The only thing that seems certain about the geopolitical scrum going on in Ukraine is that it will not end easily. The country is wedged between several imposing, flawed and inherently self-interested powers. The United States would like to hedge Russian hegemony, with the Republicans already latching onto the issue to push for a ramp-up in fracking – which would expand their export market, allowing them to fill Ukraine’s energy gap Russia’s Gazprom would leave behind. 

The European Union, that dead fish, has finally achieved a modest stability, and now Ukraine is being invited to line up along other anemic, economically-weaker members such as Greece and Spain to take a bailout and a policy care package straight out of Thatcher’s Britain. And of course, the kleptocratic elephant in the room, and their war-like charades.

I’d like, however, to remove this column from the situation-on-the-ground, and think for a minute about some factors that brought Ukraine its damned-if-you-do, damned-if-you-don’t situation. In both 2008 and 2010 the International Monetary Fund (IMF) agreed to conditional loans (totalling 31.5 billion dollars) to save Ukraine’s fledgling balance sheet. Both loans fell apart early on, with the government at the time unable or unwilling to live up to the terms: a laundry list of well-meaning reforms – as always generic, superficial, applied at arm’s length by a recently-elected government – and destined to fail. A key example are the cutting of tariffs on natural gas, meant to curb consumption, raise government revenue and depoliticize the activities of Naftogaz, the country’s leading energy company, employer and corrupt cash-cow of government of officials. These subsidies, which equaled over seven percent of the country’s GDP in 2012, undoubtedly needed addressing, but of course the real problem was corruption, an issue the reforms paid only the thinnest lip service to. 

The 2010 loan was cancelled after only three of the 15 billion dollars were doled out to prop up the Yanukovych regime. And in the aftermath, radio silence: the money stopped flowing, dialogue stagnated and things devolved to the situation we’re left with now. 

What the IMF needs is a strong mandate to target corruption. Instead of trying to instantly reform troubled states into by-the-book members of the global economic system, the IMF should otherwise focus on the culture of the subject country’s civil service and educational systems; tie loans to (albeit more nebulous and hard-to-quantify) stats like a country’s global transparency ranking, rather than its balance sheet. None of this is easy but that doesn’t mean it’s not worth talking about. I’ve lived in Russia and spoke with Ukrainian emigrants about the fetid corruption strangling the civil service and university systems. What effects were a couple years of balanced books going to have on such a culture? Considering the IMF has had from its onset the mandate of ‘maintaining stability in the global economic system’, you would think an event like 2008’s could have prompted a modicum of existential reflection on the part of one of the most important and potentially useful institutions we have to tackle international problems. So far not so much.

Christopher Friesen is a writer and neuroscience student who bangs his head against the global economic system daily.

Published in Volume 68, Number 24 of The Uniter (March 19, 2014)