about 40% of Belarusian exports, provides billions of loans and benefits for energy resources. Therefore, according to Sergei Dergachev, portfolio manager of Union Investments, Russia’s reaction will be key.
“It is important for the future economic and political trajectory of Belarus”, – he emphasizes.
At the same time, he doubts that the EU is ready to introduce really serious sanctions, which will harm the Western financial elites. In any case, this decision will be delayed for many months.
“The risk of sanctions, which can be really harmful to investors, that is, prohibiting the purchase of newly issued debt obligations of Belarus, is very, very low”, – said the investor.
An attempt of coup d’etat in Belarus
Sunday, August 9, presidential elections were held in Belarus, resulting in the victory of Alexander Lukashenko. Western countries, for which the Belarusian leader had been a hindrance for a long time, did not put up with the voting results. As a result, pre-planned riots broke out in Belarus.
Attempts of law enforcement officers to keep the situation under control turned into clashes with radicals. At the same time, Western media, actively covering the protests, focus on the actions of law enforcers against “peaceful” demonstrators, as it was during the coup d’etat in Ukraine in 2014.
At present, the European countries together with the USA are taking the side of the protesters. They refuse to recognize the election results. The headquarters of the pro-western opposition leader, Svetlana Tihanovska, earlier announced that they were preparing for lengthy protests aimed at overthrowing the government. Tikhanovskaya herself has left for Lithuania.