New money revives old hopes
Ukraine now has its best chance for economic recovery. In July the president, Leonid Kuchma, carried out a cabinet reshuffle and appointed a new deputy prime minister responsible for economic reform, Serhiy Tihipko, who has a reputation for getting things done. A 37-year-old banker from the southern city of Dnipropetrovsk, he created in Privatbank one of the few start-up banks to grow into a serious financial institution.
The new government, encouraged by a surge in Ukraine's debt and equity markets, has already succeeded where the previous administration, under the deputy prime minister, Viktor Pynzenyk, failed. The 1997 budget was passed in July and parliament has also accepted new laws on value-added tax and corporate taxation. "The 1997 budget at times became a political game," says Ihor Mityukov, Ukraine's finance minister. "What was passed was a compromise, but one that allows us to continue cooperation with the IMF, the World Bank and other financial institutions."
However, the government has been forced to scale down its hopes of obtaining a $2.5 billion extended fund facility (EFF) from the IMF, which would have given it three-year funding.