IMF demands open competition for the position of the head of the Deposit Guarantee Fund with the involvement of foreign observers - expert

To receive the next loan tranche, the International Monetary Fund requires Ukraine to fulfill a number of obligations. These include completing the reform of the National Anti-Corruption Bureau, conducting an audit of the National Bank's international reserves, and holding open competitions for a number of positions, including the managing director of the Deposit Guarantee Fund. This was reported by economic expert Oleksandr  Okhrimenko in an exclusive commentary to UNN.

Context

In September, an IMF mission will start working in Ukraine in preparation for the fifth review of the Extended Fund Facility program. The expert discussions will focus on Ukraine's compliance with the terms of the Memorandum of Economic and Financial Policies. It is planned that as a result of a successful review of the program, Ukraine will receive the next tranche of the IMF in the amount of about $1.1 billion.   

"There is a requirement, first of all, to hold transparent elections of the Supervisory Board of Naftogaz. Yes, indeed, there are requirements in general in the future, when electing the heads of higher state bodies, including the DGF, to have a transparent competition, but this is not only for the Fund. We still have the issue of the State Securities Commission, which also requires transparent elections," the expert added.

According to him, the IMF requires that the heads of all government agencies be elected publicly and only in an open competition.

"Another requirement is that foreign experts must participate in the competition and evaluate the candidates. Because we had a situation where the competition was public, and when it came to the final result, it turned out that the person who was chosen did not have a very good reputation, and no one paid attention to it. That's why the IMF requires that if you hold a competition, the competition commission should include 30% of foreign independent experts so that they can influence the decision," Okhrimenko added.

In addition, he said, the IMF also requires an audit of the National Bank of Ukraine. First of all, according to Okhrimenko, the audit should concern foreign exchange reserves, to what extent they meet the requirements.

Foreign partners also emphasize that anti-corruption bodies in Ukraine should be independent.

"The main requirements there relate to anti-corruption legislation. We need to complete our reforms to make the NABU and the anti-corruption system independent. This is not a critical situation, but it will be done," Okhrimenko said.

Recall

Earlier it became known that the Administrative Board of the Deposit Guarantee Fund dismissed Svitlana Rekrut from the position of Managing Director of the DGF due to the expiration of her 5-year contract. Currently, Olga Bilay, Rekrut's deputy, is acting as managing director. According to media reports, the Fund's administrative board plans to appoint a new head in a closed session . Among the candidates are Bilay and Pavlo Poliarush, head of the National Bank's Department for Work with Troubled Assets.

In an interview, Rekrut said that the IMF requires Ukraine to amend its legislation to hold an open competition for the position of the head of the DGF. Currently, there is no such procedure in the law. According to her, Kyiv has committed itself to developing and approving such a procedure in the spring of 2025. It is possible that Bilyi may remain acting managing director of the DGF until an open competition for this position is held, as it makes no sense to appoint the head of the Fund for several months.

Add

Earlier, journalists found out that one of the candidates being considered for the position of managing director of the DGF is Pavlo Polarush, head of the National Bank's Department for Work with Troubled Assets. According to media reports, he has repeatedly traveled abroad since the start of the large-scale invasion. In particular, journalists reported that in November 2022, he received permission to leave the country from the odious former Deputy Minister of Defense, who is now a suspect in corruption crimes. The permit was allegedly issued to Polarush to travel abroad in an elite Lexus car to receive humanitarian aid. However, it is not yet known on what grounds Polarush traveled abroad from February to November 2022.

Member of the Verkhovna Rada Committee on Transport and Infrastructure Mykola Velychkovych believesthat law enforcement should investigate Polarush's travels abroad. And a member of the Verkhovna Rada Committee on National Security and Defense, Hennadiy Kasai , does not rule outthat Polarush may have problems during the special vetting process as a candidate for the position of managing director of the Deposit Guarantee Fund.