In 2017, Ukraine needs from five to ten billion dollars, but there is nowhere to get it
If the IMF curtails its already sluggish cooperation with Ukraine, then no one will give it any more money, given the state of the economy and the ratio of external debt to GDP.
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This opinion was expressed at a press conference in Kyiv by Oleg Ustenko, executive director of the Blazer International Foundation, who noted that in 2017 Ukraine needs from 5 to 10 billion dollars in external borrowing.
“Ukraine must clearly understand that if there is no cooperation program with the IMF, then there are no other lending programs for the country of Ukraine. They simply won't exist. All international programs are linked to whether there is a cooperation program with the IMF or not. There will be no money from the World Bank, from European structures, if there is no cooperation program with the IMF,” the expert emphasized.
“The question arises: where will Ukraine get this money from then? Don’t be fooled by last year’s statistics that we received $3,4 billion in foreign direct investment. 70% of this money went to the banking sector, which was more reminiscent of forced love than a real vote of investors for the Ukrainian economy. 1 billion went into the real economy, 2,4 into the banking sector. It was forced love, the foreigner was faced with a choice: either support his daughter in Ukraine and not let her drown, or let her drown and record losses.
Therefore, this year, out of these 5 billion dollars of the minimum requirement, Ukraine may receive 1, maximum, 2 billion dollars in terms of foreign direct investment. Where can we get another 3 billion?” Ustenko asks.
He also said that he was frightened by the Ministry of Finance’s statements about an attempt to test external capital borrowing markets this year.
“Gentlemen, the ratio of Ukrainian debt to Ukrainian GDP is 81%. We pay more than 5% of GDP to service our debts. That is, 5% of what you earn in 2017 will go to servicing existing debts. Ukraine receives from the IMF at 3% per annum; for borrowing on the international market, Ukraine should be ready to pay from 9% per annum. This is three times more expensive than what we get from the IMF,” says the executive director of the Blazer International Fund.
In 2017, Ukraine needs between five and ten billion dollars, but has nowhere to get it.