IMF loans in doubt but Ukraine receives US military aid

RUSSIA / FSU POLITICS - In Brief 04 Mar 2021 by Alex Teddy
On February 28 the IMF completed its review of Ukraine's economy but did not commit to granting the next installment of a USD 5 billion loan to Ukraine. Ukraine anticipates USD 700 million June 2021. The government badly needs the money. Kyiv is trying to win a EUR 600 million subvention from the EU in fall 2021. Brussels will only grant that if the IMF's loan comes through. Ukraine has been lent USD 2.1 billion by the IMF since May 2020. The IMF is annoyed because Ukraine has not satisfied the criteria for the rest of the loan. Problems in the judicial system and the National Anti Corruption Bureau have jeopardized further loans. Zelensky said there is no Plan B if the loans do not materialize. Foreign direct investment is looking like it will reach USD 3 billion in 2021. But it is vital to secure those loans for FDI to continue. On March 1 Washington used the Ukraine Security Assistance Initiative to finance the Ukrainian Armed Forces. The scheme is providing money but also hardware. This is the first tranche of such funding under Biden. The scheme started back in 2014. The funding includes two patrol boats. Tactical equipment, radar and satellite analysis equipment are being provided. There is also military training.A further USD 150 million is coming contingent on Ukrainian military reform. It is uncertain whether Javelins will be provided. There has been an uptick in the conflict lately. Ukraine has taken casualties from snipers. Kyiv said that the snipers are from the GRU (Russian Military Intelligence).

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