Magic in the air: the IMF reports on staff-level agreement with Ukraine

UKRAINE - In Brief 08 Dec 2019 by Dmytro Boyarchuk

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An unexpectedly excellent piece of news came yesterday from Ms. Kristalina Georgieva, the Managing Director of the IMF. The decision was apparently made after a telephone call with President Zelenskiy. Volodymyr Zelenskiy, most likely, told the Managing Director something what the IMF mission did not hear when visiting Kyiv few weeks ago. Relations with the oligarch Igor Kolomoyskiy were the focus of this talk, I believe. For local observers it was already clear that Kolomoyskiy is playing his own game, bargaining with the authorities for something. But Zelenskiy and his team failed to communicate this against the backdrop of the aggressive media interventions of the oligarch. As we see, they decided to make this communication in a simpler way and just called the top IMF official. With this move Zelenskiy killed two birds with one stone: he demonstrated his independence from the oligarch and still avoided the scandal of publicly offending his former (or even current) ally. The new Extended Fund Facility program is in line with expectations, small and short (about US$ 5.5 billion for three years). But the Ukrainian economy is in good shape and does not need extra funding. Very likely this program will be the last one for the current cycle. The list of prior actions is expected to be a standard one: strengthening the rule of law, enhancing the integrity of the judiciary, cleaning up the banking system. And for sure, "reducing the role of vested interests in the economy", i.e. more proof that Kolomoyskiy indeed is beyond the decision-making process in the country. I bet that chances for successful implementation of the program are quite high amid the strong macro and the ...