THURSDAY, MARCH 21, 2019
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IMF urges Ukraine on anti-corruption law
Journal Staff Report

KYIV, Feb. 19 - The International Monetary Fund on Monday urged Ukraine to approve a key piece of the anti-corruption legislation for the country to qualify for resumption of crucial $17.25 billion loan.

IMF Resident Representative in Ukraine Goesta Ljungman made comments after a small team of IMF experts had left the country after a short stay for talks with the government.

It is now important that the authorities move expeditiously with parliamentary consideration of the draft law on the anticorruption court, while ensuring that the necessary amendments are adopted during the parliamentary process to make the approved law fully consistent with program commitments and the recommendations of the Venice Commission of the Council of Europe," Ljungman said.

It is crucial for Ukraine to resume borrowing from the IMF, but the Washington-based lender has been delaying the lending amid concerns that the government has not been doing enough to combat corruption.

Sustained economic growth and stable national currency, the hryvnia, are important for President Petro Poroshenko, who will seek re-election next year.

This creates a dilemma for Poroshenko, who is thought to be behind the continued delays of the anti-corruption legislation.

On the one hand, Poroshenko would benefit politically from stronger economic growth, but on the other hand his closest entourage already benefits financially from the lack of anti-corruption procedures.

It is remarkable that the IMF, a major lender to developing nations, is making specific anti-corruption demands, a sign that the government has been lagging behind and not doing enough for the lending to resume.

"A small staff team visited Kyiv during February 12-16 to discuss some technical aspects of reforms agreed under the program, focusing in particular on the draft legislation on the anticorruption court, Ljungman said.

He said that progress also needs to be made on other delayed measures that are necessary to achieve program objectives, including in the energy sector and with regard to fiscal policy.

"Discussions will continue in the coming weeks," Ljungman said.

Poroshenko said last month that the IMF may send a team to Ukraine in April before resuming its lending, but IMF spokesperson Gerry Rice said recently there are no concrete plans for sending the team to Ukraine yet.

"The timing of the next review mission is not yet decided, Rice said.

The four-year $17.25 billion EFF program launched by the IMF in March 2015, initially involved quarterly reviews of the program, with the first tranche of $5 billion, and the next three $1.65 billion, to be paid during 2015 and decreasing quarterly tranches to $610 million in 2016-2018.

However, Ukraine was able to receive, with a slight delay, the second tranche, $1.7 billion, under this program, in early August 2015, followed by a lengthy pause because of the country's failure to meet a number of conditions, political crisis and changes in the government.

Since the arrival of a new government led by Volodymyr Groysman in April 2016 talks over continued funding have resumed but it was not until mid-September 2016 that the IMF decided to allocate the third tranche, $1 billion. The fourth tranche was received on April 3, 2017. (nr/ez)

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Currencies (in hryvnias)
  21.03.2019 prev
USD 27.17 27.16
RUR 0.423 0.422
EUR 30.85 30.85

Stock Market
  20.03.2019 prev
PFTS 554.5 566.5
source: PFTS


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