Ukraine Makes Double Breakthrough to Foreign Borrowing

The Board of Directors of the International Monetary Fund (IMF) has authorized a new $377 million loan installment to Ukraine. That very same day the World Bank issued the $250 million First Programmed Systems Loan aimed at supporting the medium-term economic development of Ukraine and the Ukrainian government’s reform program. The loan agreement was signed by Kostiantyn Hryshchenko, Ambassador Extraordinary and Plenipotentiary of Ukraine to the United States of America, and Luca Barbone, World Bank Country Director for Ukraine and Belarus. While $150 million will be disbursed to Ukraine immediately, the remaining $100 million is expected to be issued by the end of 2001, dependent on the progress of institutional reforms.

Interfax-Ukraine quotes IMF First Deputy Executive Director Anne Krueger as saying that Ukraine has achieved striking economic results in 2001. The fund called on Ukraine to speed up structural reforms, restructure its largest banks, liberalize the agrarian sector, and make the performance and privatization of the leading industries more transparent. After receiving the new installment, Ukraine will have used a total $1.59 billion of IMF loans.

The World Bank management has also noted improvements in Ukraine’s socioeconomic sphere over the past few months. According to Mr. Barbone, Ukraine has many things to do, but crucial achievements, such as timely payments in the energy sectors, transparency in governmental activity and privatization, as well as the payment of public-sector wage arrears, are self-evident. Chief of the World Bank Country Office in Ukraine, Gregory Jedrzejczak, especially noted the support for the program of economic reforms on the part of the Anatoly Kinakh government and the role of the National Bank in making a very difficult decision on the Ukraina bank. “This signals the beginning of a new political culture in Ukraine, when professionalism and good of the cause come before politics,” he emphasized.