Parliament approves procurements law - another step to the IMF funds

UKRAINE - In Brief 11 Apr 2014 by Dmytro Boyarchuk

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Yesterday parliament finally approved updated law on public procurements. The legislation significantly tightens rules for spending public funds, introduces more transparency not only for budget but also for state enterprises. Effectively, the law closes all major loopholes for budget funds squeezing. It was approved with minimum needed 226 votes but it was adopted totally. The approval of the law is not only a great step forward with budget transparency but also a step towards the IMF funding. The Cabinet and the Fund do not disclose details of their talks but it is clear that the Fund is waiting for some homework to be done by Ukrainian authorities. Since the IMF agreement opens abundant budget funding for Ukraine on various programs (from macro-support to infrastructure projects), we believe transparent procurements might be among the key pre-conditions for the loan. Does it mean that the way for cooperation is clear? We hope so. But in light of two failed IMF programs over the last five years in Ukraine it is very likely the Fund will be extremely cautious this time and we do not rule out some extra conditions to be demanded before wire arrives. For instance, the IMF might be waiting also to see gas tariffs increase in May. In any case, we remain positive about this cooperation since the Cabinet does not have any other way out but to comply with everything what is requested.