The IMF has approved a $17 billion package to the Ukraine. They’re calling it a “bailout” but that’s just politicospeak for a “massive freebie”. In a year or few we will be reading about how “amazingly” and "unexpectedly" the bailout money has been siphoned off despite the IMF's stringent controls.
Let me make a prediction here: 80% of that money will go into anything other than development and improving the economy. It will in effect be stolen.
The Ukraine is one of the most corrupt countries in the world. According to Transparency International Ukraine ranks 144 out of 177 countries. As if this isn’t bad enough, they currently do not have a legitimate government and as a cherry on top of the cake, they have foreign forces invading them and they are on the brink of civil war. Good times indeed.
Suffice to say, the country is in a bit of a pickle. In fact the only working infrastructure they do have is that of structural corruption.
The problem is that the bailout money is meant to prop up the economy and help it back to growth. For this to work as planned, while the economy is reforming, it would require the bailout money to oil the machine. Due to widespread corruption a very small amount of that bailout money will actually be used for what it was meant to be used for.
As a result of the money being stolen and not going to where it is supposed to go, the harsh IMF bailout criteria will hurt the average Ukrainian citizen, shrink the economy and destabilize the populace further.
On the other side of the coin there will be a small elite of Ukrainians who will be busy skimming the IMF money via a network of cross jurisdictional corporate structures where the money goes in to a local company and then after passing through several vehicles ends up in a respected Western bank (most likely in Europe) in the accounts of corporate entities. It’s basically an industrial production line type cleaning process: IMF money goes in one end and comes out the other end as money that has no possible link to the IMF.
If it wasn't so blatantly criminal it'd be a thing of financial engineering beauty. (You can tweet that)
Actually, you know what? I’ll write a new blog post on how I’d skim the IMF money if I was criminally inclined (which I’m not) and if I was a Ukranian political insider (which I may be, you never know).