NEWSBRIEFS

Aslund urges speedy tax reform

KYIV - A leading Western economist urged Ukraine on March 4 to approve a tax reform package and the overdue budget quickly to achieve stability and growth. "Ukraine needs more profound reform than originally expected," Anders Aslund, a director of the Soros International Economic Advisory Group, told a meeting of economists and government officials. "The draft laws should be passed more quickly," he said. Mr. Aslund commented that corruption, a punitive tax system and a high degree of regulation were impeding economic growth, forecast at zero this year after the economy shrank 10 percent in 1996. (Reuters)

Defense minister denies allegations

KYIV - Ukraine's Defense Minister Oleksander Kuzmuk denied allegations by Russian Duma Deputy Sergei Baburin that the upcoming NATO naval exercises in Ukraine are to include training for fighting against separatists, Ukrainian radio reported on March 3. Mr. Baburin's claims implied that the maneuvers were directed against separatism in Crimea. Minister Kuzmuk said the objective of the training was to offer humanitarian aid to a fictitious "Orange republic" that had just suffered an earthquake. The minister also denied that allowing U.S. naval ships to participate in the exercises was meant to put pressure on Russian ships in Sevastopol. (OMRI Daily Digest)

Committee to handle investors' complaints

KYIV - In an effort to boost foreign investment in Ukraine, President Leonid Kuchma has created a committee to deal with investors' complaints, the presidential press service said on March 4. Many foreign investors have complained that it is too hard to start a business in Ukraine, which has attracted only $1.4 billion in investment since independence in 1991, because of demands for bribes, complex laws, and high taxes. "The chief task of this consultative and advisory body is to prepare and present to the Ukrainian president - or, on his orders, to government departments - ideas to prevent conflict situations from developing," the president's order stated. President Kuchma appointed Roman Shpek, chairman of the National Agency for Reconstruction and Development, as head of the new body. (Reuters)

Ukraine denies selling nerve gas to China

BEIJING - Newspapers in Hong Kong and Taiwan have accused Ukraine of selling 500 tons of sarin nerve gas to China, ITAR-TASS reported on March 3. An unnamed official at the Ukrainian Embassy in Beijing denied the reports, calling them "groundless conjectures." Other papers and observers also regarded the charges with skepticism, noting that China itself had been a victim of chemical warfare and has always come out against chemical weapons. (OMRI Daily Digest)

Yeltsin, Clinton discuss summit agenda

MOSCOW - In a February 27 telephone conversation, Presidents Boris Yeltsin and Bill Clinton agreed on an agenda for their March 20-21 summit in Helsinki, Russian and Western agencies reported. The meeting will focus on three broad topics: European security and NATO expansion, arms control, and bilateral economic ties. Other issues, such as the evasion of U.S. export controls on supercomputers by the Russian Ministry of Atomic Energy could also come up. The Journal of Commerce reported on February 27 that the U.S. may ask Moscow to return the IBM RS/6000 SP computer it recently bought through an unspecified European middleman. The computer can perform 10 billion theoretical operations per second (MTOPS), while U.S. regulations require individual approval of any sales to Russia of computers capable of more than 2,000 MTOPS. (OMRI Daily Digest)

Yeltsin, Primakov discuss NATO, summit

MOSCOW - Russian Foreign Minister Yevgenii Primakov on March 2 briefed President Boris Yeltsin on his recent visits to Brussels, Oslo, Copenhagen and London. Mr. Primakov said progress had been made on the proposed Russia-NATO charter, but he and Yeltsin agreed that any such agreement must not only address Russian "concerns" but be legally "binding," at which alliance leaders have balked. President Yeltsin also ordered Mr. Primakov to visit Washington to finalize preparations for the March 20-21 U.S.-Russian summit in Helsinki. Addressing the Royal Institute of International Affairs in London on February 28, Minister Primakov argued that Western policies aimed at expanding NATO and hampering CIS integration were damaging Russia's relations with the West. He added that Moscow wants a moratorium on NATO enlargement. (OMRI Daily Digest)

