Ukraine has pledged to accelerate economic reforms – including a crackdown on corruption – as the International Monetary Fund cleared the way for the payment a long-delayed United States dollars 1 bn in assistance to the war-torn country.
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To date, Ukraine has received about $7.62 billion in the program launched in March 2015. The latest disbursement was less than the $1.7 billion Kyiv hoped to get, showing the fund still has concerns about stalled reforms.
The Washington-based lender’s executive board cleared the transfer at a meeting Wednesday, having decreased the amount from an originally planned $1.7 billion because some conditions weren’t met.
According to the central bank, the latest International Monetary Fund disbursement would also pave the way for Ukraine to receive a total of $1 billion in loan guarantees from the U.S. and 600 million euros (about $675 million) of aid from the European Union.
Ukrainian Finance Minister Oleksandr Danylyuk said the International Monetary Fund decision should clear the way for the sale of about $1 billion in US -guaranteed bonds by the end of September.
In Kiev, Ukrainian President Petro Poroshenko hailed the decision as evidence that “Ukraine is undergoing deep and positive changes and the country is moving in the right direction”.
The eastern European nation, battered by a two-year military conflict with Russian-backed separatists, is relying on global aid to replenish its foreign reserves and help sustain recovery from a recession. It envisages economic growth of 3 percent after this year’s projected 1 percent expansion.
While Christine Lagarde said that trade competition from “low-cost” countries like China has affected workers in Western economies, she believes that the solution is for policy-makers in these countries to increase minimum wages, offer comprehensive welfare packages, and to invest in education.
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“A sustainable recovery requires completing the structural transformation of the economy, where much remains to be done, including combating corruption and improving governance”, she said.
