Wednesday, August 6, 2014

The Ukrainian economy in Putin's calculus

The upcoming “social autumn” is expected to be harder than ever. The Ukrainian economy, which has been crippled by the oligarchs, the permanent stagnation and the enforced external financial dependence, will probably face one of the most difficult periods. The new authority has already prepared the answers on all the difficult socio-political questions, that will be probably asked by the Ukrainian society. The recipe is painfully ordinary: “Just add Putin!”.

The Secretary of the National Security and Defense Andrey Parubay the day before his retirement declared that in September-October a new wave of destabilization attempts from the side of Russia is expected to hit eight regions of Ukraine. He is sure “They (RF representatives ) think that the unpopular reforms, which the government will be forced to apply, will lead to social tension and increase of dissent. Also they believe that after this increase, the new ground for destabilization will be set.

Encouraging enough for the Ukrainian leadership, which doesn't have to worry too much about finding an external “enemy”. No wonder why Parubay spoke now about the situation in autumn , as the preconditions for a social explosion (not only in the eight regions mentioned) are more than needed. There are two main factors that will play the key role in the complication of the situation: the disfunction of the national economy and the increase of the social burden on population.

The economical disfunction is explained by the precipitant paralysis of the industrial production, which took place with the dynamic reduction of trade turnover between Ukraine and Russia and the military actions in Donbass. It's worth saying that the eastern conflict itself (either with it's completion or even more with it's continuation), is actually a separate factor of the aggravation in the economical expression, of which the full scale is too soon to speak. With the reduction of the production dynamics , Ukrainian budget is left without serious funds. Only in the period from January to May, the budget got 12,2 billion UAH less. It was possible to avoid the social collapse “right now” through the transfer in the treasury of 22 billion UAH from the funds of the National Bank, which t balance, as we know, was successfully supplemented by an IMF credit.

Complete story at - The Ukrainian economy in Putin's calculus

CC Photo by Flickr User teacherdudebbq2 Subject is IMF Chaos & Poverty

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