KIEV, Ukraine — The recent conflict between Ukraine and Russia has left Ukraine in economic despair, and the international community has responded with several aid efforts. The conflict, which has resulted in a failing economy for Ukraine, has been a major topic in recent news.
President Barack Obama warns against indifference toward the conflict, stating that it “would ignore the lessons of two world wars.” The IMF’s goal has been to unlock U.S. $27 billion in foreign aid for Ukraine. Several countries have joined together to offer this aid, including the U.S. and the European Union, but Ukraine’s finance ministry has explained that they will need a total of U.S. $35 billion in aid over the next two years or the government will have to default.
Secretary of the National Security Council of Ukraine, Andriy Parubiy, describes that financial support for the country is key in responding to possible attacks from Russia that were intended to undermine presidential elections in Ukraine this past May. Parubiy reported that “18 leaders [of]pro-Russian ‘subversion groups’ had…been arrested in southern and eastern Ukraine over attempts to foment unrest.”
Parubiy also noted that though attempts to undermine the government were failing at the time, there was still a high risk that “Putin would attempt another cross-border intervention” since establishing “control over Crimea.”
Economic strategies by Russia to harm the Ukrainian government include revoking a gas discount by the Kremlin, resulting in an estimated doubling of fuel prices in Ukraine. Russia has also curbed exports to Ukraine, resulting in an estimated drop in economic growth by one percent. It was estimated that, starting this past April, Ukraine would pay $480 per 1,000 cubic meters of Russian gas, which comprises half of the country’s fuel supply.
Shortly after Viktor Yanukovych was overthrown in response to his attempts to integrate Russia and Ukraine, Oleksander Turchinov was voted in by legislators as acting president. Turchinov described his new position as a “kamikaze mission,” noting that Ukraine is an economic mess and that the country’s GDP would decline by three percent while inflation would rise by 14 percent in 2014 alone.
The Ukrainian economy is certainly in trouble and is facing a possible third recession within the past six years. In response to the economic struggles facing Ukraine, President Obama has been urging Congress to authorize loans to the current government, as it would not only provide needed assistance, but also discourage further encroachment of Ukrainian territory by Russia. Initial passages of aid bills were stalled by political complications.
According to National Journal, a comment by an anonymous Republican Senator reports that Senator Mitch McConnell and John Boehner wished to use the passage of the bills as leverage against the Obama administration. “They want to trade the IMF reform sought by the Treasury Department for turning around a proposed change in the tax code that would make it harder for social-welfare organizations to contribute to the political process.” Senator John McCain and other Republicans do feel differently, however.
McCain, who supports the IMF’s Ukraine aid package, explained to the National Journal that Congress should unite in support of Ukraine regardless of political differences. “I’m not going to let IMF stand in the way of a reaction of Congress on an invasion of a country, and if others do, then they have their priorities terribly skewed.”
Another factor complicating the aid issue is RT’s reporting on the conflict. RT is “funded by an annual $33 million dollars from the Russian government.” Recent reports by RT cite Ron Paul, who explains that foreign aid packages are not received by the people and “make them poorer.”
Two RT journalists have spoken out against RT’s coverage of the Ukrainian conflict. Anchor Abby Martin stated on air: “What Russia did is wrong…Military intervention is never the answer and I will not sit here and apologize or defend military aggression.” Fellow Anchor in D.C. Liz Wahl resigned from her position live on TV stating she couldn’t be “part of a network funded by the Russian government…that whitewashes the actions of Putin.” Despite all the conflict and disagreement though, many aid efforts were eventually approved.
The U.S. Congress approved the proposed aid package after weeks of disagreement. The bill included $1 billion in loan guarantees to Kiev, additional sanctions to Moscow and $150 million in direct aid money.
Senator Harry Reid stated, “This bill is a reality check to Vladimir Putin that the United States will not stand idly by while he plays the role of a schoolyard bully.” The European Union has also contributed up to 11 billion euros in loans and grants over the next seven years. The European Bank for Reconstruction and Development has also pledged to increase their investments in Ukraine by an additional 1 billion euros per year. President Obama describes the IMF’s unlocking of 27 billion dollars in aid as “a concrete signal of how the world is united with Ukraine.”
– Christopher Kolezynski
Sources: National Journal, Bloomberg, RT, Global Post, The Washington Post, The Guardian