Ukraine crisis: World Bank ready to provide $3.8 billion aid

WASHINGTON (AFP) - The World Bank said on Monday it is prepared to offer US$3 billion (S$3.8 billion) in aid to Ukraine this year to support economic reforms and development by its beleaguered new interim government.

The Bank received a request from the Kiev authorities, which took power last month after Ukraine's former Russian-backed president Viktor Yanukovych was ousted. 

"We are committed to supporting the people of Ukraine in these difficult times and very much hope that the situation in the country stabilizes soon," Bank president Jim Yong Kim said.

"We are moving forward with our pipeline of projects and aim to support the government to undertake the reforms badly needed to put the economy on a path to sustainability." The bank said the Ukraine economy faces some serious challenges that will require "urgent action in the short term", as well as sustained reform over the longer term.

It said the key priorities are restoring macroeconomic stability, shoring up the country's banks, reforming to the energy sector and "seriously tackling corruption." The US$3 billion for 2014 would be in addition to an ongoing multiyear Bank investment and guarantee program in Ukraine that totals about US$3.7 billion and supports development of crucial infrastructure such as the water supply, sanitation, power and roads.

The World Bank offer comes amid a growing effort involving at least the International Monetary Fund, the United States, and European powers to help strengthen the new authorities in Ukraine.

Washington has already offered US$1 billion in loan guarantees and last week European Commission president Jose Manuel Barroso announced aid of "at least" 11 billion euros (S$19.3 billion).

The IMF has been pushed into the forefront of efforts in part to ensure the country undertakes adequate and transparent reforms to its finances and institutions.

After two days of talks with Prime Minister Arseniy Yatsenyuk and his economic team, IMF European Department Director Reza Moghadam said Friday he was "positively impressed" with their sense of responsibility and commitment to economic reform.

"The IMF stands ready to help the people of Ukraine and support the authorities' economic program to put Ukraine firmly on the path of good economic governance and sustainable growth while protecting the poor and vulnerable." Mr Yatsenyuk said he inherited a government with virtually empty coffers and dangerously low reserves.