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Ukraine takes more loans and kills its economy

Author : Oleksiy Kushch

Source : 112 Ukraine

Our government is today the most ineffective owner, which squeezes honest domestic and foreign investors out of Ukrainian markets, continuing to build up corruption schemes and bring down national capital markets
16:00, 10 November 2021

Open source

Our government is today the most ineffective owner, which squeezes honest domestic and foreign investors out of Ukrainian markets, continuing to build up corruption schemes and bring down national capital markets.

The Ukrainian manufacturing economy was sacrificed. And you don't have to go far for examples, they are now on everyone's lips. Here are just a couple from this series for the current (2021) year:

Ukrainian largest machine-building holding "Plant Bilshovyk"in Kyiv, created back in 1882, was sold 3-4 times cheaper than its market value to a Cyprus offshore company without preserving production for construction (only the market value of this land is estimated at 120 million US dollars);

Put under the knife the "Black Sea Shipbuilding Plant" founded in 1895 in Mykolaiv, where in Soviet times they built from cruisers-helicopter carriers to heavy nuclear aircraft carriers, which are in no way inferior to their Western counterparts.

With the loss of such legendary enterprises, unique technologies, highly qualified specialists with hundreds of thousands of jobs, and, of course, huge revenues to the budget of Ukraine have become a thing of the past.

Related: Why Bilshovyk plant in Kyiv was sold three times cheaper than its real cost?

What is in return? Loans, loans from the placement of government bonds, and a strong growth of labor migration from Ukraine.

But this credit money no longer goes to the country's producing economy. More recently, head of National Bank Council, Bohdan Danylyshyn, was forced to admit: "The overwhelming part of the refinancing resource received (+ USD 2,4 billion from April 2020) was directed by banks to purchase government securities." That is, long-term refinancing loans for a period of up to 5 years, which the NBU provided from May 2020 to September 2021, did not help expand lending to the real sector of the economy and were directed by banks mainly to purchase government bonds.

What's next? Then there is a default since even now in the Ukrainian economy less added value is created than is needed to service the public debt. The turnover of money (M2 unit) also decreases and the body of credit, or debt, continues to grow.

Well, when the authorities and unprofitable state corporations began to brazenly get into this credit and borrowed money, we even reached the point beyond which Ukrainian private entrepreneurship and ordinary taxpayers can no longer service such a huge amount of debt alone.

Related: Bilshovyk plant: Investors to start working on concept of plant revitalization

This means that a debt crisis is coming. And worst of all, in this high increase in the all-Ukrainian debt, Shmygal's Cabinet of Ministers began to play the first violin. The more the Ukrainian government takes loans and borrowings, the greater the negative effect on our national economy.

In a word, the impression is that in blessed Ukraine there is some kind of invasion of "locusts", the flocks of which make their way, devouring all the greenery down to the last blade of grass on earth.

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Система Orphus

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