Ukraine Needs Financial Support in Much Larger Volumes
OREANDA-NEWS. January 23, 2015. Taking into account the difficult financial situation in Ukraine, it is crucial to increase the financial support of the state.
This was stated by Senior Fellow of the Peterson Institute for International Economics, Anders Aslund on January 20, at a briefing in the Club of the Cabinet of Ministers of Ukraine on the outcomes of meetings with the Prime Minister of Ukraine, Ministers, heads of a number of departments, leading Ukrainian politicians and members of the Parliament regarding implementation of reforms in the country.
In the event were also participating Minister of Economic Development and Trade of Ukraine Aivaras Abromavicius, who was a coordinator of the visit of foreign experts; Professor of Economics at Yale University Basil Kalymon; a politician, expert economist, Deputy Prime Minister of Slovakia in 2010-2012 Ivan Miklos; a Lithuanian politician, Prime Minister of Lithuania in 1999-2000 and 2008-2012 Andrius Kubilius.
"Ukraine needs significant financial support in much larger volumes than those being discussed," Anders Aslund stressed and added to get serious international financial support, Ukraine would have to carry fiscal consolidation.
He noted that the International Monetary Fund considers necessary to provide Ukraine with financial assistance for 15 months and worth about USD 27 billion. If you add up the funds granted by the IMF, the EU, international financial institutions, said Anders Aslund, it makes up over USD 20 billion. "Hence, the difference still needs to be covered," he explained.
Besides, during the briefing the expert noted that the Ukrainian Government had gathered a powerful team of professionals who are well aware how to reform and lead the country out of the crisis, "Our first impression is that the quality of officials in Ukraine has completely changed. What we have seen today is high-level professionals who meet all European standards. I have been working with the Ukrainian economy for 30 years and have never seen such quality members of the Government as it is today".
He accentuated that Ukraine faces a difficult financial situation, however, the Government is actively working to find a solution, "Yes, there is the crisis, but huge positive changes are carried out and I hope that Ukraine will recover after the crisis".
Anders Aslund told that during the meetings foreign experts focused on the need for a series of reforms in the country, which primarily relate to fiscal sustainability and combating corruption.
"I would particularly emphasize fiscal consolidation. It is perfect that there were cancelled certain subsidies. However, Ukraine should unify gas prices to harmonize with market levels during the quarter. It should improve the balance of payments, reduce dependence on Russia, will lead to energy savings and boost production," the expert stressed. Another important issue, according to him, is focus on improving the management of state-owned enterprises.
"In order to fight corruption, you should move forward fast in deregulation issues. I agree, something has already been done, but you need more", added Anders Aslund.
A Lithuanian politician, Prime Minister of Lithuania in 1999-2000 and 2008-2012 Andrius Kubilius also highlighted the high professionalism of the current Ukrainian Government.
"This is a great team that has a good reform program, and they showed they are ready for reforms. Of course, there are serious challenges, but this Government has demonstrated they have the political will to implement all the needed reforms," he stressed and added to ensure reform implementation the political consolidation proves necessary.
In turn, a polician, expert economist, Deputy Prime Minister of Slovakia in 2010-2012 Ivan Miklos noted that the success of qualitative transformations within the country depends on the correct political reform management, "The challenge is in the plane of the political reform management. In this context it is vital the cooperation between the Government and the Parliament. The Government should step up their communication both with people and with the Parliament and its factions. However, the MPs should also feel and respect the responsibility of the Government and to support its program”.
The experts stressed that day during the meetings the officials and parliamentarians clearly demonstrated the intention to cooperate closely to ensure speedy implementation of reforms.
To sum up, Professor of Economics at Yale University Basil Kalymon said that during recent meetings the foreign experts saw "a serious understanding of the depth of issues and problems", "During the meetings we have heard positive signals that the Government comprises a good team of professionals who understand how to achieve progress and necessary changes."
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