President Volodymyr Zelensky declares Ukraine has fulled all International Monetary Fund requirements for more loans.
What kind of a statement is this? Zelensky saying that things must be right because he says them does not make them right.
If Ukraine had met the terms of the IMF program then a mission would have been and gone, the latest tranche would have been disbursed and the money would be in the bank. As is it is hard to see any IMF money this year, and most likely there won’t be any disbursements until the second quarter of 2021.
This is head in the sand stuff, meant for electioneering ahead of the Oct. 25 vote for local governments.
It’s better to figure out why the IMF is unhappy. They clearly are on multiple fronts and try and address their concerns. And I would guess their concerns are:
National Bank of Ukraine independence
How can anyone question the concern around NBU independence after four of six NBU board members are forced out of office, the remaining two former deputies are lambasted by the NBU council and one responsible for critical banking regulation and supervision is demoted? And that is a person who has been hailed as leading a pretty successful banking cleanup operation. Message to Earth: in 2015 the banking sector was bankrupt, and a huge contingent liability on the state. Now it is profitable and not a huge contingent liability on the state. How did that happen? Because of the hard work of people like Kateryna Rozhkova.
Corporate governance
Maybe ask some of the independent supervisory board members what the issues/concerns are. If not read the op-ed by Anders Aslund in the Kyiv Post a few weeks back.
Anti-corruption agenda
The anti-corruption agenda, with all the backtracking around the appointment process for anti-corruption agency staff, changes at the Prosecutor General’s Office, the fact that no one who seems to have “form” seems to get indicted/prosecuted, and yet it seems to be NBU reformers who seem to feel the full force of the law.
Meanwhile, another head of the customs authority is appointed today – four in a year. How can anyone be expected to do a proper job in such an important position in a matter of months? The high turnover is killing institutional strength/knowledge, and leaving these institutions less capable and more vulnerable to state capture and graft.
My advice
Stop doing stupid things like:
* Forcing out four of six reformist NBU members for no credible reason;
* Introducing the Hr 47,000 ($1,660) monthly salary cap on public sector salaries which has had the effect of forcing out capable technocrats from key public sector positions, and undermining the whole corporate governance agenda;
* reshuffling the cabinet for no apparent real reason – why three finance ministers in a year? Hire the right person first and back them;
* stop arresting/charging reformers on trumped-up charges. There are plenty of oligarchs and their minions who have done plenty of dodgy things over the years and surely you can find something on them. If not read some of the UK/US legal documents to give you a clue.
