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Ukraine continues to accumulate debts according to the official data of the Finance Ministry, Ukraine's state debt in the hryvnia equivalent has risen 38.2% since the beginning of the year, and in the dollar equivalent - by 1.2%. The International Monetary Fund and other financial institutions remain the main source of attracting foreign currency. It is clear evidence that domestic economic and financial policies have to be adjusted - using the borrowed funds on reforming, and not "wasting" them, nor using them for repayment of previous debts, according to the ULIE.
The total amount of sovereign and state-guaranteed debt of Ukraine is almost USD 71 billion. However, officials have optimistically reported successful restructuring of the debt, while the terms of such agreements do not liquidate debts, but only prolong the existing debt obligations.
"The Finance Ministry announced a "write-off" under 13 out of 14 series of outstanding eurobonds and the reduction of the debt amount by 20%. However, it does not mention the fact that the average interest rate was increased by 0.5%, while cost recovery instruments set out in the contract provide for compensation for creditors for written off liabilities. We do not get rid of loans but prolong them over years," said President of the ULIE Kinakh.
He said that this approach only helps in the short-term. Liabilities do not disappear, debts must be repaid. Given the fact that the funds provided by international creditors are used only to reduce the budget deficit or the repayment of previously attracted debts, in a year or two Ukraine will face exactly the same situation as today.
"Due to its debts, Ukraine remains in the instability zone. What must be done? First of all, to promote economic growth, ensuring a source of financial receipts in the future, it is necessary to carry out a number of measures: to finally implement the tax reform that will allow businesses to grow, restore industrial production and protect the domestic market, while actively seeking new export markets for domestic producers. Ukraine needs to get out of the "debt trap", and not get stuck there," Kinakh emphasized.
These proposals outlined by the ULIE and business community have been submitted to senior managers and relevant state officials. In particular, the anti-crisis program of joint actions of government and business, which is constantly updated based on the current situation, sets out a number of specific steps that will help to stabilize the economy, protect businesses and improve the purchasing power of the population. This comprehensive program of economic recovery, the only anti-crisis plan currently available, requires immediate implementation - together with government, business and civil society.
"Reforms and restructuring must be part of the anti-crisis plan that is being implemented in the country. When these decisions are isolated, and are not backed up by carefully thought-out measures, there will be hardly any result. It is worth noting that only by growing economically will the country will be able to service its debts in due time. This is the only correct approach and needs to be implemented today, in the context of Ukrainian perspectives," Kinakh said.