“Ukraine highly appreciates open and sincere
relations established between our country and the World Bank,” Minister of
Economics of Ukraine Bohdan Danylyshyn stressed.
Over the
time of Ukraine’s independence its cooperation with
the World Bank facilitates to further economic growth and financial
stabilization, stirring up market transformations, integration into the EU as
well as provides an opportunity to take into account the world experience in
introduction of measures for advancement of economic development.
Over this
period the Bank proposed to Ukraine resources to the tune of over USD
5.56 bn which consists around 36.4% from the general
sum of IFO financial resources over this timeline.
“On
conditions of broadening of the global financial crunch Ukraine is interested in obtaining the
significant financial resources from international financial organizations to
soften negative fallout of the crisis on economic and social development of our
country,” the head of economic department stressed.
Bohdan
Danylyshyn views under this situation the resources of the World Bank still
remain the most competitive at the value of resources for Ukraine as compared to international
capital markets.
On November
5, 2008 the
Council of Directors of International Monetary Fund approved an annual Stand-by
(SBA) program to the amount of around USD 16.4 bn
targeting assistance to Ukraine to support its financial and economic
stability.
The
Economics Minister is convinced that introducing of the blueprint would
facilitate to macroeconomic stability, lowering of inflation level,
stabilization of the national system under conditions of the global crunch,
trust on financial markets and structure reconstruction in the economy on
conditions of worsening of foreign economic conjuncture.
The
instrument will be directed to:
- solving
of problems in financial sector by means of: 1) support of liquidity and
broadening of guarantees in deposits; 2) strengthening of capacity of the banking
system including the state funds; 3) regulating of an issue of debts of
households and entrepreneurs’ sector;
- lessening of influence of external shocks and reducing of level inflation
by pursuing a respective macroeconomic line.
The
Economics Minister also emphasized readiness of the World Bank to operatively
response and solve issues of providing resource
support to Ukraine to correspond with our topmost
needs of the development. In this context Bohdan Danylyshyn is grateful for the
possibility to receive the backing on the side of the World Bank through
applying a mechanism of a new system loan – the Third loan for the development
policy.
So, on November 25, 2008 negotiations between the delegation of Ukraine with representatives of the World
Bank have been successful which resulted into initialing of the text of
Agreement on loan between Ukraine and IBRD concerning the project
“The Third loan for the development policy”. Moreover, the Protocol and Letter
of the Government of Ukraine to the World Bank concerning the development
policy which would enable for the World Bank on December 23 of the current year
to forward for consideration by the Council of Directors of the Bank this
credit, which in its turn would enable signing of an Agreement on loan and
receiving till the end of the year these funds to the tune of USD 500 mn for support of the state budget of Ukraine as well as
carrying out structure and institution reforms.
According
to Bohdan Danylyshyn, deepening of cooperation with the World Bank appears
pressing not only to overcome the global financial crisis but to solve issues
to ensure eliminating of restrictions for the development.
“Ukraine is
concerned in obtaining the financial support of the World Bank for realization
of infrastructure projects, primarily in those directions where Ukraine bears
highest needs while the experience of cooperation appears the most successful:
these are introducing of projects in the areas of state municipal and transport
infrastructure, energy sectors and energy saving,” the Minister emphasized.
The year of
2008 has become a turning point for optimization of the structure of the World
Bank portfolio in Ukraine, its reorientation for the support
of real economics sector and development of infrastructure, also improvement of
the state of project portfolio occurred. So, on the outcomes of 2008 financial
year (01.07.2007 – 30.06.2008) Ukraine has demonstrated the best over all the
years of collaboration with IBRD showing of applying the funds along the
investment projects which totaled 13%.
In 2008 the
portfolio of IBRD projects on all stages of the project cycle (initiating,
preparing and realizing) has reached almost USD 3.5 bn.
So, 9 investment projects were in active phase of realization, the sum of IBRD
loans amounts USD 817.517 mn, as well as 1 system
project “The Second loan for the development policy”.
