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Ukraine has drawn less than $8 billion of the current $17.5 billion IMF aid package due to refusal to enact reforms required by the international body, and refusal to fully crack down on corruption.
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Time is running out for Kiev to secure more aid from the International Monetary Fund before the current $17.5 billion (£13.4 billion) programme expires in March, ringing alarm bells about Ukraine’s ability to service its growing debt. No money has been received from the Fund since April 2017 and the pace of reforms has slowed in the past year, writes Reuters.
“Ukraine has repeatedly started an IMF programme,” Oleksandr Danylyuk, former finance minister, warned last September. “Each time a few tranches were received at the beginning, and this all ended, because the authorities did not want or were not able to fulfil their obligations.”
Yuriy Yekhanurov, prime minister in 2005-2006, said Ukraine’s leaders, many of whom are also businessmen, treat IMF negotiations like a business deal.
“They need to survive now. They are not interested in what will happen tomorrow, in two years, so they take obligations that are almost impossible to fulfil,” he told Reuters. “This is because business people are used to negotiating and they think that they will negotiate all the time: ‘here, we have not done everything, you cannot give us 2 billion, but maybe you can give us 1 billion?'”
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A perfect example of recent corrupt practices was the passage of a watered-down measure to establish an ‘anti-corruption court’. The IMF refused to acknowledge the move demanding amendments be passed to restore teeth to the legislation.
Pervasive corruption in the former republic of the USSR, inherited from Soviet times, has proved to be almost impossible to crush, leaving the Ukrainian people stuck with a future of hardship and reduced economic growth.