Carnegie: Ukraine Needs a Financial Lifeline, Too2022-12-05 | Expert publications, State of the economy
By Oleksandra Betliy. Russia’s invasion of Ukraine has prompted unprecedented levels of military assistance from the West. But Ukraine needs more than weapons: it needs a financial lifeline. The inadequacy of the international response has revealed that developed countries and international financial institutions (IFIs), including the International Monetary Fund (IMF), are not prepared to deal with the financial challenges and global impacts of such an affront to international law.
The IMF and other IFIs have designed their financing instruments to aid countries that have enacted bad but improvable economic and financial policies, have experienced an exogenous crisis against a backdrop of a semi-predictable future, need a relatively small amount of support, or temporarily lack a functioning government. Ukraine does not fit neatly into any of these categories, and its situation shows that the international community urgently needs new instruments for financial assistance.
- Making progress before the invasion
- The (so far) inadequate response
- Wartime Ukraine doesn’t fit the IFI mold
- New tools for new problems
- No silver bullets
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