NEWSBRIEFS (02/23/97)

NEWSBRIEFS

Rada fails to ratify "zero option"

KYIV - After a lengthy and heated debate, the Verkhovna Rada failed to ratify an agreement renouncing Ukraine's share of Soviet assets in return for Russia assuming Ukraine's share of the Soviet Union's foreign debt, international agencies reported on February 19. Instead, national deputies voted 233 to 70 to present Russia with a list of conditions for ratification. The main condition was Russia's release of detailed information on the Soviet debt and money held in the central Soviet banking system when the USSR broke apart. Ukraine's share of Soviet assets includes claims to gold, diamonds, hard currency and property. Under an agreement signed by Russian Prime Minister Viktor Chernomyrdin and former Ukrainian Prime Minister Vitalii Masol in 1994, Ukraine was to give up its share of 16.37 percent of Soviet assets in exchange for Moscow picking up Kyiv's 16.37 percent share of the $81 billion Soviet debt. The "zero option" agreement has proved highly controversial in Ukraine's Parliament, but Russia is unwilling to renegotiate. (OMRI Daily Digest)

Justice officials sacked for corruption

KYIV - Justice Minister Serhii Holovatyi announced an investigation has found evidence of corruption and abuse of office by several officials of the Ministry of Justice, Ukrainian radio reported on February 18. First Vice Minister of Justice Volodymyr Chernysh and several heads of the ministry's departments were fired. Mr. Holovatyi said the evidence has been sent to law-enforcement bodies to initiate criminal proceedings against Mr. Chernysh. Earlier this month, President Leonid Kuchma had launched a campaign against corruption in state bodies. (OMRI Daily Digest)

Kyiv to investigate missing German funds

KYIV - President Leonid Kuchma has ordered a criminal investigation into the misuse of funds by Gradobank and a government foundation, international news services reported. Gradobank and the National Foundation for Understanding and Reconciliation are accused of embezzling more than $50 million (U.S.) from a $237 million (U.S.) German government grant intended for survivors of Nazi persecution. There are an estimated 600,000 such victims in Ukraine. Gradobank's accounts have been frozen since it stopped dispersing the money in December 1996. The Cabinet of Ministers passed a resolution earlier this month which proposed that special compensation bonds be issued to war victims through another commercial bank. The Financial Times reported in its February 15-16 weekend edition that one German official said "The German money was used for loans to insiders and members of the ruling establishment." Germany had agreed in 1993 to provide humanitarian settlement of 1 billion DM (about $590 million U.S.) to Russia, Ukraine and Belarus for victims of World War II, including persons who were forced laborers or were interned in concentration camps. (OMRI Daily Digest, Financial Times)

Five killed in mining accident

DONETSK - Five miners were killed on February 7 in the Donbas when a block of ice crashed into an elevator they were using to ascend from the coalface at the Karl Marx Mine in Yenakiyevo, 30 miles northeast of Donetsk. Murtzai Churadze, a local emergency official, said, "The ice fell when miners were on their way to the surface after their shift. Five were killed, five were injured and taken to the hospital." The miners were some 1,200 feet below the surface when the accident occurred. (Reuters)

Ukraine third in foreign investment

GENEVA - Russia has led foreign direct investments to the ex-Soviet Union with $6.6 billion as of 1996, while Ukraine was in third place with $1.1 billion. Kazakstan ranked second in foreign direct investments with $3.24 billion. Moldova and Belarus were at the bottom of the league with just $104 million and $350 million, respectively, reported the U.N. Economic Commission for Europe, a specialized United Nations agency for economic cooperation in Europe. The report was based on official data from central banks as of mid-1996. Western Europe accounted for the bulk of foreign direct investment, with an 80 percent share in Belarus, 70 percent in Russia and 60 percent in Estonia, Ukraine and Latvia, but only 17 percent in Kazakstan. (Reuters)

Kuchma dismisses agriculture minister

KYIV - President Leonid Kuchma has sacked Agriculture Minister Anatolii Khorishko but no replacement has been named, a press spokesman for Mr. Kuchma said on February 17. "We are still waiting for an official signed order and the name of the new minister," the spokesman said. Mr. Kuchma had referred to "serious inadequacies" in the ministry's work when he announced the decision. Mr. Khorishko was appointed last summer after a drought that led to a record low grain crop of 25.4 million tons against 36.5 million in 1995. This compared to crops of up to 50 million tons regularly produced in Soviet times. President Kuchma said last month that it was essential that within the next two to three years Ukraine start producing grain at the rate it did in Soviet days. "The grain crop losses cost us about $2.5 billion a year and neither nature nor a lack of cash explains that. The reason is the leadership's mistakes," he said. President Kuchma also fired First Vice Minister of Transportation Leonid Zhelezniak on February 14. President Kuchma announced the two dismissals at a meeting of a presidential committee on organized crime and corruption. (Reuters, OMRI Daily Digest)

