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| Ukraine's economy has received a new 'lifebuoy' from the IMF, to support the country's economic and financial reforms over the next five years. (Source: Zuma Press) |
The fund's launch ceremony was held in the capital Kiev.
The IMF aims to raise $65 million from countries contributing to the fund. The Netherlands, Slovakia, Latvia, Japan and Lithuania have contributed a total of $16.5 million.
The IMF plans to mobilize an initial $27.5 million to support key areas of Ukraine’s reform agenda. These key areas include fiscal reform (funding, public financial management, and expenditure policies); monetary policy; financial policies; anti-corruption policies; data collection and dissemination; and training and technical assistance in the macroeconomic framework.
Regarding Ukraine’s reform efforts to meet the demands of its partners, Deputy Minister of Economy Oleksiy Sobolev recently said that Kiev is working to reform business regulations to eliminate and update hundreds of new regulations to support businesses and boost the economy devastated by military conflict. The reform began last year, aiming to review about 1,300 existing regulations and licenses.
Accordingly, about 100 regulations have been canceled, Mr. Oleksiy Sobolev added, 400 more procedures will continue to be eliminated this year, while 500 new procedures will be updated and digitized.
Assessing the future of the Ukrainian economy, IMF Managing Director Kristalina Georgieva expressed confidence in the continued recovery, but acknowledged that the military conflict could bring unpredictable headwinds. "It is important that external financing on concessional terms is maintained in a timely and predictable manner," the IMF chief said.
However, many analysts predict that Western aid to Kiev could begin to decline this year.
The administration of US President Joe Biden also recently appreciated Ukraine's progress in fighting corruption and reforming the economy, urging Congress to approve a $61 billion military and economic aid package for Ukraine.
Late on February 13, the US Senate also passed a $95 billion aid bill for Ukraine, Israel, and Taiwan (China). However, this bill has not been able to pass the Republican-controlled House of Representatives. The latest information is that the Republican leader in the US House of Representatives has rejected the aid package for Ukraine, despite President Joe Biden's call.
Speaking to reporters, House Speaker Mike Johnson said he did not intend to allow a vote on the $95 billion spending bill, which largely includes aid to Ukraine. Johnson said the bill could not be approved without new measures to curb illegal immigration into the United States through the southern border.
Russia’s extraordinary military campaign in Ukraine has hit the Ukrainian economy hard, forcing millions to flee the country, bombing cities and infrastructure, and disrupting logistics, supply chains and exports. The economy is set to shrink by about a third by 2022, the biggest annual decline in Ukraine’s 30 years of independence.
Also on February 13, the United Nations Educational, Scientific and Cultural Organization (UNESCO) assessed that the conflict in Ukraine has caused about 3.5 billion USD in damage to the country's heritage and culture.
UNESCO used satellite imagery to assess the extent of the damage, with some 5,000 sites destroyed, including more than 340 museums, monuments, libraries and religious sites. Two UNESCO World Heritage sites, the medieval centres of Lvov and Odessa, were among those hit hard by the military attacks.
UNESCO estimates that Ukraine’s culture, tourism and entertainment sectors have lost a total of $19 billion in revenue since Russia launched its military campaign. Last year, the Paris-based organization estimated losses at nearly $2.6 billion.
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