IMF announces Ukraine rescue visit

December 07, 2014

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KIEV: The International Monetary Fund (IMF) said on Saturday it would dispatch a team to Ukraine to determine how much extra aid the war-wrecked and energy-starved nation will need to make it through winter.

The nine-day visit due to start on Tuesday comes as Ukraine suffers rolling blackouts and resentment grows over severe IMF-prescribed austerity measures.

The Fund has helped piece together a $27-billion (22-billion-euro) global rescue package — promising to contribute $17bn of that sum over two years — in the weeks that followed the February ouster in Kiev of a Russian-backed president.

But it has since said the new pro-Western government may need at least $19bn in additional assistance should its war against pro-Russian insurgents in the eastern industrial heartland drag on through the end of 2015.

The IMF’s Kiev representative Jerome Vacher said only that “the mission will begin policy discussions with the Ukrainian authorities in the context of the Fund-supported economic reform programme.”

RUSSIAN GAS PAYMENT: The Fu­nd is next due to mete out a $2.7-billion payment that comes on top of $4.6bn delivered by early September.

The money has been essential for Kiev — its foreign currency and gold reserves last month dropped to less than $10bn for the first time in nearly a decade because of the draining toll of the war.

The fighting has shuttered the east’s factories and left the rest of Ukraine desperately short of the coal needed to generate electricity used by industries and households.

A deal for Kiev to make up for the shortfall by buying 100 million tonnes of coal from South Africa fell apart this week due to graft charges that led to the arrest of the head of Ukraine’s main state energy firm.

But the Fund’s money has helped Ukraine pay back debts to Russia that should see natural gas flows — halted by Moscow in June because of a price spat — resume within a matter of days.

Russia’s state-run gas firm Gazprom said it had just received $378m from Kiev that should cover the delivery of one of the four billion cubic metres that Ukraine plans to purchase in the coming months.

“We will provide the volumes Ukraine needs for its domestic consumption,” Russia’s RIA Novosti news agency quoted Gazprom boss Alexei Miller as saying. But Russia’s “deliveries to Europe will be made using an alternative route,” he added.

Published in Dawn December 7th , 2014