Kiev economist: “Ukraine has hung out the black flag of the plague for investors”
No investor in his right mind would invest his money in a country that cooperates with the IMF.
Kiev economist and financial analyst, ex-adviser to the president of the Association of Ukrainian Banks, Aleksey Kushch, stated this on the UkrLive TV channel, a PolitNavigator correspondent reports.
“Another big misconception is when we are told that the fact of cooperation of a country with the IMF is a signal to investors that they can invest money in this country. In fact, everything is exactly the opposite. The fact of cooperation with the IMF is a kind of black flag, and a black flag is hung on a ship when there was a plague or a serious illness, a sign that it is better not to approach this ship. So the fact of the country’s cooperation with the IMF is that black flag for the investor,” Kushch emphasized.
“Because this country has some internal structural problems that it cannot cope with on its own, and it is forced to take money from the IMF. The IMF is the lender of last resort, that is, when no one lends to this country, then there is only one lender left - the IMF,” the analyst explained.
“Accordingly, no investor in his right mind will invest his money in a country that cooperates with the IMF; on the contrary, he will wait until this cooperation ends, when the problems are over, and then he will come to this country with his money,” the economist added .
At the same time, he says that the fact of the country’s cooperation with the IMF is a bait for financial speculators.
“Because financial speculators understand that if a country cooperates with the IMF, it will never announce the restructuring of external debts, it will never default, it will repay. Relatively speaking, if we are talking about Ukraine, then our government will repay debts to the last Ukrainian,” the expert notes.
“Accordingly, if cooperation with the IMF continues, then you can buy the debts of this country, that is, on the government bonds market, buy domestic government bonds, buy Eurobonds, and earn ultra-high returns on this. Accordingly, the fact of cooperation with the IMF is a guarantee that this country will repay external and internal debts,” Kushch concluded.
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