They are, as such, encouraging as they seem to allow Ukraine, under certain circumstances, to receive further international financial support even without a full agreement with Russia concerning Kyiv’s $3 billion debt to Moscow.
While the IMF is to be congratulated for this partial solution, its policy modification came late, and is, so far, too little.
Despite its adaptations, the IMF continues to treat Ukraine’s remaining obligations towards Russia as an issue of special care and soft pressure on Kyiv.
By doing so, the IMF continues to send ambivalent signals to the international community of states. The IMF’s stance implies that, even after a country annexes the territory of, and conducts a hybrid war against, a neighboring state, the occupying and war-conducting country can count on IMF support in recovering debt from the occupied, war-torn country.
Moreover, a guarantor-country of the Treaty on Non-Proliferation of Nuclear Weapons may use its nuclear weapons to secure militarily acquired territorial, yet will, under IMF regulations, still benefit from the fund’s support in extracting money from the state the territory of which it has annexed.
Neither the debtor state’s previous abrogation of a large nuclear weapons arsenal in exchange for security assurances from the lender state, and the lender state’s shrewd use of such a naïve move to extend its territory will change the IMF’s position, in principal.
Nor will the debtor state’s heavy economic suffering from the aggressor state’s military, trade and information war lead to a full exception of the suffering country’s debt towards the aggressor state from the IMF’s lending rules.
Oddly, the IMF’s strange schematism undermines the very international order of which it is an integral part. The organization is, after all, called the INTERNATIONAL Monetary Fund.
“International” implies that there are units called “nations” that conduct financial operations with each other. If, however, the IMF does not presume the territorial integrity and political sovereignty of the nations whose financial affairs it claims to regulate as sacrosanct axioms, the IMF seems to cease being properly “inter-national.”
It would be only consistent to rename, in such a case, the IMF somehow, in order to underline the IMF’s relativistic stance on its member countries’ territorial integrity and mutual respect of each other’s political sovereignty. It could be, for instance, re-titled Inter-Governmental Monetary Fund so as to underline that the Fund does not presume nations, but only governments as its partners.
Finally, one may note that Russia has officially foregone its legal obligations towards Ukraine because – so the Kremlin argues – Ukraine is, after the regime change of 2014, a different country than before February 2014.
That is why the Kremlin sees, for instance, the signature it provided, during the CSCE conference at Budapest in December 1994, under the Memorandum on Security Assurances for Ukraine as now being void.
Moscow has, with its annexation of Crimea and war in the Donbass, violated dozens of other bilateral and multilateral agreements involving Russia and Ukraine.
It would be consistent, to interpret, for the same reason, all other treaties between Ukraine and Russia concluded before Feb. 21, 2014, as being also void as long as Ukraine’s full territorial integrity is not restored, and Russia has not re-accepted Ukraine full political sovereignty and historic continuity. This condition would also exclude the Eurobond agreement of December 2013 from an obligation to be observed. As, according to Moscow’s current view, the country which borrowed $3 billion from Russia two years ago is not any longer existent, it would be logical to also treat reborn Ukraine’s debt to Russia as currently non-existent.
The IMF’s rules were not prepared for such a situation and have still not been fully adapted to it. The Fund’s bureaucracy and member countries should make sure that the above inconsistencies are corrected. The fund’s mission is to stabilize the international order, and not to provide a helping hand to its de-stabilizers.
Andreas Umland is a senior research fellow at the Institute for Euro-Atlantic Cooperation in Kyiv and general editor of the book series “Soviet and Post-Soviet Politics and Society” published by ibidem Press, Stuttgart and Hannover.
