The International Monetary Fund is prepared to give Ukraine up to $14 billion to help stabilise the country’s financial system, a senior Ukrainian official said on Friday, as it sought to cool nerves over its debt and currency.
IMF officials met the country’s leaders on Friday and an adviser to the ex-Soviet state’s president said two to three weeks were needed to clinch an agreement on a credit facility.
Other countries, like Hungary Iceland and Serbia, are also seeking help to find remedies to jolts sustained from the world financial crisis. Ukraine’s approach is complicated by divisions in its leadership after a government break-up.
But the IMF wants certain things done if the country is to get the cash it needs. All adjustments made by a government is geared toward business and not the best interests of the people.
The IMF is almost always in the news in one form or another. But what is the IMF all about.
The IMF describes itself as “an organization of 185 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty”. That is the official statement, but is it a true statement?
Countries that need an infusion of cash are put through a rigid plan of domestic adjustments to include:
1–cut government spending on education, health care, the environment and price subsidies on necessities like food, and cooking oils.
2–Devalue the national currency, accelerate the plunder of natural resources, cut real wages.
3–Liberalize financial markets so that short erm speculation portfolios will be attracted.
4–Increase interest rates to attract foreign capital, thereby increasing the failure of domestic businesses and creating new hardships on indebted individuals.
5–Eliminate tariffs and other controls of imports, which will put furthewr strain on domestic producers bec uase of cheap imports and that will increase the external indebtedness of the government.
None of these “adjustments” will be good for Ukraine, for exporters yes, Ukraine no. Watch the business news and see which of these conditions are met by the government of Ukraine.