Page 63 - bne magazine November 2021_20211104 uzbekistan risding

bne November 2021 Eastern Europe I 63
attacks by “rogue states” with North Korean long-range missiles being named as one threat. However, missiles were then deployed in Romania and Poland just across the border from Russia’s western military district.
Military analysts have argued that Russia’s decision to take control of the Crimea was partly to ensure the western- leaning Ukraine would not fall under the influence of Nato and to secure the large naval and troop bases in Crimea that Russia has long rented from Ukraine that also secures the southern flank of the western military district, now threatened by Nato missiles in Romania and Poland. As bne IntelliNews has reported, Russia has already been re-establishing itself
in the Mediterranean after being almost entirely absent for two decades.
It was hoped that the Geneva summit could cap the gradual military escalation. Putin also announced last week that Russia’s new class of hypersonic missiles that can evade tradition anti-missile defences have just gone into service with Russia’s military, and China also stunned the US intelligence community by testing a similar hypersonic missile that circled the globe once before homing in on its target.
Biden made the gesture by agreeing to renew the START III treaty during his first week in office, another key Cold War missile security agreement, and said from the outset that he was willing to discuss restarting some
of the other agreements.
Now relations have gone sour again.
Moscow said that Nato’s decision to expel its diplomats from Nato earlier this month undermined hopes that relations with the US-led alliance could normalise.
"NATO is not interested in equitable dialogue and joint work," Lavrov said on October 18, announcing the closure of the Russian mission. "If that's the case, then we don't see the need to keep pretending that changes in the foreseeable future are possible."
German Foreign Minister Heiko Maas said Russia no longer seemed willing to talk to the West.
"It's more than just regrettable, this decision taken in Moscow," he said. "It will seriously damage the relationship.”
IMF reaches staff level agreement
on $5bn loan to Ukraine
Cameron Jones in Kyiv
The government in Kyiv has convinced the International Monetary Fund (IMF) that is it serious about reforms and persuaded the fund to unfreeze its $5bn Stand By Agreement (SBA), the fund said on October 18.
The decision clears the way for the release of the next $700mn tranche to be release that has been delayed by the IMF due to foot dragging on reforms by Kyiv. The programme was suspended after Ukraine’s Constitutional Court struck down many of the key laws put in place at the IMF’s insistence to fight corruption.
Under the terms of the new deal the SBA will also be extended by six months, which had been due to expire in December. Ukraine has already received $2.1bn from the IMF last summer, but two tranches of $700mn and $2.2bn are still outstanding. The six month extension makes it possible for Kyiv to also receive the final tranche of $2.2bn, which may arrive early next year.
After an online review of the government’s progress, the Washington-based fund said Monday, 18 October that it had concluded a staff-level agreement to unfreeze the financing, which has been inaccessible for more than a year because its terms weren’t met. A sign-off by the IMF’s board, planned for November, is still left to do.
“An IMF mission team and Ukraine’s authorities have reached a staff-level agreement on an updated set of eco- nomic, financial and structural policies to help address the economic and health crisis caused by COVID-19, while main- taining macroeconomic and financial stability, reducing vulnerabilities and tackling key obstacles to private invest- ment,” the fund said in a statement.
As Ukraine’s excruciatingly slow pace
of vaccination continues to hinder its fight against the pandemic and subse- quent economic recovery, the IMF has downgraded Ukraine’s growth outlook for 2021. Following this new agreement,
however, Kyiv stands to get a disburse- ment of about $700mn, having so far only received one tranche from the loan, which was sealed in mid-2020.
The IMF has stated that the extended programme’s objectives include sustain- able fiscal policy, safeguarding central bank independence, tackling corrup- tion and “reducing the role of the state and vested interests in the economy
to improve the business environment, strengthen corporate governance, attract investment and raise the econo- my’s potential.”
The central bank is at the forefront of these objectives, following last year’s sudden departure of its governor,
who had consistently accused the government of interference. President Volodymyr Zelenskiy has chosen a suc- cessor and has provoked controversy for offending members of the team he inherited, which caused various waves of departures.
www.bne.eu