Photo by Giorgio Trovato on Unsplash

There has been a series of meetings between the Ukrainian delegation in Washington and the IMF. They have agreed on some issues, but still negotiations continue.

The Ukrainian government representatives and IMF representatives have had a serious meetings and agreed on a number of issues, Interfax-Ukraine reports. The issues they agree on are anti-corruption reform, corporate governance reform and the independence of NABU, the Nationa Anti-Corruption Bureau of Ukraine.

Still, some things remains to be sorted out: “The negotiations allowed to agree on the positions of both parties, in particular on anti-corruption reform, corporate governance reform and on the independence of NABU,” the Finance Ministry said on its website.

“However, IMF experts said the Constitutional Court’s ruling had led to a backsliding of anti-corruption efforts and required a response from the Ukrainian authorities. The sides agreed on close communication and joint work for the possibility of reaching the staff level agreement in the near future,” the ministry said.

Important for investors

The money from IMF is not only important for the state budget of Ukraine, that as all other countries have been suffering from the COVID 19 pandemic. It is also an important measure for foreign possible investors, who are evaluating business opportunities in Ukraine, Kristian Andersson, the head of the Swedish bank SEB in Ukraine, told Ukraine Nu earlier this year.

“Investors look at cooperation with IMF, and if that is working well, investors take some confidence in that,” Andersson said. At the time of that interview, the big question was whether or not Ukraine would maintain independence of the National Bank of Ukraine (NBU).

But overall, whatever the conflicts between Ukraine and the IMF are, the relationship is seen as a thermometer gauging the current state of Ukrainian reform work and cooperation with Western partners, which can be perceived as a measure of stability for future investments.

Long, rocky road

In June last year the IMF approved a new stand-by arrangement with Ukraine after a long hard battle, where the Ukrainian government headed by president Volodimir Zelensky was making two new reforms: A bank law, solidifying the work of the NBU and the privatization of PrivatBank, and a land reform, allowing the sales of farmland.

IMF immediately gave Ukraine a payment of 2.1 billion USD, the first tranche of what should be a total payment of 5 billion USD. Since then, no tranche has been paid out to Ukraine largely because of the resignation of former head of the NBU, who stated he had to leave his office due to political pressure from the president.

Solving these issues in cooperation with IMF would take Ukraine closer to a second tranche, and according to the ministry, the tranche should be a little closer now.