KYIV, Jan 10 – The International Monetary Fund has increased pressure to force Ukraine start selling state-owned assets to increase private investments and accelerate economic growth, an official said Thursday.

Gösta Ljungman, IMF Resident Representative in Ukraine, met Vitaliy Trubarov, the head of the State Property Fund, to deliver the message.

"The clear requirement of the IMF is to start selling [state-owned] companies in 2019 from the list of large asset privatization," Trubarov said after the meeting.

The pressure accelerates days after the IMF has warned Ukraine that its economy had been weakening due to slowing investments and amid foreign investors’ complaints about difficult business environment.

The slow pace of privatization is a major setback for President Petro Poroshenko and his government, underscoring failure to accelerate long-promised economic reforms.

Poroshenko is running for re-election in March, but is expected to face strong competition from a number of candidates that will criticize him for the government’s poor economic reform record.

The developments come amid dismal performance with privatization last year when only 2% of scheduled assets were sold to investors, forcing the government to borrow money instead to bridge budget gap.

Government critics blamed corruption when well-connected businessmen use loopholes in the legal system to stall privatization by filing a number of lawsuits.

Delayed privatization of state-owned assets allows government-appointed managers gain profits by channeling earning via myriad of off-shore bank accounts without much transparency. It also weakens these assets financially, potentially allowing the well-connected businessmen acquire them later at a fraction of market price.

Odessa Port-Side Plant, a major producer and exporter of fertilizers made from natural gas, is one of the assets whose privatization was delayed last year.

The lawsuits force the Odessa Port-Side Plant to suspend production in April 2018, while selected advisors are unable to start evaluating the company.

“The Odessa plant has in fact halted operation since April,” Trubarov said, adding that Pericles Global Advisory, a member of the White & Case LLP, Kinstellar, KPMG Ukraine ?? SARS ?apital group, is unable to go ahead with the evaluation.

Ukraine last month won a new lending commitment from the IMF for $3.9 billion in loans that will help the country pay off foreign debts that are coming due. (tl/ez)