21:28 GMT +327 March 2017
    Zaporozhstal, one of Ukraine's largest steel makers

    Energy Price Hike Leaves Whole Sectors of Ukrainian Economy on Brink of Collapse

    © Photo: Facebook/Zaporizhstal
    Get short URL

    IMF-mandated hikes in electricity prices for businesses have made whole sectors of the Ukrainian economy uncompetitive, making it more profitable to shut factories down than to keep them operating, says Ukraine's oldest and largest business association.

    Speaking in Kiev on Thursday at the Ukrainian League of Industrialists and Entrepreneurs' annual conference, president Anatoly Kinakh pointed out with dismay that authorities in Kiev did not bother to carry out the necessary economic calculations when they decided to raise tariffs.

    "Where are the necessary technical and economic calculations?" the official asked. "Where were the forecasts about how this will affect the competitiveness of our economy? How does the tariff increase correlate to consumers' ability to pay? There are no answers to these questions. And this is very serious, because all we are doing is seeing the decline of citizens' standard of living."

    For example, Kinakh noted, the massive Zaporozhye aluminum plant has recently been forced to stop operations completely due to the high cost of electricity; its energy-intensive production has been made uncompetitive thanks to whopping 40% electricity price hikes and the end of subsidies.

    "If before, the plant was able to purchase electricity at a special rate, now this is impossible; the plant is being offered electricity at the same price as other companies, making it uncompetitive," the official lamented.

    The legendary Zaporozhye aluminum plant, established in 1930, was once one of the largest aluminum smelters in the world, and famous for its unique production methods. Producing over 100,000 metric tons of aluminum a year in its heyday, the plant played a crucial role in contributing to many key industries, including the Soviet and post-independence Ukrainian aerospace industry, which has suffered its own tragic decline in recent years. Antonov, once a legend of global civilian and military aircraft production, isn't expected to produce even one plane this year.

    Ukraine's International Monetary Fund-mandated austerity measures, combined with the loss of Russian markets for Ukrainian goods, have also hit ordinary Ukrainians hard. The IMF has insisted on further cuts to subsidies on utilities for low-income citizens, leaving millions uncertain where they will get the money to heat their homes this winter.


    Denial, Frustration, Outrage: Kiev Having Trouble Dealing with Trump Victory
    Ukrainians in Shock as 'Revolutionary' Political Elite’s Riches Revealed
    Kiev’s Sanctions Against Russia Backfire at Ukrainian Economy
    Millions of Ukrainians Don't Know Where to Get Money to Heat Homes This Winter
    Ukraine's PM Hopes EU to Decide on Visa-Free Regime With Kiev in October
    US Concludes $1Bln Loan Guarantee to Ukraine - Commerce Secretary
    Ukraine Becoming Poorest Country in Europe Amid IMF-Mandated Austerity
    electricity price hike, competitiveness, economic crisis, energy prices, Ukrainian League of Industrialists and Entrepreneurs, Anatoly Kinakh, Ukraine
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik
    • Сomment

    All comments

    • avatar
      double bonus
      The IMF is more likely to liquidate Ukraine in a mass bankruptcy,
      than create any increased standard of living, among its people.

      Sorry, you didn't figure that out, until now?
      Make the calculations, yourselves, if you can.

      Please don't rely on the IMF for anything, except to exploit them for your
      own benefit; if you can figure out how that can be done, somehow?
    • avatar
      That's exactly why for instance Singapore and Iceland refused 'assistance' from the IMF. The IMF 'Washington Concensus" Recipe imposes an extremist view of liberalization on the the client often inducing a kind of death spiral on the economy so that outside investors can buy assets at rock bottom prices. Only when there is nothing left to sell economy and prices are allowed to recover. The IMF facilitates such asset stripping resulting in a massive transfer of wealth from society to the local and foreign elite each time again.
    • avatar
      tobi.gelandoin reply toJPH(Show commentHide comment)
      You are so right !!! but all the politic leaders find this the easy way to fill there pockets whit money from IMF !!!!
    • avatar
      Erik Trete
      The West has repeatedly condemned Russia for "attacking" Ukraine, which it never did. But Russia does not have to, for it is the West that is steadily destroying Ukraine.
    • avatar
      Those that had doubts of the true US intention need not have any doubts at all. Once the highly prized strategy Crimea was made off limits the US only had one interest to destroy the Ukrainian economy and leave it pillaged and plundered for Russia to spends 100's of Billions to restore the devastation no different to there aims in the middle east.

      Thank God for Trump that this BS will stop.
    • avatar
      Marques rouges
      Isn't that what happened in Russia under Yeltsin ? Once the industries have been shut down, globalist oligarchs can buy them for $1, literally, and after some investments make billions out of them ?

      Maybe the IMF should ask the US to stop all subventions, Tesla and other high-tech companies get billions of public money ! After all the US is one of the most indebted country, too ?
    • avatar
      Kiev terrorists, you will all die this winter.
    • Abinico Arts
      Hummm - IMF uses money as bullets and bombs.
    Show new comments (0)