International lending institutions promise to Ukraine with her “junk” rating, strong financial support – for a total of $ 40 billion. In return, traditionally requires a deep reform of the economy, including the unpopular measures. “Times” asked the Russian and Ukrainian experts to comment on the recommendations of the Fund.
The two main creditor of Ukraine promised to approve the allocation of large-scale financial assistance. The World Bank is ready to allocate $ 2 billion in 2015. The International Monetary Fund approved a much larger amount – $ 17.5 billion. But as long as the pre-and four years.
The total amount of $ 40 billion, says in a statement head of the IMF, Christine Lagarde, on February 12.
The IMF program, she said, is aimed at financing the expansion of Ukraine, giving her more time and better credit conditions. “The IMF’s resources will be complemented by bilateral and multilateral loans – said Lagarde. – Total funding from these sources should be about $ 40 billion over the next four years ».
What will
«€ 1,8 billion from the EU, € 500 million from Germany, € 100 million from Poland, $ 300 million from the Government of Japan, about $ 2 billion from the World Bank and another $ 2 billion from the European Investment Bank and the EBRD – this is confirmed by the program, but the money will go only if Ukraine will be an agreement with the IMF. That is why the IMF says $ 40 billion, “- said” Gazeta.ru “the executive director of the International Fund blazer Oleg Ustenko.
When at a press conference , dedicated to the new program, Ms. Lagarde was asked to clarify whether or not to participate in this $ 40 billion in Russia, the head of the IMF went to answer, reiterating that it would be “a variety of bilateral and multilateral treaties».
Russia in late 2013 actually issued Ukraine a loan, buying two-year bonds for $ 3 billion. “Ukraine asked to consider a debt restructuring. I had talks with my counterpart Kiev “, – said Russian Finance Minister Anton Siluanov.
The new program will replace the already approved, said the IMF.
In April 2014, the IMF approved $ 17 billion and immediately sent $ 3.2 billion ($ 2 billion went to cover the budget deficit). Decisions on the remaining tranches of the IMF promised to be based on monitoring (every two months) economic condition to the satisfaction of the Fund. The result was still the second tranche of $ 1.39 billion in September, then transfer stopped, because the report on the economic situation was not ready.
The fact that Ukraine is urgently needed money, spoke at the end of 2014 – The IMF has estimated that the country does not soon enough $ 15 billion in spending. Borrow on the open market without prior agreement Ukraine difficult – credit rating is at SSS- (on a scale of international rating agency S & amp; P), which means high credit risks – “financial commitments can be made in the presence of a favorable business, financial and economic conditions ».
What wish
The World Bank does not hold requirements of the recipient country. WB President Jim Yong Kim explained that the money will be used to support the poor, as well as reform and the fight against corruption. “It’s vitally important that Ukraine started immediately carry out comprehensive reforms,” - he said.
«The World Bank has promised if, you probably will perform. With respect to the IMF, I would not be so sure, “- says a leading researcher at the Laboratory of financial and economic research RANHiGS Sergey Ulyukayev. IMF traditionally more demanding, however, it wishes decorated as a recommendation.
Foundation advises Ukraine to work on the budget deficit, move to a flexible exchange rate of hryvnia to increase domestic gas prices, reduce the growth social benefits and reform the administrative system.
So, is proposed to reduce the budget deficit from 4.6% of GDP to 3% of GDP in 2016. “There is nothing surprising in the fact that the IMF has said that we should try to reduce the deficit. Of course, it is painful, but no one has yet come up with anything else to stabilize the economic situation, “- said Ustenko.
The second major function of which is not also speak for the first time – an increase in domestic gas prices and a reduction in losses of “Naftogaz” and, accordingly, the need to subsidize the price difference from the budget. Align the prices offered by 2018, while the IMF points out that it is necessary to support the poorest consumers in the population. “All rates must be raised to the level at which to buy gas. And no need to subsidize “Naftogaz” and the population. For example, if 15-20% of household income is spent on paying utilities, “- said Ustenko.
« Naftogaz “opaque, corrupt, and therefore if support directly the population, save succeed in approximately half of all the money that now goes from the budget in the company ».
As for the hryvnia, the requirements of the IMF have already begun to run. National Bank of Ukraine moved to a floating exchange rate in September 2014, partly because he could no longer restrain the fall of the hryvnia. “The National Bank could sell $ 3 million per day, it is not enough and it did not help. It was and remains a requirement for exporters to sell 75% of foreign exchange earnings, but it does not work – just leave the currency abroad. With the current account deficit transition to a floating exchange rate is logical, “- says Ustenko.
During 2014 the hryvnia depreciated by 75% against the US dollar (long remained in the fall of leaders until it was overtaken by the Russian ruble). In February 2015, the National Bank lifted the remaining restrictions, the rate fell to 25 USD / $ 1. Ukrainian regulator, as well as the Bank of Russia in December, had to go to a sharp increase in the discount rate – from 14 to 19.5% per annum. “In fact, the National Bank restricts access to the interbank currency trading. It is clear that when he stopped doing it sharply increased volatility, and now they are looking for a new equilibrium rate “, – says Ustenko. He hopes that soon will lower the rate.
How it will end
«Now these money is needed, need any help from anyone else – says Sergey Ulyukayev. – Budget of Ukraine is bursting at the seams, foreign exchange reserves at the end, and in 2015 will have to pay on external liabilities ».
Foreign exchange reserves of Kiev does not exceed $ 8 billion. External debt at the end of 2014 reached $ 30 billion. Ukrainian Prime Minister Yatsenyuk reported that in 2015, Kiev must pay the debt by $ 11 billion.
«The short-term effect on the compliance with the requirements of the IMF, of course, will be negative – says Head of “International Economics” Economic Expert Group Ilya Prilepsky.
For example, an increase in domestic gas prices reduces the purchasing power of the population and the investment capacity of enterprises, which leads to contraction in domestic demand. “Freezing of social benefits has the same effect – reducing consumption.
But in the medium term recovery of state finances has a positive effect on economic growth,” – says Prilepsky.
In addition, experts say, in contrast to the 1990s and early 2000s, the IMF has become less rigid in their demands. “Still, he softened approach”, – said Prilepsky. “The IMF, for example, does not require an increase in domestic gas prices – confirms Ustenko. – Please, you can not improve, but we need to find another opportunity for budgetary maneuver ».
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