Ukraine: IMF bailout program approved

The IMF has agreed to funnel some $10 billion in additional assistance funds into Ukraine’s economy as part of a larger four year bailout program. The fund’s board approved a $17.5 billion loan with tranche payments of some $5 billion next week and the other $5 in the next month for Ukraine to borrow against. Christine Lagarde, managing director of the IMF, reported optimism and assured bondholders that relief is front loaded for the first day.

Ukraine’s parliament agreed to the IMF’s recommendations and amendments to a draft budget, which was the main precondition for the bailout. Simultaneously, fighting seems to be cooling off, at least for now, in Donetsk and elsewhere in Eastern Ukraine. This has not stopped the US from slapping additional sanctions on Ukrainian rebels and a Russian bank believed to be bankrolling their operations. The rationale is the violations of the ceasefire agreement brokered last month in Minsk (coming to be known as the Minsk II Accords).

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News Briefs:

  • Azerbaijan has arrested four recruiters for the Islamic State, according to a press release from the Interior Ministry and Prosecutor-General’s office. The reports cite instances of militants recruited within Azerbaijan to go fight in Syria and Iraq. However, RFE/RL in the linked article suspect that these recruiters were instead members of the Karabakh Liberation Organization, a fifth column type movement that aims to liberate Nagorno-Karabakh.
  • US Secretary of State John Kerry has denounced the Republican letter threatening any potential accords with Iran during a contentious Senate hearing on Wednesday. He additionally confirmed that the US isn’t negotiating a “legally binding” agreement, which could mean that executive actions by any future presidents could disregard the deal. The legally binding nature of the deal is probably deliberate – since any binding deal needs to be submitted to Congress for approval and since the midterms, the Republicans have attained a near-supermajority in both the House and Senate.
  • Tajikistan has put on trial some 23 Islamic “extremists” who are all members of an Islamic-extremist associated group. The suspects were all arrested last year on suspicion of being involved in Jamaat Ansarullah, which Tajik authorities said was a branch of the Islamic Movement of Uzbekistan (IMU). The IMU is on the US State Department’s list of foreign terrorist organizations and is banned throughout Central Asia and Russia, and believed to have links with Al-Quaeda and the Taliban.
  • The Kyrgyz som has reached 62 on the dollar as of yesterday, prompting more speculations as Central Asian economies ride the wave of imminent devaluations of their currencies in the wake of the severe depreciation of the ruble. Exchangers in Bishkek reported a total increase on US currency rising some 2.9 soms. The National Bank has yet to make an announcement, and their last intervention was on February 4.
  • A new law in Turkmenistan has allowed for limited public demonstrations, permitting certain groups to hold “peaceful” public rallies starting on June 1. The state affiliated website Zolotoi Vek reported that the citizens participating must be citizens of Turkmenistan, and is open to political parties, social groups, and religious organizations. Rallies must be held 200 meters from government buildings, including the presidential residence, and cannot be funded by individuals or foreign governments.
  • Jos Boonstra of EU Think Tank FRIDE has published an overview of the EU’s Strategy and outlook on Central Asia, which was reposted to EUCAM and ISN. Boonstra asserts limited to no impact on Central Asian governance by the EU, in direct contradistinction to other regional and global powers that have outlined policy initiatives with specific objectives, naming the “New Silk Road” policy of the USA, as well as the “Silk Road Economic Belt” of China. The EU’s “Central Asia Strategy” is far less detailed and extensive than the other two, which have very specific goals in mind such as “democracy promotion” and “economic development,” among others.
  • The current secretary of the Xinjiang Regional Committee of the Communist Party of China indicated that Xinjiang expects to become a “core area” of Beijing’s proposed Silk Road Economic Belt. The speech included allusions to proposed development of trade, health and education infrastructure, and was complimented by comments made by Xinjiang’s vice chairman of regional development in Xinjiang. Currently, Xinjiang faces a number of obstacles due to poor infrastructure and a death of skilled labor, though the region is currently a trade hub, with established transportation routes leading to Georgia, Turkey and Kazakhstan.
  • The presidents of Iran and Turkmenistan recently held meetings in the Turkmen capital of Ashgabat. The  two leaders agreed to expand their economic relations with the goal of increasing the “value of economic transactions” from $3.7 billion to $60 billion within the next ten years. The two countries are both rich in energy, one of the primary reasons both leaders were optimistic that the goal is obtainable. Iranian President Hassan Rouhani also called for stronger relations between Tehran and Ashgabat, in doing so citing the fact that the two nations have enjoyed beneficial relations since 1991.

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