Default is inevitable: No need to kneel down before IMF - it won't help

Author : Oleksiy Kushch

Source : 112 Ukraine

PM Shmyhal and Finance minister Marchenko should not kneel before the IMF, it is necessary to curb the domestic market for joint investment and pour more than 40 billion USD into the real sector of the Ukrainian economy
21:01, 19 October 2021

Today there is cash currency in circulation in Ukraine many times more than the gold and foreign exchange reserve. Therefore, the Cabinet should not take more expensive foreign currency loans with such high risks and idle industry. On the other hand, domestic and foreign investments will be able to save the country's economy, and given that default is inevitable, it is necessary to stimulate the national investment business, which would acquire the corporate rights of still operating competitive enterprises for hryvnia.

The target audience of such investment projects is, first of all, top economic officials, the fortunes of some of them are already approaching the finances of oligarchs, and also 9.1% of citizens receiving salaries over 1,000 USD. And not those ordinary Ukrainians who live from paycheck to paycheck (according to the State Statistics Service, 33.4% of full-time employees receive a salary of only up to 250 USD). By the way, the total number of full-time employees at the end of June of 2021, who were paid 50% or more of the working hours set for a month, was 6.924 million people.

Related: Argentina reaches technical default on payment of external bonds for nonth time

I think, friends, it will not be uninteresting for you to learn that for all the years of independence we have received loans from the IMF up to $ 40 billion! And what is the result? The economy is virtually destroyed, and the overwhelming number of Ukrainians turned out to be the poorest population in Europe. And Shmygal again, like manna from heaven, is waiting for another IMF loan in the amount of USD 750 million by the end of this year 2021.

But still, what ways do we need to get out of this systemic economic crisis, where politicians have driven us. After all, as in previous governments, and now we are watching the same crazy project "To live on loan, to live beyond our means." Although, by and large, it is clear that there is enough private capital in Ukraine to develop the real sector of the economy and build a new architecture of the financial market, since financially wealthy citizens have up to 90 billion in foreign currency.

How can this money be spent on direct investments? Believe me, business will do all this at its own expense, financial support from the state budget is not needed. What are the specific steps? First of all, it is necessary to create and develop the activities of corporate and mutual investment funds in the Ukrainian joint investment market. In addition, assets today have fallen so much in price. And there is no need to take loans from the IMF under "draconian" obligations and, of course, not to print new issues of money, accelerating inflation.

Related: Cabinet assures there will be no default in Ukraine

Now the real sector of the Ukrainian economy, like air, needs direct investment, or, more simply, long-term money. And these are not only special institutions, but also a special technology in the joint investment market. Especially in the current crisis conditions, solving long-term money problems requires an integrated approach. This is not a single issue or the will of individual politicians and entrepreneurs. This should be a holistic economic policy of the state aimed at creating not just long-term money, but national long-term money.

It is at such moments that it is very important to really carry out organizational work to consolidate all constructive initiatives of the expert and business communities, as well as the legislative and executive authorities.

Related: Biden approves bill aimed at preventing US economy from defaulting

In conclusion, I would like to note that economic life teaches us demonstratively: obstacles are inside the country, not outside. It's time, finally, to stop this crazy project "to live only on borrowed money, to live beyond our means."

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