Blue &Yellow: Politics and Economics in Ukraine

IMF will soon decide if it will release the third loan installment to Ukraine. Vladimir Socor notes in EDM (V.6, issue 114) some of the political issues surrounding the conditions the IMF placed before Ukraine in return for a loan

Finally, there must be adequate financing for anti-crisis programs. The International Monetary Fund (IMF) has disbursed the first two tranches of a $16.4 billion anti-crisis package that the United States supported. Disbursement of the remainder, however, is conditional on a decision by the Ukrainian government to raise internal prices for natural gas prices for domestic consumers through at least partial elimination of state subsidies. More realistic prices could also save Naftohaz Ukrainy from the constant threat of bankruptcy and possible takeover of its pipelines by Gazprom. A price hike by Yulia Tymoshenko's government ahead of the January 2010 presidential election could, however, predetermine Tymoshenko's defeat and the victory of her rival Viktor Yanukovych. Meanwhile, the Tymoshenko government agreed during Biden's visit to settle the claims of the U.S. Overseas Private Investment Corporation (OPIC) in the country. This move will enable OPIC to resume its activities in providing risk-protection for U.S. small and medium-sized entrepreneurs investing in Ukraine (Interfax-Ukraine, UNIAN, July 21 - 23).