Embassy of Ukraine disagrees with Heritage Foundation report

JERSEY CITY, N.J. - Ukraine's Embassy has expressed disagreement with a study on Ukraine in the Heritage Foundation's "The Index of Economic Freedom," which concludes that the country has shown little movement towards a free economic system.

The biggest criticism is that the 1996 study, which examined 142 countries, is based on data from 1993-1994, and is not representative of the strides towards a free market economy that were begun with President Leonid Kuchma's reform initiatives of 1995, stated the Embassy in a January 17 press release.

Another criticism it leveled is that the Heritage Foundation study, which was prepared by Bryan T. Johnson and Thomas P. Sheehy, used "no significant input from outside authorities and no references to available outstanding publications of international financial institutions and research centers of the U.S., non-governmental institutions and universities monitoring [the countries' developments]."

Vasyl Zorya, press attache at the Embassy, told The Weekly the biggest concern is that inaccurate information released by think-tanks like the Heritage Foundation will give U.S. governmental leaders a skewed perception of efforts made by Ukraine to bring about market reform.

He said many leading American politicians read the study, and cited the back flap of the latest edition, where quotes by Rep. Newt Gingrich, speaker of the House of Representatives, William E. Simon, former secretary of the Treasury, and Rep. Bob Livingston, chairman of the Appropriations Com-mittee are used to promote the book.

Mr. Zorya explained, "We are acutely aware of our standing as the third largest recipient of aid from the U.S. in 1996. We feel that [the study] misleads people into thinking that the money has not been effectively used in supporting Ukraine's economic development, and may make it tougher to get additional support in the future."

The Heritage Foundation report devotes two pages to the economic situation in Ukraine. Some of the findings that the Embassy disagrees with are that the public sector still produces most of the GDP; that "the banking environment remains in chaos and is under strict government control"; that there remains a high level of protectionism; and that taxes are very high.

Following is the full text of the Embassy's press release.

Copyright © The Ukrainian Weekly, February 11, 1996, No. 6, Vol. LXIV

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