Ukraine – IMF Hypocrisy

July 31, the IMF gave Ukraine more money, the ante coming in at $6.68 billion so far.  In a statement justifying the money based on criteria of achievement, the IMF claimed:

“The Ukrainian economy remains fragile, but encouraging signs are emerging. In recent months, the exchange rate has stabilized, domestic-currency retail deposits have been increasing, and the pace of economic decline is moderating. Continued prudent policies and further reforms should allow the economy to turn the corner and growth to resume in the period ahead.”

Really?  Few sources would agree. In fact, the IMF was required to downgrade it’s forecast considerably from 5.5% to -9% with 46% inflation. In essence the IMF simply turned a blind eye and pretended that shoving money into the economy was ‘working’. Still Ukraine has said it will default on its coupon payment of $500million, $200m of which is supposed to be footed by PrivatBank.  Why?

What happened to the $6.68 billion? Do they have to make an accounting of these funds?  What is it used for?

Tangled Web:

There have been some drubbings that Ihor Kolomoyskyi, a majority owner of Ukraine’s PrivatBank has been the recipient of IMF deposits that have possibly been misappropriated, a legal term for – disappeared.

He also is apparently the central owner of Burisma Holdings, the company awarded to Hunter Biden and Devon Archer (Kerry’s son-in-law) with another notable Director, the former president of Poland. Of the IMF funds deposited in the bank, roughly $1.8billion has been lost in the translation…

But the IMF, the US, don’t seem to mind despite the information coming to light in September 2014 when Kolomoyskyi was governor of Dnipropetrovsk where the suspicious activity initiated. He was later forced to resign, but the investigation by Interfax Ukraine did not proceed until recently when the news media began to take note.

Four days after the IMF agreed to the additional $1.7 billion relief to Ukraine, it released a statement that Ukraine’s bailout faces “significant uncertainty”. In other words, all the money given – may be lost. Still, in another article, economists claim that the economy has stopped contracting, it’s exchange rate has stabilized and domestic deposits have increased.  Statements are polar opposite, conflicting and evasive!   And no one raises an eyebrow.

In fact, the economy is far worse than predicted, inflation is out of control, protests continue, bombing continues, human rights violations continue, and of course, corruption is rampant. So let’s all agree to give them – more money…

While the IMF wanted 40% of it’s face value debt wiped away, just four of it’s creditors agreed to 20% which amounts to less than $2 billion. And at that, they were less than happy to concede. Who are the creditors? Franklin Templeton is the largest bond holder at $4 billion, BTG Pactual of Brazil, TCW Investment Management Company, and T. Rowe Price hold about $5billion. Blackrock and others are not so forthright in coming forward for negotiations or transparency. Russia has refused to negotiate and owns $3 billion. The total debt is estimated to be $129 billion.

So basically, the IMF agreed to give Ukraine $1.7 billion additional aid which will in essence be paid by Franklin Templeton, T Rowe Price, TCW Investment, and BTG Pactual.

Again -where does the money go? What does it pay for?

Keiv submitted its 2016 budget proposal at roughly $25 billion with apparently, little to no detail. When asked for detail, the Finance Minister said that information wasn’t available. What?? According to it’s 2015 budget, it runs a 10.5% deficit. In addition, while budgeting for military spending increased 100%, spending was cut for education and science. Does not sound prosperity driven to me…

In 2015, Ukraine saw exports virtually collapse, levels have been reduced to those reflected in 2010. Doesn’t speak of a recovery to me.  Over the past year it’s gold reserves are roughly half at 23 tonnes (1 tonne = about 35,274 ounces at $1128 each = gold reserves of $915,148,656). But even that number is filled with mixed media hype and hypocrisy. It was reported in 2014 that the US took control of 40 tonnes of Ukraine’s reserves, which would have accounted for ALL the gold. So, whether the 23 tonne figure is accurate is up for debate.

Bottom line, there is currently no accounting for where Ukraine spends it’s IMF money, no accounting for their gold, and no accounting for their central bank deposits. There is no accounting for exactly who holds their debt and how much. And Ukrainian ministers continue to ‘decline to talk’ or answer any questions in this shadow of transparency.

Gee, this is much better than it was before…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s