The debt for help?

Author : Yulia Samayeva

18:30, 17 August 2016

The debt for help?

Author : Yulia Samayeva

Ukrainian government says about tireless search for external funding, donor fundraising, improving the regulatory environment and business climate for investment flows into the country.

18:30, 17 August 2016

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However, these statements are rarely confirmed with the results, so the last IMF tranche Ukraine received a year ago, other investors, based on the position of the fund, also took a pause. Nobody wants to give money to Ukraine, especially as the impact of the use of these funds is extremely low. The amount of the investment portfolio of the World Bank, for example, is 2.6 billion USD, and the amount of unused funds today - 2.2 billion. And this extraordinary inefficiency makes our donors think about the advisability of further cooperation with the ineffective borrower.

When the conflict in the East began, Ukraine was on the brink of social disaster - thousands of families have left their homes in search of a peaceful life and their data remained in regional databases - available, unattainable and unnecessary. The lack of national information systems and actually became the reason of many problems of eastern Ukrainians. Both the relocation of these people and their access to social benefits could be organized in a few days, if the system was working. And this could be done  without a lot of departmental orders and instructions, crowds of disgruntled dispossessed people,  shameful verification, complex control mechanisms, superfluous deputy prime minister and entire ministry.

International organizations that wanted to help victims of Ukrainian conflict, just could not believe that in our country there is no unified database. Bangladesh and Afghanistan have such database, and European and civilized Ukraine – hasn’t. Although two credits for its creation have been exploited. This is just one of a mass of examples of how power in the center and locally cannot implement projects even with money, clearly set tasks and technical assistance of international experts.

Amount of IMF’s third credit tranche for Ukraine will be defined based on schedule of future transfers: IMF

Credit appetite of Ukrainian authorities significantly exceeds its executive capacity. "The inability of Ukraine to use the given money is a global problem of its major creditors, not just the World Bank. At donor meetings, we see that these same problems have the European Bank for Reconstruction and Development and the European Investment Bank and KfW, - explains Senior portfolio manager of the World Bank (WB) in Ukraine Klavdiya Maksymenko.

In addition, according to experts, there are differences in the rules of international organizations and Ukrainian legislation, and despite the supremacy of international treaties in Ukraine they rarely prevail over national law. Absurd, but in each case the international lenders should prove this obvious thing, wasting both time and effort. And we are talking about investments - funds provided to country budget on very favorable terms.

In its best times Ukraine used 30-40% of its entire investment portfolio per year. Now - less than 10%. And this at a time when the state investment needs increased because of military conflict and economic crisis. Because the value of this benefit is not only in cheap loans, but in the initiatives Ukraine needs -  projects that enhance quality of life, but, unfortunately, do not belong to the real priorities of the Ukrainian authorities. If they will not be realized within international programs, they likely will not be realized at all. International partners unanimously repeat that the main problem is not even the corruption but the overregulation of law, surplus of rules, procedures and instructions. And this is during the time of rampant deregulation, which is a priority for any new government.

Related: IMF may cut credit tranche for Ukraine by almost a half: Source

Related: Ukraine to receive $1 billion credit tranche from USA

Related: Japan opened $269 million line of credit to support Ukraine

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