Large-scale privatization to proceed

KYIV - Ukraine plans to draw up sales of shares in all large-scale enterprises by the first half of this year, Prime Minister Pavlo Lazarenko said on February 17. "By the first half of 1997 we will confirm the plan of placement of shares in all enterprises," he told a meeting of European Bank for Reconstruction and Development (EBRD) directors, which arrived in Kyiv for weeklong meetings. "We must end privatization by the end of the year," Mr. Lazarenko said. The prime minister said the government also planned to issue shares in 105 of 228 companies that it has made available for strategic foreign investment, and would discuss this week whether to add another 40 enterprises to the list. He said the president would pass a decree allowing the State Property Fund to privatize through foreign investment. This would effectively overturn a parliamentary ruling late last year to stop privatization through strategic foreign investment until the government developed rules to govern the process. Although Ukraine has completed small-scale privatization, it has been criticized by international funding bodies for the over-all slow pace of its privatization program. It has started privatizing only half of its 17,000 medium- and large-scale enterprises, and about 3,500 remain under a privatization moratorium placed by the Verkhovna Rada because they are considered "strategic" to national security. (Reuters)

Moscow sees Baltic states as buffer

MOSCOW - The Russian Foreign Affairs Ministry's director of foreign policy planning, Vadim Lukov, said on February 13 that Russia wants the Baltic states to stay outside of any alliances and maintain a policy of neutrality, ITAR-TASS reported. Russia wants to base its relationship with Lithuania, Latvia and Estonia on "economic cooperation, the 'indivisibility' of each state's security, and respect for human rights and national minorities," he said. He defined the Baltic states as a buffer zone against the expansion of NATO. He stressed that it is unacceptable to try to protect the security of other countries while creating a "strategic risk" to the security of Russia. (OMRI Daily Digest)

Russia reserves right to use nukes

MOSCOW - In an interview on Russian Public TV (ORT) on February 15, Andrei Konovalov, president of the Institute of Strategic Evaluation, confirmed that the new military doctrine being prepared by the Security Council does allow for Russia to be the first power to use or threaten to use nuclear weapons in certain circumstances - for example, to prevent the expansion of a regional conflict in which Russian conventional forces were engaged. The USSR publicly renounced the first use of nuclear weapons in 1982, but Russia revoked this commitment in the military doctrine it adopted in 1993. (OMRI Daily Digest)

Georgian president visits Ukraine

KYIV - Eduard Shevardnadze ended an official two-day visit to Ukraine on February 14, Ukrainian and international agencies reported. President Shevardnadze and President Leonid Kuchma signed nine documents on cooperation, including agreements on double taxation, trade and economic cooperation, and cooperation on customs and border issues. Trade between Ukraine and Georgia is expected to reach $500 million this year, up from $180 million in 1996. Talks also touched on cooperation concerning energy supplies. Ukraine is interested in a project to modernize an oil pipeline from Azerbaijan to Georgia. Ukraine produces pipes and other equipment for the gas and oil industries. Both presidents voiced skepticism over the viability of the CIS. Upon returning to Tbilisi, President Shevardnadze said in a radio interview that the focal point of Georgian-Ukrainian relations is creation of a "Eurasian corridor" to provide for supplies of Caspian oil and other products from Central Asia. (OMRI Daily Digest, Respublika)

Pension arrears grow in Ukraine

KYIV - Pension arrears stood at 1.33 billion hryvni ($707 million U.S.) on February 15, UNIAN reported. The first deputy head of the State Pension Fund, Volodymyr Onyschuk, said the fund had failed to receive 544 million hrv in 1996 and 103 million in January 1997. Mr. Onyschuk blamed the banks, which do not demand that enterprises pay compulsory contributions to the Pension Fund, and local authorities, which exempt some enterprises from contributions. Mr. Onyschuk said pension arrears also are caused by the payment of wages in goods rather than cash. (OMRI Daily Digest)

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