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6:44 AM Monday, July 23, 2018
Finance
Four Month Deadline for Reform?
London last year, Copenhagen this June. Will this year’s Ukraine Reform Conference trigger a spring season of EU-standard economic fixes?
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

KYIV – The June 27 Ukraine Reform Conference in Copenhagen creates a four-month deadline for Ukraine’s government to adopt free market changes needed to unleash more foreign aid and investment.

That is the view emerging after an IMF team left Kyiv last week and high level American and Danish diplomats visited here this week.

“The Danish government leads the way here, taking the baton from the UK which hosted a similar conference last July,” writes Timothy Ash, London-based senior sovereign strategist for emerging markets at BlueBay Asset Management. “It is possible to imagine by that date, that the international financial institutions might bundle together credits, all linked to key reforms such as the Anti-Corruption Court, in order to entice the Poroshenko administration over the line.”

Danish Foreign Minister made the political rounds of Kyiv, meeting here Prime Minister Groysman on Feb. 20. In addition to anti-corruption advice, he brought news of a five year, $80 million Danish aid program to help Ukraine build democratic institutions and sustainable economic growth. (UNIAN/Vladislav Musienko)

Reform Window is this Spring

With presidential elections one year from now, analysts and diplomats see Copenhagen as a catalyst for a spring season of political action in Kyiv, before the election season takes over. Dozens of Western foreign ministers are to gather for what is to be this year’s highest level international gathering on Ukraine.

“The conference can be a driver for change in Ukraine,” Denmark’s foreign minister Anders Samuelsen told the UBJ in an interview here. “It would be very, very good if there are deliverables before the conference – the anti corruption court. We hope to secure, to support the reform process in Ukraine.”

After meeting Prime Minister Groysman on Tuesday, Samuelsen said in a speech: “The conference is an opportunity for the Government of Ukraine to showcase its results.”

“Today, the Government has presented its plans for 2018 and now it is time to keep your eyes on the prize and deliver tangible and visible results,” he urged. “I strongly encourage the Government to use the time from now until Copenhagen as a driver for change – to pursue ambitious reforms in critical areas, such as anti-corruption and privatization.”

Washington Weigh in, in Kyiv

Separately, US Secretary of State John J. Sullivan spoke Wednesday about Ukraine’s need to take concrete steps this spring to get back on track with the IMF.

“An independent and successful Anti-Corruption Court is fundamental for Ukraine,” he said in a speech in Kyiv at the Foreign Affairs Diplomatic Academy. “But Ukraine must also stay on track with its IMF program. The signal a successful IMF program sends to the international community is that Ukraine is serious about reforms, serious about fighting corruption, serious about privatizing state owned enterprises, serious about energy reform.”

IMF: Ukraine Got only Half the Money

After an IMF team returned to Washington last weekend, the IMF resident representative in Ukraine Gösta Ljungman issued a statement Monday calling on authorities to “expeditiously” create an Anti-Corruption Court that meets standards agreed with the IMF. From the IMF program signed with Ukraine in 2015, only four credit tranches of a scheduled 12 have been released. Ukraine has received $8.7 billion, half of the potential $17.5 billion.

Samuelsen said that Ukrainian officials he met “are quite straightforward in facing the situation.”

“They realize that things are not moving as fast before,” said the Foreign Minister, who has been active in Danish center-right politics for 20 years. “They are looking to an upcoming election in 2019. They face populism.”

Corruption Scares off Danish SMEs

The Copenhagen conference also will present a chance for Danish investors to meet Ukrainian officials and business leaders and learn about opportunities here.

So far, Samuelsen said, corruption – real and perceived – scares off small and medium-sized Danish companies.

“Big Danish companies get involved in Ukraine,” he said, citing exports by Vestas, the wind turbine manufacturer. “The small, medium sized companies have trouble penetrating Ukraine. That is why fighting corruption is so important.”

Meanwhile, Ukraine’s Cabinet of Ministers released this week a 50-page booklet “Ukraine Reform Conference” outlining the government’s reform priorities for 2018.

https://www.kmu.gov.ua/storage/app/media/reform%20office/book-web-smallest-size.pdf

“A slick new presentation by the Ukrainian government on reform priorities,” writes Ash. “Guess this is all in preparation of the Danish donor conference looming in June….Message to the Poroshenko Administration - less slick presentations please. Get the ACC done. Get the IMF program back on track soon. No more excuses.”


For comments and story ideas, please contact UBJ Editor in Chief at laurenson.jack@theubj.com


Slider Photo: Danish Foreign Minister Anders Samuelsen meets President Poroshenko in Kyiv on Feb. 21. (UNIAN/Mikhail Palinchak)


Posted Feb. 22, 2018

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