The financially struggling former Soviet republic of Belarus is to receive a $3 billion loan from a Russia-dominated group in exchange for privatizing a large chunk of its state-controlled economy.
The loan, which is to be distributed over three years, was approved Saturday at a meeting of the finance ministers of the Eurasian Economic Community, which comprises six former Soviet republics.
Analysts have said Belarus may need as much as $9 billion in aid to get the economy on track. Belarus this month said it was asking the International Monetary Fund for a loan of up to $8 billion.
Belarus' national bank last month cut the value of its ruble by almost half against the dollar, and store shelves have emptied as residents rushed to buy up goods.
Russian Finance Minister Alexei Kudrin said the terms for the $3 billion loan to be provided over three years require Belarus to privatize state enterprises worth an estimated $7.5 billion during the same period.
The enterprises to be privatized were not specified, but Russia has had its sights on Belarus' energy assets such as oil refineries and Beltransgas, the state-owned gas pipeline network that supplies domestic homes and forwards the gas to Europe. Russia's state energy giant Gazprom already owns 50 percent of Beltransgas and is currently negotiating to buy the remaining 50 percent, a step Belarus has long resisted.
Economists place much of the blame for Belarus' financial woes on authoritarian President Alexander Lukashenko, who oversaw an increase in social spending before his re-election late last year. The IMF cited that as a key drag on the economy.
Lukashenko, in power since 1994, has maintained a quasi-Soviet economy complete with a social safety net that helped maintain his popularity.
But the ineffficient economy relied heavily on subsidies from Russia, including below-market energy supplies. Those subsidies have dwindled as Moscow pushes for control over Belarus' most prized economic assets.