The International Monetary Fund (IMF) will not give Ukraine the next EFF installment scheduled for the end of March, IMF European second department director John Odling-Smee said after three-day negotiations with the Ukrainian authorities.
“I cannot name a specific date. It is so far doubtful that we will give it at the end of March,” he told Kyiv journalists last Wednesday after his mission completed its work, applying the word “theoretical” to the IMF Board of Governors’ possible decision to extend funds to Ukraine later in March. The IMF is dissatisfied with the situation in the natural gas sector, the restructuring of the largest banks, the inadequate transparency of privatization, and the intention to write off industrial tax arrears, Ukrayinski novyny reports.
According to the IMF officer, for the IMF Board of Governors to clear the next EFF installment, Ukraine must fulfill such conditions as raising the level of payments in the energy sector, which dropped in December 2000 and January 2001, solving the problem of the relationship between Naftohaz Ukrayiny and the government, as well as cutting the export duty on sunflower seeds from 23% to 10%, Interfax-Ukraine reports.
The IMF considers that Ukraine should further pursue and activate its reform policy, Mr. Odling-Smee said, speaking at Kiev-Mohyla Academy National University. The IMF officer accused the new nomenklatura, which uses the state to preserve its monopoly on some markets, of slowing down the development of Ukraine, especially of its private sector. Among the measures to combat this phenomenon, Mr. Odling-Smee mentioned the transparency of official decision-making, deregulation, development of the legal services market, and the adoption of international standards, also through Ukraine’s membership in the World Trade Organization and further development of contacts with the European Union.
People’s Deputy Viktor Suslov (Yabluko fraction) told The Day that the probable non-extension of the new loan installment to Ukraine will be interpreted by international investors as a negative signal and could have quite grave consequences for this country and the Yushchenko government. One of the reasons why Mr. Suslov allows such a possibility is that the newspaper 2000 published, on the eve of the fund mission’s visit to Ukraine, the printout of a telephone conversation Mr. Odling-Smee allegedly had with Price Waterhouse Coopers about how to make public the results of the National Bank audit. The people’s deputy wondered what it means when an independent auditor consults the IMF about what information to publish or hold back and how to do it. Although the IMF has not yet officially commented on this, its representatives, according to Mr. Suslov, have already familiarized themselves with the newspaper article.
