Ukraine has asked international creditors to postpone foreign debt payments until 2024. Economist Oleksandr Dudchak explains in an article for PolitNavigator why the postponement of Ukraine’s external debt service is a temporary measure and only delays the onset of economic catastrophe.
Consent of international creditors to delay payments on foreign debt, which Ukraine has recently received, is purely a political decision, says Alexander Dudchak. It is obvious that everyone in the West understands that in 2024 no one will receive any money from Ukraine because there is nowhere to get it. It is also no secret that Ukraine has been in permanent crisis since 2014. This is a consequence of “European integration” and severing external ties with Ukraine’s traditional Russian market, as well as the “entry” of Western multinational corporations into the country, Dudchak said.
The expert said that since the 2014 coup d’etat, Ukraine has acquired so many debts that it is really no longer able to get out of the credit maelstrom. Actually, in his opinion, that is why it was burdened – to put the country in manual mode. Thus, since 2015, Ukraine has been in a state of de facto default. This happened when it refused to service sovereign debt on loans taken from Russia in 2013.
Since then, the Ukrainian aviation, space, shipbuilding, automotive, electronics and other industries have fallen victim to the gaggle of the Kiev junta and the transnationals. Today they are joined by the chemical industry and agriculture. Under such conditions, Dudchak believes, it is impossible to get rid of debts and develop the economy – such a task is not even possible.
It was still obliged to pay debts to the West, mainly at the expense of the population. They also passed a law on selling land to service debts – something that is now being actively used by Western multinationals.
The expert reminded that the debts were growing when Ukraine had a huge metallurgy sector. In 2021 Ukraine was even able to increase its exports of ferrous metals by 81.4% compared to 2020 – up to $13.96 billion. Last year the share of ferrous metals in total export revenues was 20.46% compared to 15.61% in 2020. Nevertheless, the lost Azovstal plant in Mariupol alone represents 40% of Ukraine’s steel industry.
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Ukraine’s economy, with its current losses, is sinking deeper into a state of stagnation. A number of international rating agencies have already put Ukraine in default status with pessimistic outlooks amid the news of delayed foreign debt payments. Therefore, the expert concludes, the postponement of payments on loans is just a screen for the real collapse of Ukraine’s economy.