Pyotr Prakapovich: “American sanctions frighten away investors”

• 15.05.2008, 11:19

Sanctions, imposed by the US against Belarusian Belneftekhim company harm the image of the country and frighten away potential investors, head of the National Bank of Belarus Pyotr Prakapovich told to Reuters.

The US blocked the accounts of Belneftekhim and its subsidiaries, and banned its companies to deal with them, seeking earlier release of oppositional leader Alyaksandr Kazulin, sentenced to five and a half years in prison for riot organising.

“Today, the main issue for us is our country's image. Imposing sanctions on Belneftekhim is not a significant matter in itself. But investors hearing of this may, of course, think again. Everyone is waiting to see how this will turn out,” Prakapovich told.

“These are artificially generated risks ... Political issues must be resolved by political and not economic means,” he added.

Last year Minsk sold state stakes in some middle and small banks to foreign investors, including Russian VTB and Vnesheconombank. This year Minsk has announced ambitious plans on privatisation in banking sector, which will allow at least six foreign banks to enter the Belarusian market. According to the National Bank’s head, the western sanctions can influence investment plans.

Minsk plans to sell control of Belinvestbank to Commerzbank and cede Belpromstroibank’s control stake to a western investor.

“We are creating all the conditions to bring in investment, but as a result of these issues, investors could delay decisions to come and could reconsider. This is in the end negative for both us and the investors themselves,” the head of the National Bank said.

Sanctions against Belneftekhim and dispute on release of Kazulin led to a diplomatic conflict between Minsk and the US. As the result Belarus gained that the US cut its embassy staff in several times and the US ambassador left Belarus.