By as early as March 2017 Ukraine must establish anti-corruption courts, raise the pension age and contribution requirements, reduce the number of civil servants, and lift the moratorium on the sale of land to continue its partnership with the International Monetary Fund.
These were the main requirements set out by the IMF in their latest memorandum with Ukraine, a leaked copy of which was obtained by Ekonomichna Pravda on Jan. 16.
According to the document, by the end of January the IMF is also expecting Ukraine to contract a foreign company to carry out a forensic audit of recently nationalized Privatbank and by June, for foreign auditors to verify the value of loans to parties related to the bank’s former owners.
This January the IMF also expects to see Ukraine’s Cabinet of Ministers monetize utility subsidies at the level of utility companies.
Ukrainian President Petro Poroshenko told Bloomberg during his visit to Davos on Jan. 17 that he was sure that a meeting with the IMF would take place in the coming weeks and that Ukraine will get the next tranche.
In September, Ukraine received a third tranche of $1 billion. In total, it has received $7.7 billion of the $17.5 billion loan agreed in March 2015. It has also received loans from the European Union and debt-relief through restructuring agreed with its bondholders.
The head of the National Bank of Ukraine, Valeria Gontareva, said on Nov. 24 that Ukraine hopes to receive $5.4 billion from the IMF in 2017, in four tranches.
The latest memorandum also stipulated that Ukraine must continue to close banks that fail to meet minimum capital requirements, continue its introduction of interim mechanisms to adjust gas and heating tariffs, reduce energy consumption, and continue to enforce the filing of e-declarations by officials.
Gerry Rice, the director of communications at the IMF, told journalists at a general press briefing on Jan. 12 that the fund considered the 2017 budget adopted by Ukraine’s parliament to be “consistent with program targets,” and that the fund saw “good progress” being made on the polices needed to complete the third review under the IMF arrangement.
Rice also praised the introduction of e-declarations for officials.
He also said that to pass the third review, Ukraine needs to “lock in the gains made in the energy sector reforms” and to finalize the memorandum on policies regarding the “timing of upcoming measures.”
