IMF now thinks freedom of capital is not such a good thing (incl. for Ukraine)

WASHINGTON—International Monetary Fund economists, reversing the fund's past opposition to capital controls, urged developing nations to consider using taxes and regulation to moderate vast inflows of capitalso they don't produce asset bubbles and other financial calamities. It said emerging markets with controls in place had fared better than others in the global downturn.

The recommendation is the IMF's firmest embrace of capital controls and a reversal of advice it gave developing nations just three years ago. The IMF has long championed the free flow of capital, as a corollary to the free flow of trade, to help developing countries prosper. But the global financial crisis has prompted the fund to rethink long-held beliefs. It recently suggested the world might be better off with a higher level of inflation than central bankers now are targeting.

To do list for Ukrainian president

Today FT publishes an article Daunting task ahead of poll winner which briefly highlights the tasks ahead of the new Ukraine's president. As the election day comes closer the thoughts of the public get directed into the "checklists" for the new head of state.

Here is the list according to FT (with minor comments from UR):

1) Renew IMF aid package for Ukraine, which means undertaking two unpopular tasks - cutting budget and increasing gas price. As of now both candidates are uneasy saying what they going to do if elected.

2)  Paying monthly gas bill to Russia.

3) Investment climate improvement. Ukraines business climate is notoriously bad and improving it is a first priority. At least stabilizing politics will greatly help.

4) Reforming pension system.

5) Seek new growth sources to overcome economy's high dependence on export-oriented sectors, such as steel and chemical industries.

6) Improving public services and infrastructure.

7) Fighting corruption.

There is no point in arguing with this list - it is all true. As it was just 5 years ago (take away the IMF program and the gas bill). The trick in Ukraine is not the lack of knowledge of what needs to be done - most of things are well explained in numerous reports - but the ability to implement the necessary actions. To do that the new president will have to work on the foremost issue - making the state machine able to get things done, preferably according to a mid-term plan.