Ukrainian President Viktor Yuschenko has accused the International Monetary Fund (IMF) of being too lenient on the government led by Prime Minister Yulia Tymoshenko, according to an article published in the British international business newspaper the Financial Times on Thursday, September 17.
According to the newspaper, the Ukrainian president has repeatedly accused Tymoshenko’s government of pushing populist policies, citing its failure to raise natural gas prices for households to market levels and an unrealistic budget this and next year.
“Neither the World Bank nor the IMF did the work that had been foreseen … to shift the government towards reforms,” the newspaper quoted Yuschenko as saying.
Tymoshenko, in turn, accused Yuschenko of trying to sabotage her presidential bid and her efforts to pull the country out of recession.
The president’s comments were made as the IMF mulls granting Ukraine a fourth tranche this autumn from a $16.4 billion stand-by loan approved last autumn.
The newspaper reported that the IMF had remained tight-lipped on Kyiv’s political mayhem and had refused to confirm or deny widespread accusations by politicians and investigative news reports that suggest some of its aid to Ukraine has been misappropriated. It also said that “a fourth tranche is seen as vital to keeping Ukraine afloat in the near term.”
“In view of the upcoming elections, it is clear that on all major issues the ‘noise’ from politicians will increase,” the Financial Times quoted Peter Vanhecke, head of Renaissance Capital in Ukraine, as saying.
“However, I expect the IMF position will remain consistent and that it will stick to its conditions while showing a rational dose of flexibility, especially now that the Ukrainian economy is showing signs of recovery,” he said.
As reported, Ukraine’s Presidential Secretariat predicted earlier that the country would face difficulties winning the disbursal of the next tranche of the IMF’s loan to Ukraine.
“My talks with the [IMF] mission chief allow me to conclude that they are greatly disappointed at the way Ukraine is acting, as the country is not only failing to comply with the obligations it had undertaken, but is misinforming [the fund] about their implementation,” said the secretariat’s first deputy head, Oleksandr Shlapak.
Yuschenko previously said that the continuation of Ukraine’s cooperation with the IMF could be jeopardized, as the Ukrainian government had not implemented five of the six conditions of the Stand-By Arrangement (SBA).
Ukraine has already received $10.5 billion under the SBA with the IMF, and another $6 billion has yet to be allocated, including the $3.8 billion that is to be transferred to Ukraine by the end of this year.
IMF experts led by IMF Mission Chief in Ukraine Ceyla Pazarbasioglu arrived in Ukraine last week to draft and analyze Ukraine’s state budget for 2010. Their visit should have served as preparations for the IMF mission’s arrival in the country late in October in order to hold talks on the completion of the third review of the SBA and the possible allocation of the next tranche of the fund’s loan.
The next IMF mission is expected to visit Ukraine in October this year.
