Observers, watching the situation in the country's financial
market could not avoid noticing the tension, which reigns in the upper
echelons of the state and which domestic entrepreneurs literally inhale
from the air. This is understandable, for the concentration of Ukrainian
economic policy falls precisely on the days of the IMF mission in Kyiv.
And when problems arise in the negotiations, they immediately influence
the business atmosphere in the country.
The most favorable result (for the authorities) of the mission's work
in Kyiv would be if already on January 26 its Ukrainian head Muhammed Shadman-Valavi
announced that he will recommend to the Board of Directors to grant a loan
to Ukraine. In this case there would be no need in cardinal changes of
the year's scenario, written into the budget, in the election headquarters
of certain candidates for President, and in NBU accounts. However, according
to unofficial information, the present IMF mission may refuse to pass a
final verdict. The history of two months ago will then be repeated: neither
war nor peace.
Meanwhile they say in the corridors that the NBU will have to determine
the hryvnia's rate already next week. It is a desperate step to do so without
IMF approval. (Recall that under conditions of distrust in the authorities,
any announcement of changes in the national currency rate would be interpreted
as a distress signal.) And there are many unclear things about the crux
of future foreign exchange policy.
It will be most difficult to come to mutual understanding in negotiations
between the Ukrainian government and the IMF mission in the question of
exchange rates for 1999 and in the mechanism of relations between the NBU
and the Ministry of Finance, said Economy Deputy Minister Viktor Kalnyk
last Wednesday. In other words, in choosing between a floating exchange
rate and clear predictable state policy on the one hand and fixed rate
and momentary pre-election policy on the other, the Cabinet of Ministers
will opt for the latter.
The former naturally suits the NBU. At least it is difficult to explain
the emotions Viktor Yushchenko showed in public last Wednesday evening.
"As a matter of fact," he told Interfax-Ukraine, "I am disappointed about
many things, which arise concerning this question especially on the Ukrainian
side. I see what representatives of Ukraine's print media say and the question
arises whom are they serving? There is an impression that these people,
these establishments, and these state branches of authority care nothing
at all about Ukraine...
"We commit a major crime against Ukraine, when we allow such comments
on Ukrainian events. Unfortunately, I cannot be more specific."
It is difficult to figure out to whom he addressed his reproaches. Usually
Yushchenko does not allow himself even a slightest hint of criticism of
the authorities. The situation is obviously critical, if he did. What can
be worse for the NBU, than the national currency and banking system's collapse?
And this threat is very real.
The banker's anxiety can be easily explained. Absence of external financing
will inevitably lead to a situation where Ukraine will be forced to admit
its inability to pay off previous debts and will announce its bankruptcy.
At least the analytical note of the Finance Ministry, On Measures to Make
Foreign State Loans More Effective in 1999, prepared for the meeting of
the Cabinet of Ministers on Friday, January 22, describes the situation
this way. (According to the Finance Ministry calculation, the total amount
of financing Ukraine needs to attract externally is estimated at $2.2 billion.
$520 million from this sum can be granted to support the national currency
on the account of IMF's EFF loan.)
However, catastrophe has begun to loom before the government and nation
long ago: no reforms have been implemented since the day of their announcement.
This is why it will not be the guest creditors, who will be held responsible
for decisions Ukrainian politicians make, but the country's population,
who elected those politicians.
PS: The practice of the currency corridor will continue in Ukraine
in 1999 and "this is not a matter for discussion," presidential aide Valery
Lytvytsky declared in an interview to Interfax-Ukraine.