Ukraine, Romania agree on treaty draft

KYIV - Ukraine' First Vice Minister for Foreign Affairs Anton Buteiko and his Romanian counterpart, Dumitru Ceausu, initialed a draft of a basic treaty on friendship and cooperation, Agence France Presse reported on March 1. No date has been set for the signing of the treaty, but Romania has been under pressure to conclude the accord in order to qualify for the first wave of NATO expansion. The two main obstacles to the treaty have been Romania's demand that Ukraine condemn the 1939 Molotov-Ribbentropp Pact that made Romania give up territory in favor of the Soviet Union (Kyiv refused to do so because it argued it could open the way for future claims to Ukrainian territory) and the issue of the Romanian minority in Ukraine. Ukraine accepted Romania's demands regarding the minority question, while Bucharest backed away from its insistence that the 1939 pact be condemned. (OMRI Daily Digest)

Moldova, Ukraine to set up customs union

CHISINAU - The joint Moldovan-Ukrainian committee on economic and commercial cooperation agreed at its February 27-28 meeting in the Moldovan capital, Chisinau, to draft a list of principles for setting up a customs union between the two states at an unspecified date in the future. Moldovan agencies reported on February 28 that the document also deals with the avoidance of double taxation and with facilities for transiting goods. The committee also approved a number of accords for cooperation on border-zone settlements, joint controls at the border crossings, as well as a protocol on Moldovan property in Ukraine. The documents will be signed during President Leonid Kuchma's visit to Moldova on March 11-12. (OMRI Daily Digest)

Moldova suffers effects of Chornobyl

CHISINAU - Cancer and other radiation-related illnesses are on the rise in Moldova because of the 1986 nuclear accident at Chornobyl, a top health official said on February 19. Ion Bahnarel, head of the Institute of Hygiene and Epidemiology, said such illnesses are not expected to peak in his country until the turn of the century. Cases of Down's Syndrome have tripled in the past 10 years, more than half of expectant mothers are ill and 40 percent of them suffer from anemia, according to the Health Ministry. About 3,500 people from Moldova helped build a concrete sarcophagus encasing the stricken fourth reactor to contain Chornobyl's fallout. Eighty of them since have died, and almost 700 have been incapacitated. (Associated Press)

Committee comments on death penalty

KYIV - The parliamentary Human Rights Committee has said that banning the death penalty in Ukraine now would be "untimely," ITAR-TASS reported on February 27. It proposes a gradual introduction of life imprisonment, saying that it is taking into consideration public opinion and the lack of facilities for maintaining life prisoners. The Council of Europe sharply criticized Ukraine last month for failing to honor its commitment to stop executions. (OMRI Daily Digest)

Ukraine grants citizenship to residents

KYIV - The Verkhovna Rada has passed an amendment granting Ukrainian citizenship to all citizens of the former USSR who have been permanent residents in Ukraine since the country gained independence in 1991. Another amendment stipulates that Ukraine will not extradite Ukrainian citizens, except in special cases stipulated by international law and approved by the Ukrainian Parliament. (OMRI Daily Digest)

Slava Stetsko elected to Parliament

KYIV - Slava Stetsko, leader of the Congress of Ukrainian Nationalists and president of the Anti-Bolshevik Bloc of Nations, was elected on March 2 to the Verkhovna Rada of Ukraine as national deputy from the Nadvirianskyi Elections District No. 201, which is located in the Ivano-Frankivsk region. Eighty percent of the district's registered voters, 74,398 persons, came out to the polls, and 86.5 percent of those voted for Mrs. Stetsko. Her opponent, Vasyl Kovtsuniak, a member of the Socialist Party, received 5,054 votes, or 6.8 percent. (Respublika)

Another anti-Kuchma plot revealed

KYIV - The Ukrainian newspaper Nezavisimost has published an article alleging that several Ukrainian deputies have been collaborating with Russia to remove President Leonid Kuchma from power, Izvestiya and NTV reported on February 27. According to several unconfirmed documents, a team was to start a disinformation campaign linking the November 1996 killing of deputy Yevhen Scherban to President Kuchma and Prime Minister Pavlo Lazarenko. An official from a "foreign power" (meaning Russia) is reported to have felt that Mr. Kuchma should be removed by the end of the year because of his pro-Western orientation and that those who participated in his ouster could replace him. In mid-January, a similar article appeared in Vseukrainskiye Viedomosti alleging Russian officials were plotting a disinformation campaign that would lead to President Kuchma's impeachment. There has been no official reaction from Kyiv to the article, and the editor-in-chief of Nezavisimost was unavailable to respond to NTV's questions. (OMRI Daily Digest)

