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Wednesday, 23 August 13:23 (GMT -05:00)



Business And Politics News

Sixteen Structural Reforms Is the Cost of the Next IMF Tranche to Ukraine


Anders Aslund, a Swedish economist and a Senior Fellow at the Atlantic Council, commented on the current and future cooperation between the IMF and Ukraine. He claims that Kiev will have to implement at least 16 structural reforms in order to get another tranche from the International Monetary Fund. He also explained why the IMF is still cooperating with Ukraine.
 

 

 

 

 

The expert reminds us that on April 3, the IMF analyzed the progress made by the Ukrainian government in terms of implementing the promised reforms. As a result, the IMF found out that only 54 out of the promised 14 structural reforms where implemented. By the way, those reforms are a part of the cooperation program.
 

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Nevertheless, Ukraine still got another tranche from the IMF, around 1 billion dollars in total. Given the fact that Ukraine failed to stick to the agreement in terms of implementing the reforms by still got the money, some experts started questioning the transparency of the deal between Ukraine and the IMF.
 
There is another curious thing. Instead of focusing on macroeconomic stats, the IMF put forward a range of less significant conditions for letting Ukraine get another tranche. That’s why the expert calls for investigating into what the IMF is actually doing. First of all, no international organization can compare with the IMF in terms of efficiency and responsiveness. The IMF has a lot more money than other financial peers. The local personnel are more skilled and ready for increasing challenges, even though they are paid more handsomely.
 
Moreover, the fund is well-run and has a clear mission. They are quick to react. After the Managing Director makes a decision, a team of experts goes to the country in question in a matter of days. The agreement is usually signed in a matter of 2 weeks at most. The IMF’s Executive Council also needs a couple of weeks to make the final decision, which means that the entire procedure doesn’t require a lot of time and the money is transferred the next day without having to follow some complicated schemes involving local governments, even if this is billions of dollars.
 
All in all, the IMF is designed to support economic stability in order to help various countries around the globe avoid a default and curb inflation. Still, often times, the IMF requires those countries to practice austerity with budget spending cuts and tough monetary policies for local central banks.
 
The IMF started helping Ukraine in March 2015. Back then, the fund planned to sponsor Ukraine with 17,5 billion dollars in total. The first tranche was equal to 5 billion dollars. This nearly doubled Ukraine’s currency reserves at that time. Hardly could any other financial institution have helped Ukraine that fast.
 

 

So, why did the IMF give Ukraine another tranche? The thing is, despite implementing all of the promised reforms, Ukraine did manage to implement the key macroeconomic reforms. To be more specific, the Ukrainian government did manage to balance the budget. At first, they used to expect a deficit equal to 3,7% of the GDP. However, the deficit was reduced all the way down to 2,3%, which is a considerable and even impressive achievement for Ukraine. Inflation also turned out to be slightly less than expected, which is another achievement, though less significant. At the same time, under tough economic and financial conditions, the local government also managed to stop the national currency from devaluing fast. Given this achievements, the IMF seems to have been impressed and that’s why they decided to give more money to help the Ukrainian economy recover.

 

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U.S. Energy Revolution Announced by Trump Threatens Russia

Donald Trump’s speech about starting a new energy revolution together is now discussed by the international community. It seems that the USA is going to start a new policy regarding commodities. The changes are expected to take place within the next 10 years.
 

 

Apparently, America’s new energy policy is aimed at dominating the global markets over time. That’s why Trump and his administration are now betting big on the local oil and gas production. The thing is, the sources of the so-called green energy are not capable of replacing hydrocarbons for now, which is why they still have to rely mostly on conventional energy carriers, especially as shale oil and gas production has been booming over the last few years.
Publication date: 18 August 06:50 AM

Trump’s Policies Make USA Lose Their Leading Position in the West

More and more international experts are concerned about Donald Trump’s policies. Some of them are concerned that because of him and his actions, the USA may lose their leading role in the Western world.  

 

 

According to Fareed Zakaria, political expert, CNN host and columnist for The Washington Post, Trump’s recent political decisions have made the European Union so united that Putin could never have dreamed of. Even though he is not going to make the Western world collapse, the USA may still lose the number-one status in the Western world.

Publication date: 31 July 12:09 PM

Does China Oust Russia From Central Asia?

