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UPDATE 1-World Bank working to improve Ukrainian pension reform - president
November 14, 2017 / 3:36 PM / 8 days ago

UPDATE 1-World Bank working to improve Ukrainian pension reform - president

(Adds quotes, details, background)

By Natalia Zinets and Alessandra Prentice

KIEV, Nov 14 (Reuters) - The World Bank is working with the Ukrainian government to ensure a pension reform law is fair and fiscally sound despite being watered down with “unfortunate” amendments, World Bank President Jim Yong Kim said on Tuesday.

The October reform aims to plug a pension deficit of $5 billion and is a condition for more financial assistance from the International Monetary Fund, which supports Ukraine’s war-scarred economy with a $17.5-billion bailout programme.

Ukraine spends more on pensions as a percentage of gross domestic product than almost any other country and its 12 million pensioners are almost equal to the number with jobs.

The World Bank and the IMF, which jointly advised the government on the pension law, have been reviewing hundreds of amendments that were added to the bill without their consultation before it was adopted by parliament.

“There are extra provisions in the pension reform that we feel are very unfortunate,” Kim said during a two-day visit to Kiev.

“But we feel that, working with the ministry, there are ways of ensuring that the poor are targeted. In other words, we’re focusing on making the pension reform work in the form it currently is in,” he told reporters.

“The one area we are most worried about and the government needs to take action on is ensuring that there is an incentive for everyone to contribute to the pension system,” he said.

According to the World Bank and IMF, the law should require all citizens to make a set number of annual pension contributions before they can retire with a full state pension.

The World Bank is also pressing Ukraine to enact a reform to lift a moratorium on land sales, which the bank says will unlock more investment but which is strongly resisted by some parties.

“Land market reform is critical for the future of Ukraine,” Kim said at a second briefing later on Tuesday.

The World Bank and the IMF also want Ukraine to set up a special anti-corruption court, which they see as crucial to helping the work of the national anti-corruption bureau. (Editing by Matthias Williams and Janet Lawrence)

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