Treasury official says budget assistance designed to help Ukraine anti-corruption efforts

WASHINGTON (AP) — Just back from a visit to Ukraine, a U.S. Treasury official on Tuesday described a country whose wartime economy has proven resilient in the face of Russia's invasion and said U.S. and allies' budget assistance is designed to help the nation combat corruption and increase transparency.

His comments come as Ukraine seeks to join NATO but has been blocked in part by political corruption scandals. Transparency International ranks Ukraine poorly, 122nd in its Corruption Perceptions Index of countries.

Brent Neiman, deputy undersecretary for international finance, said in a speech that Ukraine, which receives hundreds of billions in financial support from the U.S. and allied nations, needs to undertake reforms to “reduce the likelihood for conflicts of interest and corruption.”

Neiman, speaking to the Atlantic Council think tank, described positive macroeconomic signs including new business registrations, a shift in trade routes to the Danube river and train passenger levels that are back to pre-war levels.

Still, the National Bank of Ukraine's growth estimate for 2024 was recently downgraded to 3% Neiman says, and manufacturing facilities in concentrated areas are vulnerable to bombardment.

The U.S. has provided roughly $175 billion to Ukraine, according to the Council on Foreign Relations.

Neiman laid out recommended anti-corruption steps that Ukraine has taken, including having public office holders report their asset holdings, insulating Ukraine’s Special Anti-Corruption Prosecutor’s Office from political pressure and improving corporate governance at state-owned companies.

“To be clear, I believe the U.S. and the international community should help Ukraine defend itself against Russia’s barbaric attacks even if there were no scope for Ukraine to make these sorts of reforms," Neiman said. "Nonetheless, this is an important opportunity to help Ukraine do both.”

“To this end, budget assistance from the United States, Europe, and the International Financial Institutions is designed to help support Ukraine in undertaking a number of priority reforms.”

The European Union and NATO have demanded widespread anti-graft measures before Kyiv can realize its ambition of joining the blocs.

Ukraine has taken steps to root out corruption, and a dragnet over the past two years has seen Ukraine’s defense minister, top prosecutor, intelligence chief and other senior officials lose their jobs.

Ukrainian President Volodymyr Zelenskyy was elected on an anti-corruption platform in 2019, and both Zelenskyy and his aides have portrayed the recent firings of top officials, notably that of Ivan Bakanov, former head of the State Security Service, in July 2022, as proof of their efforts to crack down on graft.