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IMF calls for Ukraine investment management reform to prepare for rebuilding as war 'tapers off'

Photo by Jay Ee / Unsplash

Ukraine must focus on governance, the fight against corruption and improving public investment management to prepare for a reconstruction boom after the war with Russia ends, the IMF said after a week of consultations with Ukrainian officials.

"Ukraine has major upside potential once the war tapers off, depending on policy and reform choices and the availability of financing," the IMF said. "Well-managed post-war reconstruction coupled with decisive reforms ... could stimulate the return of migrants and investment flows needed to set the economy on a sustainably stronger growth footing."

The IMF team, which met in Warsaw with the Ukrainian central bank and other officials over the past week, applauded recent reforms such as Ukraine's adoption in September of legislation to restore asset declarations of public officials. The government suspended the practice after the full-scale Russian invasion in February of 2022, citing national security concerns.

The talks were in part meant to "lay the groundwork for a sustained, resilient, and green recovery and support Ukraine on its path to the EU accession," the IMF said. To achieve that, the fund called for further reforms to prepare for the anticipated hundreds of billions of dollars in spending needed for reconstruction once the war ends.

“Steadfast implementation of structural reforms, including in governance, anti-corruption and public investment management, will be crucial in laying the foundations for strong and sustained growth, and support Ukraine on its path to EU accession," the IMF said. "Momentum on the governance front should be sustained."

The IMF mission also said that "to support anticipated recovery and reconstruction spending, it will be important to ensure mechanisms for managing donor funding are integrated in budget processes, and in line with best practices on public financial management and transparency."

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