IMF and World Bank help push through contentious Ukraine land reform amid Covid-19 pandemic

16 July 2020

In June, the IMF approved an 18-month, $5 billion loan programme with Ukraine. Facing acute public health and economic crises and an ongoing civil war, in the related memorandum the government committed to lifting the 19-year moratorium on the sale of state-owned agricultural lands, after sustained pressure from international finance institutions (see Observer Winter 2019). Olena Borodina with the Ukrainian Rural Development Network commented that, “the agribusiness interests and oligarchs will be the primary beneficiaries of such reform…[this] will only further marginalize smallholder farmers and risks severing them from their most valuable resource.”

Despite the move sparking several large protests in 2019, a bill lifting the moratorium was passed in an emergency Parliamentary session in March. According to a May press release by US-based think-tank the Oakland Institute, this coincided with mandatory Covid-19 stay-at-home orders in place across the country, “effectively quelling potential protests or demonstrations.”

The World Bank incorporated further measures relating to the sale of public agricultural land as conditions in a $350 million Development Policy Loan to Ukraine approved in late June, which included a required ‘prior action’ to, “enable the sale of agricultural land and the use of land as collateral,” along with measures designed to privatise the gas sector and promote private infrastructure investment in Ukraine.

Frederic Mousseau of the Oakland Institute commented, “The goal is clearly to favor the interests of private investors and Western agribusinesses…It is wrong and immoral for Western financial institutions to force a country in a dire economic situation amidst an unprecedented pandemic to sell its land.”