Ukraine urgently needs 42,9 billion USD, the West "shifts" its attention, Kiev finds it difficult to turn commitments into guarantees

A building in the city of Izmail, Ukraine. (Source: Reuters)

On the way back from the Annual Conference of the World Bank (WB) and the International Monetary Fund (IMF), Ukrainian Finance Minister Sergii Marchenko posted on Facebook said that meeting Kiev's main partners directly at the Conference helped them significantly shorten processes that would have taken more time through emails or online meetings.

"This is a great opportunity to expand cooperation and enlist the support of new countries," said Mr. Sergii Marchenko.

Overall, according to the Ukrainian Finance Minister, support for Kiev remains “unanimous, there are guarantees of funding, including from the EU and the US – this is especially important for Ukraine. We have agreements with Japan and Britain. We are working to turn those assurances into concrete commitments.”

However, the problem was revealed by Finance Minister Sergii Marchenko in an interview with Reuters is, Ukraine is finding it more difficult to secure financial support, as the attention of officials in key donor countries turns to upcoming internal elections and geopolitical tensions increasing in the world.

“I see a lot of fatigue, see a lot of weakness among our partners, they seem to want to forget the conflict, but in fact it is still going on, on a full scale,” he said. Marchenko spoke on the sidelines of the WTO and IMF Conference in Marrakech.

Therefore, Ukraine is now having to "work twice as hard to persuade partners to support us compared to previous annual meetings" in April.

Since the conflict with Russia broke out, Ukraine needs to ensure it receives financial support from the West to make up for the budget shortfall. In 2024, forecasts of comprehensive and long-term threats and conflicts require financial support from international partners, especially social and humanitarian spending for 2024, which will reach 42,9 billion USD.

However, this goal of Kiev encountered additional difficulties when the negotiations last week were overshadowed by the world's new hot spot in the Middle East - the Hamas-Israel conflict broke out just as delegates were on their way. Conference.

“Geopolitical changes and the internal political context in different countries” are reducing the desire of governments to support Ukraine, Mr. Marchenko said, mentioning expected elections. ​in the US and European Union next year.

Ukraine has already set aside tax revenues and additional funds raised from internal debt, but the country will still have to rely on external help for the majority of its spending requirements next year.

According to Ukraine's Finance Minister, the country has received a number of commitments, such as $5,4 billion from the IMF program. But they are also expecting commitments from Japan and the UK. Of course, that includes our main partners and allies, the US and the European Union (EU).

The EU is studying a package worth 50 billion euros ($52,6 billion) to support Ukraine from 2024 to 2027. Mr. Marchenko said Kiev is looking to receive 18 billion euros of that by 2024, in accordance with the support progress of this package this year.

Minister Marchenko also welcomed Western efforts to exploit frozen Russian State assets. Regarding progress, in his opinion, “what was previously just called an “achievable goal” is now “like a plan.”

In addition, Ukraine's call for funding also involves transparency in the use of capital from international donors. Recently, Kiev has always emphasized that, "transparency and accountability in the use of capital from international donors are the government's top priorities and are important assets in building the trustworthy partnership". Accordingly, the Ministry of Finance of Ukraine and the SOERA project of the US Agency for International Development (USAID) are coordinating to optimize and strengthen the Ukrainian government's monitoring, verification and reporting system on the use of funding source.

Since the conflict with Russia began in February 2, Ukraine has received nearly $2022 billion from G33 countries. International money has become the main source of funding in ensuring a balanced state budget and for important expenditures of this country.