Davos Diary: Russia Trying to Derail IMF Talks, Says Ukrainian Official

It’s little wonder that Ukraine Finance Minister Natalie Jaresko might need to put her head down on a Davos interview table for a quick rest before rushing off to her next meeting. The Chicago native who now is in charge of handling Ukraine’s economy has the wearying task of convincing foreign allies that her country is a solid investment despite this week’s uptick of violence from Russian troops and separatists loyal to Moscow.

Having been on the job only for a few weeks, Jaresko has spent the last few days shuttling between world leaders and titans of business at the annual World Economic Forum in Davos. Her main message: The rising new violence marks Russia’s attempt to undermine Kiev’s efforts to attract international financial support.

“This aggression is particularly timed to affect the perspective of our international partners with regard to whether or not this problem is resolvable, fixable,” Natalie Jaresko told me on Friday.

As we spoke, the United Nations reported that 262 people have been killed in eastern Ukraine fighting between Russian-backed separatists and the central government’s troops over the past nine days. That’s the deadliest period of time in the fight since a tenuous ceasefire was struck in September. And hours later, the separatists rejected a peace deal and threatened a new offensive against Ukrainian government troops.

Jaresko arrived for our meeting unaccompanied and, as we sat down, moved her chair a little closer to mine so as not to strain her already-tired voice.

Like Ukrainian President Petro Porosenko, who spoke here Wednesday, Jaresko had to juggle the two seemingly conflicting points that she is pushing with the International Monetary Fund, other foreign officials, and potential investors.

First, Jaresko said, Ukraine needs Western financial support to fight Russian aggression on the edge of Europe. “We’re doing all this to defend European values, to defend Ukraine, to defend Europe, and there’s a burden-sharing,” she said.

At the same time, however, Jaresko said Kiev is a good investment — not a charity case. The Ukrainian government is making headway on economic reforms, she said, and the country’s economy is rife with opportunity — despite the $10 million a day being spent to maintain security in the east.

“We don’t want the world to forget about it, but at the same time that war is only on 7 percent of our territory and there is plenty of Ukraine to see,” Jaresko said. “Even though we’re in a recession, my country is moving forward.”

Jaresko said she hoped to get the next installment of funding from the IMF, which will also unlock bilateral support from the U.S. and Europe, by the end of February.

Jaresko worked in the private sector in Ukraine for over 20 years after working for the U.S. State Department. She said her government is already making progress on the reforms the IMF called for when it approved a $17 billion loan program for Ukraine’s new government last March. Kiev is creating more government transparency, reforming the corrupt tax system, and cutting subsidies, she said.

“It’s not only about some program with the IMF, or some agreement with the European Union; it’s about fulfilling the demands of people who have given their lives for these values, this change,” she said.

Fabrice Coffrini/AFP