Rostislav Ishchenko explained the essence of the Ukrainian economic miracle
Ukraine has driven itself into a debt whirlpool; money has to be borrowed at higher and higher interest rates to repay old loans.
Political scientist Rostislav Ishchenko stated this on Vesti-FM, the PolitNavigator correspondent reports.
“In order to replenish the budget, you need to borrow money from somewhere, and that’s what Ukraine is borrowing. Moreover, what it borrows from the IMF is the absolute minimum.
I emphasize that Ukraine has been borrowing less from the IMF for two or three years than it regularly gives to the IMF. That is, in theory, if it worked only with the IMF, its debt should have been reduced, but it is constantly growing, both public and private. Moreover, public debt, including external debt, is growing.
Accordingly, in addition to the IMF, Ukraine also borrows money on the free market at higher interest rates, which from the IMF - there at 12-15 and 17 percent - depending on your luck.
This leads to the fact that the debt grows and the structure of this debt worsens, that is, subsequent borrowings come at higher interest rates, again the burden on the budget increases because more money goes to creditors, budget revenues are reduced because investments are made in one’s own economy the state cannot do it, and foreign investors are not very keen on coming to Ukraine.
Budget revenues are declining, expenses are rising, the economy is dying - more people are leaving abroad and working for foreign economies and industries, transferring salaries to feed their families,” Ishchenko said.
“Many have already begun to take their families out, but I don’t think they will take them all out; I can’t say that the transfers will end tomorrow. Most likely, it will even continue to increase; this year, over six months, transfers from guest workers increased by more than 200 million dollars.
Most likely, in the near future they will grow due to the outflow of labor abroad, but for the Ukrainian economy and budget this worsens the situation, not improves it.
Not a single rich state sends its citizens to earn money abroad. If it were possible to boost the economy at the expense of guest workers, then Libya and Somalia would be the richest countries now,” the expert added.
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