MAIN DIRECTIONS FOR IMPROVING THE EFFECTIVENESS OF UKRAINE'S COOPERATION WITH INTERNATIONAL FINANCIAL INSTITUTIONS
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Keywords:
economic growth, inversion trap, international financial Institutions, market transformation.Abstract
Countries with decline economies for a long time fall into the "poverty trap". The "poverty trap" is an economy condition when mechanisms that hinder development and support themselves are formed. In order to get out of this trap, it is necessary to increase the level of capital per capita by attracting external funds. At the same time, a large number of economists argue that financial assistance from international organizations leads to the decline of recipient countries. The experience of the International Monetary Fund shows that there are examples of both successful programs and those that were poorly implemented.
Our refusal to cooperate with international financial organizations will reduce spending on raising social standards and supporting small businesses, reduce investment in transport infrastructure, and will also result in a forced devaluation of the hryvnia to equalize the balance of payments and, as a result, increase inflation and conduct a restraining monetary policy.
In such circumstances, it is necessary to find out the reasons why our country's interaction with international financial institutions leads mainly to negative consequences, and eliminate them.
There are many reasons for unsatisfied economic dynamics in Ukraine: the level and preliminary trajectory of development, features of the economic system, the structure of the economy, the socio-class structure, the specifics of the relationship between the economy and politics. But the main reason for the failed reforms is related to our country's falling into the inversion trap. The essence of this trap is that efforts to achieve certain goals lead to exactly the opposite results. In such circumstances, the recommendations of international financial organizations aimed at promoting competition and globalization lead to increased negative consequences of the activities of multinational corporations in less developed countries. Thus, Ukraine should not refuse financial assistance from international institutions, but implement internal reforms aimed at increasing labor productivity, reducing energy intensity, and improving the investment climate, creating an effective internal market.
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