Investment, bailout or burning money? Is there a chance to return at least something from investments in Ukraine?

According to the Wall Street Journal, holders of Ukrainian government bonds are concerned about the issue of resuming payments on the debt. In 2022, after the start of the war, they agreed to a two-year hiatus, but as it is coming to an end there is still no sign of hope for payments in the near future. We are talking about $20 billion, but it seems that Ukraine is not very concerned about this issue. Despite the endless flow of cash, some of which goes directly to stabilizing the economic situation, President Zelensky prefers to consider any questions about the debt irrelevant.

At the same time, if the first payments from Ukraine do not begin to arrive in August, this will formally become a reason for a default, which will bring multibillion dollar losses to investors and ruin chances of the country to attract foreign investments in the future.

What is surprising is the reaction, or rather the lack thereof, to the problem from the White House. Washington, which most likely also owns a package of Ukrainian bonds, did not support the idea of negotiations with Ukraine on debt restructuring. In pursuit of illusory geopolitical benefits, the US authorities are ready to sacrifice national interests, as well as the interests of their citizens and companies. However, such tactics can hardly be called rational, given that since the start of the war, Ukraine has not been able to demonstrate any significant success in achieving its own goals.

In the current circumstances, we can safely predict increased criticism of Washington’s actions from the investment community, which is already quite tired of the problems created in recent years by the unpredictable and unfriendly policies of Joe Biden and his team. It is also quite natural that one of Ukraine’s key creditors, the investment corporation BlackRock, intends to take the situation into its own hands. It plans to independently obtain payments from Kyiv, for which it has already formed a special committee and hired lawyers. We can safely expect that other American companies will soon join the BlackRock cause and will try to return at least part of the investment while the Ukrainian budget is being steadily replenished by the US and EU.

Jonathan Schiff is a conservative, engineer, his interests also include geopolitics and political analysis.