The IMF gave Ukraine $17 billion. Now what?
International Monetary Fund Managing Director Christine Lagarde speaks following an IMF board meeting on Ukraine on April 30, 2014 at IMF Headquarters in Washington, DC.
Ukraine is getting a $17 billion International Monetary Fund loan package. Ukraine’s leadership now faces an unusual challenge: deciding how to spend the money when an important chunk of the country is under pro-Russian control.
“However they spend this money, they’re going to try to make sure they do it in a way that’s not going to entice or instigate Russian aggression,” says University of Mississippi political scientist Jeff Carter.
Some of the money will help Ukraine settle a multi-billion dollar gas bill with Russia, among other creditors. Deciding where the money goes will have political consequences that could determine the future borders of the country.
“If it doesn’t have the Eastern part of the country, the industrialized part, it loses a lot of the economic clout and wealth of the country. It also leaves itself open to further destabilization by the Russian government,” says Nicholas Burns, a former U.S. Ambassador to NATO, now a professor at Harvard University’s Kennedy School of Government. “It’s a fateful moment if we want to see an integrated Ukraine survive.”