Eyebrows raised as IMF tweaks rules for Ukraine

Herald Reporter

IN a classic example of Western hypocrisy, double standards and unilateralism, the International Monetary Fund (IMF) is extending a staggering US$15,6 billion loan to Ukraine, the first time that the global lender with 190 members is helping a nation at war, albeit with no consultation with member States.

Analysts said the position that was taken by the IMF to roll out a war package to Ukraine goes to demonstrate that in the Western world’s eyes, some countries are more important than others and that the West will bend the rules to achieve their goals.

Apparently, with Ukraine in mind, the IMF recently changed a rule to allow loans to countries facing “exceptionally high uncertainty”.

Analysts said rules are being tweaked for Ukraine because “it is their kith and kin” but when other countries that are also members of the IMF are faced with a similar humanitarian crisis if not worse, the West often looks the other way.

Justifying the bailout, IMF official Mr Gavin Gray said in a statement the aim of the international lender is to save Ukraine’s economy.

“Russia’s invasion of Ukraine continues to have a devastating impact on the economy: activity contracted by 30 percent in 2022, a large share of the capital stock has been destroyed, and poverty levels have climbed.

“The programme has been designed in line with the new fund’s policy on lending under exceptionally high uncertainty, and strong financing assurances are expected from donors, including the G7 and EU.”

Mr Gray also said the agreement would “mobilise large-scale concessional financing” for Ukraine from international donors and partners, without giving further details. 

The funding still needs to be approved by the IMF’s executive board.

The US is the biggest backer of Ukraine with half of its aid being military. This goes towards payment for drones, tanks, missiles, and other munitions systems as well as training, logistics, and intelligence support.

Analysts said this just shows how Bretton Woods institutions are hegemonic extensions of the West with the current scenario supporting the Western war industry drawing from a fund that is meant to ostensibly service all member states without prejudice.

According to the IMF, Member quotas are the primary source of its funding depending on size and position in the world economy.

Justifying the huge financial bailout to Ukraine, the IMF, whose major funder is the US which is sponsoring the war through a proxy and whose military industry is reaping huge dividends from the ensuing crisis, said there is a humanitarian crisis in the country yet it did not move an inch when the Democratic Republic of Congo was under siege.

Instead, by virtue of its financial might, the western world has always had its way much to the detriment of developing countries like Zimbabwe which was punished when it intervened in the DRC in the late 1990s, along with Angola and Namibia.

This has resulted in African countries calling for reforms of the IMF, one of the Bretton Woods institutions that were formed soon after World War 2 to help struggling Western nations.

They contend that on the African continent, the IMF has done more harm than good with its stringent policies on borrowers such as privatisation, market deregulation, and austerity in social services, failing to ensure economic stability, but rather engendering human rights violations. 

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