- uploaded: Sep 5, 2013
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Economy of European Titans and developing countries has begun to fluctuate feverishly?! May be the reason is imbalance of payments? Or, maybe, the rate of national currency has risen? No problems! Kind healers from the IMF will give you a full spectrum of resuscitation procedures, will put a compress?
It is commonly known that the IMF M.D. not only will set you on your legs even in fatal case, but also will write out the excellent recipe with the further recommendations failure of which threatens the patient with new flash of illness. However, their performance threatens with the same if is not worse. In such a way it’s possible to describe activity of the IMF and conditions of its cooperation with “sufferers”.
Today clients of the IMF in the post-Soviet area receive temporary relief in the form of milliard credits, but at the same time, doom own population to “a tightening of belts” in the future. Reduction of social payments, increase in taxes, pension age increase, and price rise of municipal tariffs represent only a small list of problems faced by people. Meanwhile the IMF actively works over new “recommendations”.
For Ukraine, for example, one of the basic conditions to receive the financial assistance from the IMF, in the form of a new program of cooperation stand-by (for the sum of $15 billion), is an increase in tariffs for gas for the population by 40 %.
Also it’s necessary to note that so-called “the gas issues” has become key one in negotiations between Ukraine and the IMF. The Fund demands to establish market prices for population, but Kyiv doesn’t hurry up to implement so unpopular measures. The government understands the IMF position in this question, and agrees with necessity gradually to unfreeze prices, but after all topical problems aren’t limited to questions of settlement of economic imbalances.
A promising Ukrainian politician Sergey Arbuzov being currently the first vice-premier in the government of Ukraine considers that even insignificant raising of tariffs will affect socially exposed segments of the people. Despite the current contradictions, Kyiv isn’t intended to terminate its search of options to settle disagreements with the IMF.
To the contrary, implementation of the IMF instructions has caused a full economic collapse in Greece. Moreover the IMF doctors have almost “treated to death” economy of Italy, Spain and Portugal. They should reduce their social expenses to cooperate with the Fund, and as a result they faced mass demonstrations and trust decrease to the power.
The head of external relations department of the IMF Gerry Rice at the international briefing in Washington declared that the IMF was opened for cooperation. “We’ll continue discussions to achieve a concrete result, measures and steps which shall be accepted”, – the head of department of the IMF stated.
As far as Ukraine concerned, it’s necessary to note, that it has already paid the basic part of credits due to the IMF, but in 2013 the rest of external obligations made 9 billion dollars. Experts are certain that without new external loans Kyiv won’t be able to pay off in full debts of the previous governments as the essential part of gold & forex reserve was used for their repayment.
Mr. Arbuzov, in the past – the main banker of the country, considers that today Ukraine had to sacrifice a partial loss of gold & forex reserves to maintain national economy, to increase internal consumption and to support import. In this case, Ukraine had to sacrifice its gold & forex reserves to preserve corresponding business reputation by demonstrating readiness to meet debt obligations. It was important to preserve reputation of the country and to show Ukrainian readiness to meet its obligation as arrangements with the IMF under the program stand-by are extremely significant for it.
For the time being it’s difficult to predict development of relations between the IMF and developing countries, considering the IMF position as to the implementation of global austerity measures.