Ukraine is Broke; What’s Next?

  • The funds that are provided for the West to continue the democratic processes are misappropriated by the Ukrainian elite.
  • Ukraine is going to default on its financial obligations.
  • Next year, Ukraine will have a large deficit.

Ukraine’s former First Deputy Minister of Economy, Pavlo Kuhta, made a statement on his Facebook page pertaining to the Ukrainian economic crisis. According to him, the Ukrainian budget is in a code red scenario. This is the worst economic performance Ukraine has ever seen.

Volodymyr Zelensky (born 25 January 1978) is a Ukrainian actor, screenwriter, comedian, director and politician serving as the 6th President of Ukraine, inaugurated 20 May 2019.

It should be noted that under former US President Barack Obama, Ukraine received a large amount of funding. The current US President, Donald Trump, stopped funding Ukraine.

Ukraine can’t perform. The funds that are provided for the West to continue the democratic processes are misappropriated by the Ukrainian elite. Unfortunately, Ukraine can’t be as good as Poland.

Furthermore, Ukraine is going to default on its financial obligations. At present, the Ukraine Treasury shows obligations to be  close to 10 billion hryvnias ($353 million). Out of this quantum 3 billion hryvnias ($106 million) for the protected expenses.

Moreover, posts started to appear from the Ukrainian government employees claiming that since the beginning of this month, Ukraine’s treasury has been working in the card filing mode.  Allegedly, the employees are ordered to reduce receipts until nightfall, form a pool of expenses that will be financed in the morning, and postpone everything else.

It is plausible that after the Facebook posts, the office of the Ukrainian President Volodymyr Zelensky will issue a damage control statement. The statement will, of course, blame the Coronavirus pandemic for the economic crisis.

Nevertheless, even though the Coronavirus pandemic did contribute to the economic downturn around the globe, Ukraine’s issues are far more dire and corruption is one of the main factors.

The International Monetary Fund (IMF), also known as the Fund, is an international organization headquartered in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on World Bank for its resources.

Ukraine has given every Ukrainian national affected by the closures due to the COVID-19 pandemic 5,000 hryvnas to over 4 million people per month. Currently, Ukraine simply ran out of the funds. Therefore, Ukraine would have work out a deal with the International Monetary Fund.

President Zelensky and Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), have been in discussions of their obligations under the stand by agenda. Ukraine is on the brink of a full constitutional crisis.

Next year, Ukraine will have a large deficit. Ukraine needs to restore anti-corruption legislation. There needs to be a non-confidence vote pertaining to Volodimyr Zelensky. The National Anti-Corruption Bureau of Ukraine (NABU) has to be given more power in order to have a massive sweep of all the Ukrainian corrupt government bureaucrats.

To note, NABU has investigatory powers, but it does not have the power to indict. The agency should have the ability to indict. This will speed up the process and allow more efficiency.

Ukraine is one of the most corrupt nations from the former Soviet Bloc. There is a lot of work ahead for Ukraine to reach an acceptable level of transparency and accountability. Otherwise, it will end up being a lost cause within 10 years, and even the attractiveness of Ukraine bordering Russia as a buffer zone won’t be enough.

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Christina Kitova

I spent most of my professional life in finance, insurance risk management litigation.

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