Ukraine’s Ministry of Finance explained the IMF's requirements
The Minister of Finance of Ukraine, Oleksandr Danylyuk, disclosed the details of the updated memorandum of the International Monetary Fund or IMF, UNIAN reports. The new memorandum contains provisions on pension, land, banking and other important reforms.
"In fact, we need to understand the main thing that the IMF wants; and what we want is a fair, balanced pension system," Danylyuk said.
He said that to achieve this goal it would be necessary to carry out pension reform that would balance the Pension Fund so that there would be no shortage. “Not immediately, of course, but it should be a certain period, a certain vector in order to get rid of the Pension Fund deficit, so that people can receive a stable pension and clearly understand that in the future the pension would be fair."
The memorandum also contains a provision on land reform. According to Danylyuk, there is no de jure land market in Ukraine. "In practice, it does exist; land is bought and sold but everything happens in accordance with gray, strange schemes," the Minister stated. He stressed that a functioning land market is important to the agricultural sector.
"This is our competitive advantage, the agricultural sector, but through the restrictions that we have established ourselves, we are not only making our citizens poorer but also artificially limiting the potential of the agricultural sector," the Finance Minister said.
The memorandum also refers to the reform of state-owned banks. "The state now owns 55% of the banking system. This is a very big share and we need to improve the work of these banks as soon as possible so that they do not distort competition. We also need to plan how to withdraw from these banks because it is obvious that the state cannot own 55% of the market; it hurts the development of the economy," Danylyuk summed up.
The IMF’s four-year program of financial assistance provides for $17.5 billion to Ukraine, out of which Kyiv has already received three tranches for a total of $7.7 billion.
Ukraine expected to receive the fourth tranche of $1 billion before the end of 2016 and fulfilled the key conditions necessary for this: the adoption of the state budget for 2017 and the nationalization of the country's largest bank, PrivatBank. However, the IMF Board of Directors meeting concerning the Ukrainian issue and the allocation of money continues to be postponed.