September-October
of the current year the laws on ratification of agreements into three
investment projects under the IBRD support were approved, which gives an opportunity
to launch realization of 2 infrastructure and 1 institutional projects to the
general sum of USD 390 mn (agreements into the
projects are being taken into effect):
- Project
on modernization of state finances;
- Project
on municipal infrastructure;
- Project
on power energy transfer.
Furthermore,
initiating and preparing of 4 investment projects of infrastructure development
which would enable attracting additional resources in the sphere of energy and
transport to the general sum of around USD 1.4 bn is
being conducted.
So, Ukraine counts on holding negotiations with
the Bank and approval by the Council of Directors of the World Bank by June
30, 2009 of
the following projects:
1) Improvement of motor roads and
safety of roads;
2) Rehabilitation of hydroelectric
power stations;
3) Rehabilitation and development of the
system of electric supply of Kyiv;
4) Raising of carrying capacity of Znamyanka-Dzhankoy railway line.
Bohdan
Danylyshyn considers that joint acquisitions with the World Bank can be
noticeably significant and that Ukraine is interested in obtaining
financial support of the World Bank for realization of infrastructure projects
in maximal amounts according to the Cooperation Strategy of the World Bank with
Ukraine for 2008-2011.
“We possess every reason to rely on deepening
of cooperation with the World Bank and other financial organizations,” the
Economics Minister of Ukraine is convinced.
With this
objective an optimal mechanism for fast and effective applying of IFO resources
to finance priority objects of social and economic development has been
elaborated.
So, on October
17, 2008
the Government of Ukraine approved a new ordinance of the Cabinet of Ministers
of Ukraine “On order of initiating, preparing and realizing of projects of
economic and social development of Ukraine supported by international
financial organizations”. This instrument envisages a series of changes
introduction of which will enable to significantly stir up the process of
initiating, preparing and putting in force agreements on loan as well as will
ensure timely applying of funds on the stage of realization of joint with the
international financial organizations projects. In particular, it will enable
to synchronize the cycle of initiating and preparing of project with the budget
cycle which will afford to manage in 12-days of preparation in average which
exists in practice.
“Putting in
force of this ordinance respond to urgent needs of international financial
organizations and Ukraine to ensure effective attracting and
use of investment resources for the development and will give impetus to the
development of fruitful cooperation between Ukraine and the World Bank,” Bohdan
Danylyshyn believes.
In the
context of the development and deepening of bilateral cooperation Ukraine proposes to consider the
possibility to provide financial support form the side of the bank in the
following priority directions:
- Energy
and energy saving: Project of rehabilitation of thermoelectric power station
and Project in electric energy transition 2 phase.
- Development
of transport infrastructure: improvement of transport exploitation state of
motor roads along the directions Kyiv-Chernihiv-Novi Yarylovychy; Kipti-Glukhiv-Bachivsk;
Kyiv-Kharkiv-Dovzhansky; Kyiv-Luhansk-Izvaryne;
Kyiv-Chop; Kyiv-Kovel-Yagodyn; Kharkiv-Shcherbakivka; building and overhaul of roads in the
directions: Kharkiv-Krasnograd-Pereshchepyne-Novomoskovsk;
Dniporpetrovsk-Tzarychanka-Kobelyaky-Reshetylivka;
building and improvement of transport exploitation state of motor roads
connecting check-points via teh state border with
cities of Ukraine which are planned to host the finals of Euro-2012 Football Championship.
- Municipal
development: ensuring of improvement of functioning and development of
infrastructure of Northern Crimean canal as a strategic priority in the sphere
of water supply of Autonomous Crimean Republic; Project of the development of
municipal infrastructure (2 phase) of improvement of heat supply of the cities.
“Ukraine has been and still remains one of
the states in Europe which is characterized with
stability in pursuing foreign and internal policy. At the same time successful
solving of problems of reforming of economics calls for support from the side
of international financial organizations and in this aspect development of
collaboration with the World Bank proves of great significance for Ukraine,” Bohdan Danylyshyn summed up.
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