KIEV, Ukraine, Feb. 24 (UPI) -- Ukraine now must appeal for Western help and external financing to avoid default and economic collapse.
Since the Ukrainian opposition essentially ousted former president Viktor Yanukovych, Moscow has told Kiev that they are withdrawing all of Ukraine's privileges, including the loans that Russia was going to grant Ukraine to offset its $73 billion in debts. Their only option is to bring in international reserves and according to estimates, they have less than two months to import coverage.
"It doesn't look good for Ukraine," says economist Lilt Gevorgyan, "unless they manage to get that foreign currency as soon as possible." If they do go to the EU or the IMF for this currency, Gevorgyan says they will be expected to enact reforms. "The IMF has been refusing to be that shining knight," she says, "They had been saying that Ukraine has to prove that they will finally embark on reform, that they will cut their public spending bills, that gas prices will be liberalized."
She says the changing circumstances that have left Ukraine without a fully formed government could make it even more difficult for the IMF to extend loans and will demand reforms that consecutive governments in Ukraine have not enacted. Gevorgyan says there is plenty of potential for economic growth and it's not the lack of industry that has hampered the economy.
"Ukraine has been suffering from poor economic management," she says. "It's the mismanagement that didn't create the business environment foreign investment and private investment so it's almost waiting to be unlocked."
U.S. President Barack Obama has said that the U.S. will work with Ukraine to prevent economic collapse, and Secretary of State John Kerry is traveling to Kiev this week with a team of economic advisers to sit down and talk with the new Ukrainian government.