KIEV, Oct. 28 - The U.S. administration's decision to give $1 billion in loan guarantees to Ukraine is “a vote of confidence” the country will go ahead with reforms, U.S. Secretary of Commerce Penny Pritzker said.

The money comes on top of a $17.5 billion aid program from the International Monetary Fund.

Pritzker, in an interview with The Associated Press, called the Ukrainian government’s progress on reforms over the last six to nine months “extraordinary.”

The U.S. official was in Ukraine to help the government push through judicial and anti-corruption measures that would, hopefully, attract the investment needed to wean the country off Western aid.

Ukraine, whose economy is expected to shrink by about a tenth this year, is facing many challenges.

Though the conflict in the rebel-held east has quietened down in recent months, much of the country's industrial heartland is either in the hands of Russia-backed rebel or has seen its supply chains disrupted. An anti-corruption push has yet to claim any prominent scalps and Sunday's regional elections saw the resurgence of regional oligarchs that often challenge the government in Kiev.

Meanwhile, trade with Russia, which has long been the country's biggest commercial partner, is in freefall as political relations soured over the conflict.

Goods exports to Russia in January-August this year were less than half what they were a year earlier, and replacing that lost trade will be hard. Since Sunday, there are no longer any direct flights between the two countries.

Despite a frantic schedule of trade missions from the Ukrainian government, exports to the U.S. and EU are falling too, with increased Chinese investment in agriculture a rare bright spot.

Instead of restoring Russian trade to pre-conflict levels, the goal is an economy close to that of neighboring Poland, with greater European and global integration, says Finance Minister Natalie Jaresko.

"I don't think those levels of trade with Russia will ever come to be again," she says. "We are building our exports into Asia, into Europe and into the Middle East and North Africa."

Also on the horizon is the repayment of a $3 billion debt to Russia dating from the final days of the last pro-Russian Ukrainian president, Viktor Yanukovych. Russia has refused to write off a part of the loan, as Ukraine's other bondholders agreed to do this year to help the country avoid default.

If Ukraine fails to pay the loan at the end of the year, Russia could try to obstruct future aid to Ukraine from the IMF, of which it is a member. (ap/ez)