Ukrainian President Poroshenko has appointed Valeriya Gontareva, the chair of Investment Capital Ukraine, as the head of the National Bank. IMF managing director Christine Lagarde congratulated him on the decision. Poroshenko thanked Lagarde for the IMF “assistance” to Ukraine. Who rules Ukraine and in who’s benefit?
Gontareva is the char of the board of directors of Investment Capital Ukraine, an investment fund and asset management company with $27 million under management. According to ICU’s website she was previously First Deputy Chairman and Head of Financial Markets at JSB ING Bank Ukraine, and a board member of JSC Bank Société Générale Ukraine.
Commenting on the appointment, the Wall Street Journal quoted a Standard Bank analyst who explained her qualifications for the job: “”She is an experienced banker, very well respected in the business, and close to Mr. Poroshenko, with good experience and ties to the western banking community. She should shoo-in well and should be a good fit for the IMF, et al.” (our emphasis)
Poroshenko immediately reported to IMF director Lagarde, like a diligent schoolboy reporting to the headmaster. Lagarde replied that she “supports the actions of the Ukrainian government and is willing to have a fruitful cooperation”.
Of course, Ukraine has already signed a $17 billion bailout with the IMF, which comes with strings attached, so it is only “normal” that the IMF would have a say in the appointment of the new head of the “National” Bank.
Amongst the conditions imposed by the IMF, and willingly accepted by the “interim government” of oligarchs are:
– wage restraint (“keeping public and minimum wage increases in line with productivity growth”)
– cuts in pensions and public sector wages (“suspension of unaffordable wage and pension increases planned by the previous government”)
– mass lay off of public sector workers (“public employment reduction”)
– cuts in welfare benefits (“rationalization of social assistance spending through better targeting and means testing”)
– massive increases in the price of gas and heating, 50% already implemented (“gradual, but meaningful and broad-based increases in the very low gas and heating retail tariffs”)
– privatisation of at least 38 coal mines in the Donetsk