War-torn Ukraine Pleads with Hesitant Investors

Ukraine is pleading for cash to rebuild an economy battered by a year of war, but drawing investors to a country where shells are still booming is a struggle.

Kiev is frustrated that Western officials are ordering it to speed up economic reforms but refusing to send peacekeepers to stabilize a conflict it blames on Russia.

"Getting foreign investors to come to a country that has a war with a nuclear-powered state is a very complicated task," Ukraine's Prime Minister Arseniy Yatsenyuk told a conference of foreign financiers and officials in Kiev on Tuesday.

Fighting between government troops and pro-Russian separatists in Ukraine's industrial east has killed more than 6,100 people in the past year and forced more than a million to flee their homes.

"It's very difficult for the ordinary Ukrainian to live and survive. Living standards have dropped substantially," Yatsenyuk told investors. "I strongly rely on your support."

As the visiting officials repeated demands for more reforms to clean up business and politics in the former Soviet country, Yatsenyuk sounded increasingly irritated.

Like Western powers, his government accuses Russian President Vladimir Putin of sending arms and troops to aid the separatists -- a charge Russia denies.

"When you talk about the rule of law and reform of the public administration, I do (agree with) everything you say," Yatsenyuk said, raising his voice indignantly.

"But I believe that the preliminary and most important issue is just to get rid of Russian terrorists and Russian tanks from my country," he said. "Get out, Mr Putin!"

Kiev's European and U.S. allies are reluctant to send weapons or troops to Ukraine for fear of escalating the conflict, which has brought their relations with Moscow to a level unseen since the Cold War.

"We know about Ukrainian expectations today, but it's impossible to send a military mission," said Donald Tusk, the president of the European Council of EU leaders, after meetings the Ukrainian government on Monday.

- 'Please, invest in Ukraine' - 

Visiting officials praised Ukraine's recent efforts to root out corruption and urged it to push through more reforms. They notably called for new laws against business monopolies and to boost energy efficiency.

"It's harsh to demand the government to undergo difficult reforms when the country is in the midst of a military conflict," said Liza Ermolenko, an emerging market economist at London-based research group Capital Economics.

"But given Ukraine's history of political instability, it's best to push reforms through now, while there is momentum."

Tuesday's conference "will probably bring in relatively little funds, but nonetheless it is sending a message to investors that Ukraine is open for business."

The United States, European Union and various international institutions have already pledged billions of dollars in loans and other forms of assistance to Ukraine.

The International Monetary Fund has agreed a bailout deal worth $17.5 billion over four years. It estimates the country must raise $40 billion overall to avoid financial collapse.

While the IMF and other international lenders are expected to help cover that gap, the government wants to get private money coming in so that the economy starts properly rolling again.

"My government is out of tools to boost investment and economic growth. Please, invest in Ukraine," Yatsenyuk pleaded on Tuesday.

Oleksandr Zholud, an economist at the International Centre for Policy Studies in Kiev, reckoned Ukraine would struggle to gain more funding from major international lenders in the near future.

"Ukraine should not beg. The biggest part of the work has to be done by Ukraine itself," he said. "You can't ask for more money just because you are kind and nice."