As the situation in Afghanistan is getting worse, this is raising a lot of concerns in the international expert community. The Islamic terrorist threat may spread from there to Russian and China, they say.

 

 
According to a Norwegian observer for Dagbladet, there exist 5 countries in Central Asia that can be seen as potential threats to Russia and China. The thing is, the Islamic terrorism may well spread from those countries to their neighbors. They say that Afghanistan is now the biggest potential threat since the amount of armed conflicts in the country are getting more and more frequent and tough. As Taliban (the local terrorist organization) is said to be sponsored and suppled with arm and ammo, the USA seems to be putting the blame for this on Russia.
Publication date: 29 July 11:53 AM

China Invests Heavily In Africa

You probably know that has been investing in a number of countries of strategical importance. There is a lot of African countries on the list. According to several observers, Chinese banks have given such countries over 77 billion euros since 2000.

 

 
Not so long ago, there was a documentary broadcast on the national TV. The documentary is about a railway line in Kenya built by China Road and Bridge Corporation. It praises Chinese engineers and tells the viewer that the Chinese government is ready to support African countries on their way to economic growth.
Publication date: 24 July 11:46 PM

Chinese Economy Is Way Stronger Than Trump Thinks

The Chinese economy has got much stronger. It can now even be compared to the American one, which is viewed to be the world’s strongest economy. Washington clearly underestimates Beijing when saying that the China has been flourishing in the international markets exclusively at the expense of unfair trade.

 

 
Publication date: 23 July 10:48 AM

British Start Getting Disappointed with Brexit, Soros Says

Last year’s Brexit referendum has become a major challenge for the British government, George Soros says. He says that more and more British citizens start getting disappointed with the Brexit.

 

 
The world-famous financier and CEO of Soros Fund Management assumes that now the economic reality starts revealing the real state of affairs and debunk their delusions related to the happy living outside of the European Union. More than 12 months ago, the advocates of the Brexit scenario were trying to persuade people that this choice won’t affect people’s standards of living. Well, since then, the government has been trying to implement this promise at the expense of increasing the internal debt.
Publication date: 14 July 02:40 AM

Two Reasons Why Russia Keeps Losing Influence Over Post-Soviet States

After the USSR ceased to exist, the Kremlin was counting on retaining their influence in the region. However, the truth is that Russia as the major successor to the USSR has been losing its influence over the remaining post-soviet states. There are 2 reasons for that.

 

 
According to the related report recently published by private American analytic company Stratfor, there is a range of new tendencies making it difficult for Russia to stay influential in the post-soviet region, especially when it comes to Ukraine. The two major reasons for that are believed to be the declining role of the Russian language in the region as well as the existing threats of mass protest inside Russia itself.
Publication date: 06 July 01:42 PM

Business with China: New Reality after Blocking Yandex and VK in Ukraine

Ukrainian President Petr Poroshenko has expanded the list of sanctions against individuals and legal entities from Russia. To be more specific, Ukraine imposed sanctions on several Russian online companies, including Yandex, which is Russia’s biggest IT company, as well as some other popular web services like VK, Odnoklassniki, and Mail.ru Group. According to the presidential decree, Ukrainian Internet providers are forbidden to grant access to those blacklisted websites.

Publication date: 06 July 01:13 AM

China Doesn’t Need Russian Gas and Pipelines

Don’t you remember how a couple of years ago Gazprom cut natural gas supplies to Ukraine a number of times. By the way, Ukraine alone used to buy 55 billion cubic meters of natural gas back then. Now Ukraine buys no natural gas form Russia at all. Apparently, Moscow keeps on looking for other outlets. There has been a lot of buzz about China as a new big outlet for Russian natural gas and crude oil. It turns out that two new pipelines should have transferred to China some 38 billion cubic meters of natural gas every year. Yet, this was the maximum amount, and it couldn’t clearly make up for the export of natural gas to Ukraine.

Publication date: 05 July 11:15 AM

Mass Media on Forthcoming Trump-Putin Meeting

For those of you who don’t know, the first official meeting between Donald trump and Vladimir Putin has been confirmed. It’s planned for July 7, during the G20 summit in Hamburg, Germany.

 

 
Some observers say that the White House did the Kremlin a favor by being the first one confirming the official meeting during the G20 summit. This announcement helped the sided to get of the rumors around the situation and helped Moscow to save face in the Russian media space.
Publication date: 05 July 06:24 AM