Ukraine’s Economy Choking Under Russian Pressure, But Western Help Is Scarce -- Washington Post
With its war-torn economy threatened by further Russian disruptions, Ukraine is in desperate need of a new international financial aid package, economists say, but none appears imminent.
The International Monetary Fund’s $17 billion package in May was not designed to compensate for the effects of months of fighting between Ukraine’s military and Russian-backed separatist forces. In addition to military costs, lost tax revenue and the dire need for infrastructure repair, Ukraine faces a crisis of confidence that is driving capital flight and a decline in its currency.
“I now fear systemic economic failure — unless there is a positive confidence shock,” said Timothy Ash, London-based head of emerging markets research at Standard Bank. He said Ukraine’s banks are fragile, the budget deficit is more than 10 percent of gross domestic product, and the economy could shrink by as much as 10 percent, greater than the current IMF estimates.
Read more ....
My Comment: It is true that the Ukraine economy has been seriously hurt by the sudden withdrawal of Russian economic aid/cheap credit/subsidized gas/preferred trade status/etc. .... but what has really hurt the economy is the country's systemic corruption coupled with bureaucratized business environment that has made it almost impossible to start and grow a business in Ukraine. It is one of the reasons why I have refused to move back to Ukraine .... the business environment is horrible ... and that is not the fault of the Russian government.
On a side note .... I predicted a few months ago that when the aid program that has been promised by the West is finally implemented .... it would be a paltry amount when compared to what Russian has given over the years .... and even then some of this aid will not be delivered. Not surprisingly .... this Washington Post article is now stating the same thing.
No comments:
Post a Comment