…ukraine economy now booms, with massive us$ infusion…Posted: 2014-04-25
…as the mischief was clumsily afoot, the ploddingly slow of thought never quite envisioned the consequences of their actions – all too predictable, that law of unintended consequences…
A cursory glance at the economics and political economy of the Ukraine should have given pause to the exceptional roving band of obtuse mischief makers gone berserk with their obsession to destabilize, dismember or destroy any non-subservient countries, especially those with valuable resources. Flush with failure they become ever more inspired – economic reality, a mere irrelevance.
Data from the very World Bank and the IMF are there for a quick analysis of the obvious – the Ukraine’s economic and financial links to Russia, its undiversified and undeveloped economy, its dire economic plight and its historic endemic corruption, not all overnight events.
Tim Taylor over at conversable economist facilitates matters in his post of a little over a month ago, Primer on Ukraine’s Economic Troubles. And what can we glean? A glance,
But by December 2013, the economic situation in Ukraine was looking dire all over again. The same cycle of large trade deficits, capital inflows that turned on and then turned off, and banks that couldn’t repay their international loans had surfaced all over again. But this time, the IMF felt that Ukraine had not kept its promises of reform in 2008, and was reluctant to step in again. That’s when Vladimir Putin stepped up with his plan to buy $15 billion in Ukrainian bonds and also to offer lower natural gas prices.
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And with regard to the Ukraine’s adherence to its agreements, here the case of the IMF, Taylor states,
The IMF writes that Ukraine has “low program policy ownership,” which basically means that the government doesn’t do what it says it will do, like trimming back on energy subsidies and wage subsidies.
Whereas Taylor’s analysis is more than sufficient analysis of the Ukrainian economy, for comparison it is instructive to have a look at another economic perspective from the much maligned RT.[‘And, yes, there had been that failed attempt to undermine trust in RT – which is much less unreliable than almost all corporate MSM, including the ‘Beeb’.]
The difference is that the columnist,, Martin L Young is unsparing in irony and sarcasm, in his article, Free-fall: IMF to accelerate Ukraine’s economic collapse? . Sample of observations,
Maidan dreams are turning abruptly into a nightmare as coup gives way to penury. Siren voices from the West have lured the Ukrainian economic ship on to the rocks with the IMF about to launch a lifeboat – replete with economic subjugation as bondholders get paid and citizens suffer.
Enduring a triple dip since 2008, economists predict the 2013 recession will involve a 5-20 percent GDP loss – a catastrophic depression akin to Greece. Nobody knows how much Ukraine may need to survive – a $50 billion package? The IMF may rapidly solve a century of economic mismanagement with one enormously recessionary package…but at what cost to Ukraine? Is a failed state in the making? Could economic pressure precipitate breakup from within?
Or will Ukraine simply avoid the pain? Twice since 2008 IMF loan tranches have been frozen due to government foot dragging on reform. Can any government stay the course? The Western embrace is about to turn very chilly for Ukraine’s citizens. Extreme nationalists are already voicing dissent.
The nightmare has barely begun: Will the Maidan yet swell with impoverished pensioners who cannot afford to heat their homes?
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RT continues with its report on the Ukraine with news from the IMF, IMF unlocks up to $18 bn for Ukraine’s shattered economy. A key observation,
Ukraine’s economy is expected to slide 3 percent in 2014, according to the country’s Finance Minister Oleksandr Shlapak. The hryvnia has lost 24.7 percent against the dollar this year, which has made it the worst performing currency among more than 170 surveyed by Bloomberg.
And with regard to the hrynvia, the last chart of Taylor’s ‘Primer’ shows the performance of the currency relative to the euro. As we know, loans agreed in hard currency become more expensive when the national currency depreciates, and depreciates badly.
With the EU pledging additional billions of euros to a non-member, in comes the exceptionally-informed US vice-president to promise a massive US$50m. Yes, US$50m! Clearly then, the Ukraine (or what will remain of it) should have enough money for its imposed officials and for the country’s increasing economic challenges, even if temporarily. The occasionally attentive would have noticed that the vice-president was a key pawn in one of the planned moves in the one-player game – Nuland: ”…Sullivan’s come back to me saying you need Biden and I said probably tomorrow for an ‘atta boy’ and get the deeds to stick so Biden’s willing.”
Of course, one way to service its debts (to Russia in particular) and ‘restart’ the economy would be for the Ukraine to privatise, to sell off state-owned enterprises, land and other natural resources – just as had been recommended for, and foolishly followed by, those other countries whose citizens have since learned the bitter lesson on the close relationship among the likes of the IMF, the World Bank, the foreign financial interests and the MNCs. In such deals the intended beneficiaries will clearly benefit, and the goals of the putsch would have been achieved.
Thus, there is no doubt that the economy of the Ukraine must power on. Mission Accomplished.