By Staff Report
- March 28, 2014
The International
Monetary Fund has agreed a $14-18 billion two-year bailout for Ukraine, a deal
to help it recover from months of turmoil that will also unlock further credits
making a total of $27 billion. The agreement, announced on Thursday, is
intended to help the heavily-indebted ex-Soviet republic stabilize its economy
after anti-government protests which resulted in the overthrow of President
Viktor Yanukovich and a standoff with Moscow in which Russia annexed the Crimea
region. – Reuters
Dominant Social
Theme: The IMF
rides to the rescue. What a relief.
Free-Market
Analysis: The
Ukraine debacle has exposed certain truths to the world about the way the West
operates and how the power elite destabilizes countries politically in order to
gain further control over them. IMF officials are doing themselves no favors by
participating, but doubtless have little choice.
This IMF tranche is not a
helpful gesture toward Ukraine so much as part of a calculated and continued
campaign of destabilization and occupation. It is the Internet Era itself that
is exposing these manipulations and making them considerably less effective in
the 21st century than in the 20th.
The release of a taped
conversation featuring senior US State Department official Victoria Nuland
plotting the political future of Ukraine was circulated via the Internet. As
were other provocations and deliberate "false-flag" operations
launched by the West to ensure that Russia would not dominate the whole of the
Ukraine, nor wield influence over it financially.
Now the IMF has played its part, rushing into
Ukraine with a program of funds worth US$27 billion. Here's more from the
article:
The
program of reforms that accompanies the support and which the IMF says is
necessary to get economy back on track and avoid a debt default may be painful
for the population and the new government at a time of crisis and uncertainty.
...
The agreement is also subject to approval by IMF Management and the Executive
Board, which will consider it in April. Conditions sought by the Fund include
allowing the national currency, the hryvnia, to float more freely against the
dollar, increasing the price of gas for the domestic consumer, overhauling
finances in the energy sector and following a more stringent fiscal policy.
IMF
mission chief Nikolay Gueorguiev outlining the proposed package said another
important step was to pass a law on public procurement aimed at restraining
corruption in the state sector and reducing state budget expenditure. Prime
Minister Arseny Yatseniuk, who has dubbed his government a 'suicide' government
because of the unpopular measures it will have to take to right the
corruption-ridden economy after years of mismanagement, urged parliament to
approve the measures outlined in the package.
"Ukraine
is on the edge of economic and financial bankruptcy," he said, warning
that the price Ukraine will pay for Russian gas supplies was expected to rise
by nearly 80 percent from April to $480 per 1,000 cubic meters. He said
inflation in 2014 would be between 12 and 14 percent and unless laws were
passed to support the austerity measures proposed by the IMF to stabilize the
economy, GDP could fall 10 percent during the year and Ukraine could default.
The
previous, ousted government said the country of 46 million needed around $35
billion over two years to stave off bankruptcy. It faces about $10 billion in
repayments on its foreign currency debt this year, excluding the several
billion dollars it will require for gas imports from Russia.
In
June, it will have to pay out on a $1 billion eurobond that matures. In a move
on Wednesday, seen as a gesture by Kiev to secure the IMF package, the
government said it had agreed to raise the price of gas to the domestic
consumer - a long-standing demand by the Fund - by more than 50 per cent from
May 1.
This
was an unpopular condition for IMF aid that Yanukovich had refused before he
was ousted last month. "Following the intense economic and political
turbulence of recent months, Ukraine has achieved some stability, but faces
difficult challenges," the IMF statement said.
Announcing
the agreement in the Ukrainian capital, Kiev, Gueorguiev declined to say how
big the initial tranche of aid would be. Kiev has said it desperately needs
cash to cover expenses and avert a possible debt default. The country's finance
minister has predicted the economy will contract 3 percent this year. The
bailout from the IMF will clear the way for several billion dollars in aid from
the United States, European Union, Japan and other nations.
Two points here. The first
is that the West will seemingly throw as much cash as necessary at Ukraine to
extend its influence and consolidate sociopolitical and economic gains. Second
is that "austerity" is going to be an ongoing factor.
Austerity in this case – as
elsewhere – is a way for the government itself to expand authority in a region
where government control is not strong. Greece is a prime example. Despite the
failures of austerity, the process itself legitimized the government's
strengthened role in Greek society.
Nuland's comments show how
intimately the West – the US, really – has been in forming the new
sociopolitical, economic and military nexus that will run the part of Ukraine
that Russia decides to leave alone.
The IMF's involvement in
Ukraine is simply one more event in a series of deliberate measures designed to
cement Ukraine's fate as a Western proxy on Russia's border.
The real significance of
Ukraine may turn out to be not the political reconfiguration so much as the
additional exposure of Western influence peddling and deliberate strategies of
manipulation. These have already been exposed in Northern Africa and the Middle
East, but the Ukraine saga continued the process and made it even more obvious.
The power elite depends on a willing suspension of
disbelief to promote facilities such as the UN, IMF, World Bank, etc. The more
these facilities are seen as compromised and manipulated, the more they lose
their luster – and certainly their credibility.
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