Ukraine has a long history of cooperation with the World Bank. Today the WB sees its mission in helping Ukraine enhance its competitiveness and efficiency in utilizing resources. The WB is also carrying out a number of projects to prepare Ukraine for Euro-2012 and is actively involved in Ukraine’s cultural projects. In particular, this influential international organization was The Day’s partner in the photo exhibits our newspaper held in 2008 and 2009.
Martin Raiser, World Bank Director for Ukraine, Belarus and Moldova, has given an interview to The Day in which he assesses the efforts the Ukrainian government is making to overcome the consequences of the global crisis and the ways in which it has been using the money provided by international financial organizations.
How can you evaluate the use of credits already given to Ukraine? How can you estimate our government’s actions to overcome the crisis?
“This crisis has been very serious. There are now some encouraging signs around the globe that a recovery is under way. But risks remain, globally and in particular in Ukraine. Given the impact the crisis has had, I think we can say that the worst has been avoided. The financial sector has stabilized, although it faces continuous challenges to restore its capital and lay the foundations for a return to positive credit growth. The government took early and decisive actions here and the IMF, EBRD, IFC, the World Bank, and other bilateral donors have contributed with financing and advice. The exchange rate has been relatively stable after the initial adjustment and the current account deficit has been almost eliminated. Again, I think IMF support has been important in this achievement. However, there are also areas in which we would have liked to see more progress. Fiscal policy has not adjusted, and while this is understandable in the face of crisis, there are growing concerns about the sustainability of the government’s financial position. Action is needed urgently, and it is disappointing that electoral politics have prevented Ukraine from taking measures that most experts agree are needed. By the way, this need not place a heavy burden on the poor – we have made specific proposals how social assistance could be better targeted. We are advocating fiscal measures that would reduce privileges and transfers to those with above average incomes. This is both fair and fiscally necessary.”
The World Bank supports infrastructural reforms in Ukraine more and more often. What positive changes in this direction can you name?
“We have a growing portfolio and pipeline of infrastructure projects in the energy, municipal and transport sectors. In the last two years, our total commitments in this area have increased by USD 900 million. The most recently approved project, the Road Safety Improvement Project, will rehabilitate the road from Kyiv to Kharkiv and help improve road safety throughout Ukraine. We hope that ground can be broken on this project with the start of the construction season in 2010, creating some estimated 8,000 jobs over a three-year period.
“We are also seeing some good progress in the implementation of our USD 140 million Urban Infrastructure project, helping municipalities and vodokanals throughout the country save energy and improve service quality. And we recently approved USD 60 million in Additional Financing for the Hydropower Rehabilitation Project, which since 1996 has been working on a multi-phase rehabilitation program of the Dnipro cascade – a unique structure, helping Ukraine to produce cheap, clean, and highly valuable hydropower, accounting for some four percent of total domestic power consumption. We have important future plans to support railway reform and modernization, energy efficiency in the private and municipal sector, and the modernization of the gas transmission system.
“But, let me be honest, not all is well in our infrastructure portfolio. Ukraine takes longer than most other countries to implement infrastructure projects and thus the benefits are received later. If we could move faster, the impact of our support for infrastructure investments in Ukraine would be substantially higher.”
The World Bank has recently hosted The Day’s photo exhibit, and the best photographs have been selected. Which photo did you like the most? Which one did you cast your vote for?
“There were many that I really liked. I asked my colleagues to choose some photos that relate to how Ukrainians are coping with the crisis. There were two photos I remember very well. One shows a young couple, just married, laughing and sitting on the street behind a steering wheel but with no car. I think this photo says a lot about the sense of humor that I have found in many Ukrainians, their aspirations for a better life, which have been dented by the crisis, but also the hope and the energy of the new generation, which has every chance to achieve its dreams. Another one shows workers laying railway tracks that fork out in two different directions. This for me symbolizes the potential that infrastructure investments have for fiscal stimulus. But it also symbolizes the perception that maybe Ukraine stands at the crossroads. I hope the track that the country follows after the elections will be one of deepened reform, less corruption, responsible macroeconomic management, and continued integration into the world economy.”
Do you plan to continue the cooperation with The Day and host photo exhibits also in the coming years?
“I am pleased with our cooperation with The Day. The photo exhibit is a rich source of vignettes on the lives of Ukrainians through the years, and I hope it continues.”
