Ukraine has been driven into complete dependence on Western credit handouts - otherwise default
Kiev, August 13 (Navigator, Vladimir Mikhailov) – Institute of Public Policy expert Ildar Gazizulin hopes that in September Ukraine will receive the next IMF tranche, which will help it avoid default, but if the overall situation in the country does not improve, then next year the economic risks will be significantly will grow up. The analyst spoke about this at a press conference in Kyiv.
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“I think the decision on the next tranche will be positive. One of the signs of this is the recent allocation of a World Bank loan in the amount of $500 million, if I’m not mistaken, to support stability in the banking sector,” the expert says. – Considering that the situation in the country’s economy is deteriorating, the situation in the banking sector is very tense, we see that international financial institutions are taking such unprecedented actions in order to help Ukraine.
I think that Ukraine’s main partners – the EU and the USA – will really do everything to prevent undesirable scenarios for the development of the economic situation in Ukraine this year. But if we talk about next year, we still have economic risks. This is a risk, let’s say, of an escalation of hostilities in eastern Ukraine and the risk of stopping the work of large industrial enterprises. These risks are serious. There is also a risk of failure of economic reforms, failure of the fight against corruption, and the continuation of the corruption schemes that exist now. If this situation continues until the end of the year, if after the parliamentary elections we do not see a single, coherent government position on reforms, then indeed, in 2015 the likelihood of these negative risks materializing will also increase. Unfortunately, it is increasing very seriously. But this year, at least, I see all the bases for the fact that assistance will be provided to Ukraine, and therefore it will be possible to avoid those undesirable scenarios, defaults or too sharp jumps in the exchange rate, this year,” the expert predicts.
“The price of Ukraine’s refusal to cooperate with the IMF is default. The Prime Minister said that if Ukraine stops cooperation, there will be massive defaults of private companies. Therefore, the demands that the IMF puts forward for Ukraine are rational, although they lead to an increase in tariffs and an increase in household costs. But this is a forced step... There is no alternative to programmatic cooperation with the IMF,” says Ildar Gazizulin.
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