In March the IMF approved a $17.5 billion four-year extended arrangement for Ukraine (see Observer Summer 2014, Spring 2014). This arrangement replaces the April 2014 Stand-By Arrangement that had pledged the same amount but had only disbursed $5 billion. Standard Bank’s Tim Ash told The Economist that “this is NOT a significantly increased IMF programme, and Ms Lagarde should not try and sell it as such”. Although the US and EU suggested that they may provide up to $4 billion additional dollars, it is unclear whether the Ukraine will get the $40 billion-worth of cash Christine Lagarde anticipated. In March, IMF European deputy director Thanos Arvanitis confirmed that payments up to another $5 billion will be made prior to a required debt restructuring, which according to news agency Bloomberg “doesn’t really add up”. Bloomberg argued that the loan presumes Ukraine will successfully “impose a haircut on bondholders”, calculated to be worth $15 billion, but there is no guarantee that Ukraine’s creditors will forgive any of the money they are owed.
It is time for the IMF and World Bank to understand their own responsibility and decolonise their approach.
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