Wednesday, March 26, 2014
My good friends, the people of Ukraine have already begun the dance with the devil (the most deadly vampire in the global financial sector: the International Monetary Fund). Most African countries have been engaged in that dance all these years with devastating consequences.
The new leaders of Ukraine will soon gain their composure as reality dawns. They will be jostled enough into realizing that they have entered into a "marriage of inconvenience" with the West whose consequences won’t be palatable.
All too soon, the West has opened the floodgates for their most-trusted vampire (the International Monetary Fund) to do their hatchet job for them. And the IMF’s notorious austerity measures bite deep. For Ukraine, the biting will begin being done all too soon.
The headline says it all: "Ukraine agrees to 50% gas price hike amid IMF talks".
And the news report itself doesn't leave me in any doubt that Ukraine's dance with the vampire will bring about more trouble for the country and its people---the disillusionment of reality and the disappointment of the realization that they have jumped from the frying pan into a consuming fire.
Here is why:
• Ukraine's interim government says it will raise gas prices for domestic consumers by 50% in an effort to secure an International Monetary Fund (IMF) aid package. An official at Ukraine's Naftogaz state energy company said the price rise would take effect on 1 May, and further rises would be scheduled until 2018.
• Ukrainians are accustomed to buying gas at heavily subsidised rates. But the IMF has made subsidy reform a condition of its deal.
• Yury Kolbushkin, budget and planning director at Naftogaz, told reporters that gas prices for district heating companies would also rise by 40% from 1 July.
• IMF negotiators are still in Kiev to negotiate a package of measures worth billions of dollars to help Ukraine's interim government plug its budget deficit and meet foreign loan repayments.
• The IMF is also asking Ukraine to crack down on corruption and end central bank support for the Ukrainian currency.
• In the US, arguments in Congress over reforms to the IMF have held up plans to offer Ukraine $1bn in loan guarantees.
• The EU says its financial support, potentially worth 1.6bn euros (£1.3bn) is contingent on the IMF deal being agreed.
Suddenly, Ukraine has been lured into the trap. The IMF's conditionalities are designed to strangulate weak economies; and what is being imposed on Ukraine will do that job.
As the harsh reality dawns, the citizens will react vigorously to rock the ship of state, especially as the austerity measures further worsen conditions.
One fact stands out: that the West will rush to support a country on the basis of "democracy" just to gain political leverage; but when it comes to propping up that country economically, subterfuge takes over and the country is lured into the mouth of the vampire IMF to be "consumed".
I wonder why the US and the EU allies would so readily support Ukraine's fight for territorial integrity but not grant it the financial support that it direly needs. Why leave Ukraine at the mercy of the consuming vampire (the IMF)?
Welcome to the world of reality, Ukraine; and brace up for more!!
I shall return…
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