IMF program
The IMF board finally approved the $17.5 billion four-year loan under the Extended Fund Facility, of which Ukraine’s $5 billion will come front-loaded.
The bailout loan is “based on a comprehensive economic reform program supported by the fund as well as by additional resources from the international community,” said to the IMF managing director Christine Lagarde on March 11 in Washington D.C.
“This new four-year extended arrangement will support immediate economic stabilization in Ukraine and a set of deep and wide-ranging policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people,” said Lagarde.
“The Ukrainian authorities continue to demonstrate a strong commitment to reform. They have maintained fiscal discipline in very difficult conditions; allowed the exchange rate to adjust; and have increased retail end-user prices for gas,” she added. “Many key measures are front-loaded under the new program — including further sizable energy tariff increases; bank restructuring; governance reforms of state-owned enterprises; and legal changes aimed at combating corruption and strengthening the rule of law.”
“The program is ambitious and involves risks, notably those stemming from the conflict in the east of the country,” IMF head concluded.
Ukraine’s economy fell by 6.9 percent in 2014, while this year 5.5 percent contraction is expected. Prime Minister Arseniy Yatsenyuk hopes the country will return to economic growth next year.
Public debt reaches almost $70 billion as of now, the size of the projected gross domestic product, according to the state budget for 2015. Inflation in February was at 34.5 percent which pushed the National Bank to raise the key rate up to 30 percent.
New government appointments
Finance Ministry, headed by the U.S.-born former private equity fund manager Natalie Jaresko, prepares to see the new faces, some of them will come from the business community.
Olena Makeyeva of Aksyonov & Partners audit firm will be taking care of the revenue collecting, according to Interfax Ukraine’s sources. She holds a degree from the Kyiv Vadym Getman Economics University and was a contributor to Forbes Ukraine, a business monthly.
Former deputy economy minister Roman Kachur will be dealing with social issues, while Artem Shevalyov of the European Bank for Reconstruction and Development will head the European integration and financial policy department.
Oksana Markarova, head of ITT investment group, will manage the Finance Ministry’s staff.
Meanwhile, Vitaliy Vavryshchuk, who led the research at SP Advisors investment company, got appointed to the position of financial stability department head at the National Bank of Ukraine. He is a graduate of Kyiv Mohyla Academy and Kyiv School of Economics.
U.S. approves not-lethal aid supplies to Ukraine
The Administration of the U.S. President Barack Obama stated March 11 that it will provide $75 million in non-lethal aid to Ukraine’s military in addition to the $118 million and $120 million aid packages announced earlier.
The aid will include radios, first-aid kits, surveillance drones, counter-mortar radar systems, military ambulances, 30 armored Humvees and 300 unarmored ones.
However, the U.S. government has so far dragged its feet on supplying lethal weapons to Ukraine despite repeated calls by both Republican and Democrat lawmakers.
Further sanctions against pro-Russian figures
The U.S. also imposed further sanctions on people blamed for fomenting Russia’s war against Ukraine, though they are modest and do not apply to any major Russian companies or officials.
Specifically, the sanctions target former Ukrainian Prime Minister Mykola Azarov, former Deputy Prime Minister Serhiy Arbuzov and former Healthcare Minister Raisa Bogatyryova.
The list also includes Russian-backed insurgent leaders Roman Lyagin, Yury Ivakin, Alexandr Karaman, Alexandr Khodakovskiy, Sergei Zdrilyuk and Yekaterina Gubareva, as well as Crimean officials Sergei Abisov and Oleg Kozyura.
The sanctions also affect Russia’s pro-Kremlin Eurasian Youth Alliance and three of its leaders, including Alexander Dugin, who has repeatedly called for killing Ukrainians.
Another entity affected by the sanctions is Crimea’s Russian National Commercial Bank.
Kyiv Post staff writer Oleg Sukhov can be reached at [email protected]. Kyiv Post associate business editor Ivan Verstyuk can be reached at [email protected].
