World Economy

Ukraine Told to Reform, Root Out Corruption

Ukraine Told to Reform, Root Out CorruptionUkraine Told to Reform, Root Out Corruption

Washington stands ready to help Ukraine attract private US investment if Kiev acts to root out corruption, a senior US official said on Saturday, without pledging any more direct aid for the war-torn country.

“The US has a stake in helping Ukraine build a stable and prosperous country that benefits all of its citizens,” US Secretary of Commerce Penny Pritzker said after meeting Ukraine’s leaders. This could involve bringing private US investors to Ukraine to “showcase historic investment opportunities” in the former Soviet nation, she said, pointing to defense and energy as particularly important sectors.

Drawing parallels with the Marshall plan – a US aid initiative to help rebuild Europe after World War II – Pritzker said Ukraine must reform its economy if it is to overcome its “significant economic challenges”.

But she stopped short of pledging any massive US investment to rebuild Ukraine’s tattered economy, as Washington did to help Europe in 1947. The US has so far provided Kiev with $291 million in assistance and a $1 billion loan guarantee.

“These steps are going to be hard but they can change the future of your country,” she told reporters after meeting with Ukraine’s President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk. “(The Marshall plan) included adoption of a tremendous number of reforms in order for the economy to be more open and accessible for foreign direct investment, and that is precisely what we were discussing.”

  Concrete Steps

Kiev’s lawmakers in particular need to take “concrete steps” to combat graft, including passing legislation to create an anti-corruption bureau before October 26 elections.

Ukraine’s economy, already in recession since 2012, has collapsed as Kiev has struggled to end a five-month insurgency by pro-Moscow rebels in its eastern industrial heartland.

In April, the IMF approved a $17 billion line of credit to Ukraine, part of a $27 billion international rescue of the economy, but the first releases of funds have yet to stabilize its currency, the hryvnia. The IMF has said the anti-corruption law before November is a prerequisite for Ukraine for getting more money.

President Poroshenko recently travelled to Washington to ask for military assistance.