The International Monetary Fund, or IMF, announced Thursday that it will unlock between $14 billion to $18 billion as financial assistance for Ukraine.
A delegation from the IMF, which was working in Kiev from March 4 to March 25, concluded that the IMF would release a significant chunk of the total aid earmarked by the international community for Ukraine, which has been in political and economic turmoil since protests flared last November against then-President Viktor Yanukovych's decision to rely on Russian aid instead of strengthening ties with the European Union.
“The financial support from the broader international community that the program will unlock amounts to US$27 billion over the next two years. Of this, assistance from the IMF will range between US$14-18 billion, with the precise amount to be determined once all bilateral and multilateral support is accounted for,” Nikolay Gueorguiev, the IMF mission chief for Ukraine, said in a statement.
According to the statement, Ukraine’s current account deficit is estimated at over 9 percent of its gross domestic product, or GDP, and the country has reached stagnation in terms of exports and growth. The IMF stated that the country’s fiscal deficit for 2013 was 4.5 percent of its GDP and an analysis of the Ukrainian government's sizable expenditure arrears proved Ukraine needed financial assistance.
“The authorities' economic reform program is rightly focused on addressing the key economic challenges faced by Ukraine. Its success in achieving these important objectives will be steadfast implementation, which will enable these efforts to be supported by the international community,” Gueorguiev said.
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Yanukovych, who was widely criticized in the international community for his profligate administration, was ousted in February and fled to Moscow, triggering reprisals from Russian President Vladimir Putin's administration, which included a rollback of promised aid, and Russia's annexation of the Crimean peninsula, which was until recently a part of Ukraine.
The IMF will also work with the World Bank, European Bank for Reconstruction and Development, and other international financial organizations to devise measures to solve governance issues and ensure a smooth transition in Ukraine, which is currently being led by an interim government.
“Reforms to strengthen governance, enhance transparency, and improve the business climate will be central elements of the program. Policy measures in these areas will include adoption of a new procurement law to close loopholes allowing evasion of a competitive procedure; measures to facilitate VAT refunds to businesses; and an independent quarterly audit of the Naftogaz’s (the state-owned gas company) accounts,” Gueorguiev said in the statement.