Kostenko is candidate for IAEA post

KYIV - Ukraine's minister of the environment and nuclear safety, Yurii Kostenko, is one of the candidates for the position of general director of the International Atomic Energy Agency, an autonomous intergovernmental organization that functions under the aegis of the United Nations. The Vienna-based IAEA is reviewing six candidates for the position; they are representatives of Ukraine, Egypt, Zambia, Iran, Italy and Sweden. Ukraine is the world's seventh largest producer of nuclear energy. Given Minister Kostenko's reputation in international political and nuclear circles, and Ukraine's renunciation of nuclear weapons, sources say the Ukrainian candidate is considered a good choice. (Respublika)

Italy, Ukraine increase bilateral trade

KYIV - The prime ministers of Ukraine and Italy on February 26 hailed growing bilateral trade and vowed to build a southern European transport corridor. "The volume of bilateral trade has doubled since 1994 and reached almost $700 million last year," Ukrainian Prime Minister Pavlo Lazarenko told a news conference held with his Italian counterpart Romano Prodi. "We will concentrate on links between small and medium businesses and enterprises, with the priority on training experts, on the agriculture sector and on investment," Mr. Lazarenko said, adding that there were 170 Ukrainian-Italian ventures. The two prime ministers said Italy and Ukraine should find cash for a Triest-Ljubljana-Budapest-Kyiv transport corridor. The corridor has been built as far as Budapest and is expected to include a fast highway and railway. Funding is being sought through the European Bank for Reconstruction and Development and the World Bank. Ukraine wants to eventually extend the Triest-Kyiv link to Kazakstan and China. Ukraine also asked Prime Minister Prodi to speed up Italy's ratification of a 1994 cooperation treaty between Ukraine and the European Union, so far ratified by only six of the 15 EU members. Mr. Prodi later met President Leonid Kuchma in Lviv, where the Ukrainian leader was on holiday. (Reuters)

New faction in Verkhovna Rada

KYIV - A new deputies' faction has been established in the Verkhovna Rada of Ukraine: European Choice. The group's goal is to promote Ukraine's integration into European structures. It will function in opposition to another faction, called Soyuz, which promotes the re-creation of the USSR. European Choice includes 102 deputies; according to political observers, it has the potential to become the strongest faction in the current Verkhovna Rada. (Respublika)

2,000th lawyer is from Kyiv

WASHINGTON - Baker & McKenzie, the nation's largest law firm, reached a milestone in late February as it hired its 2,000th lawyer, a Ukrainian attorney who joined its Kyiv office. (The firm's nearest American competitor, size-wise, is Skadden, Arps, Slate, Meagher & Flom, which had more than 1,100 lawyers last year, according to a survey by Of Counsel, a legal trade journal.) To celebrate, Baker & McKenzie is providing the new associate, Mariana Marchuk, with "an all-expense-paid trip for two to the Olympic Games" in Australia in the year 2000. (The Washington Post)

Belarus imposes VAT on Ukrainian goods

MIENSK - President Alyaksandr Lukashenka on February 21 signed a decree imposing an unspecified VAT on Ukrainian goods imported into Belarus, Ukrainian and Belarusian Radio reported. The decree is aimed at bringing Belarus' legislation into line with Russia's. Goods produced jointly by Belarus and Ukraine will not be affected by the new decree. Trade between the two countries stood at $1.5 billion in 1996, with Kyiv registering a surplus. The following day, Agence France Presse reported that President Lukashenka had once again railed against Russia over the customs union. He was quoted as saying he will scrap plans for closer integration if Russia does not dismantle customs controls on the Belarusian-Russian border. (OMRI Daily Digest)

Ukraine delivers tanks to Pakistan

KYIV - Pakistan's Defense Minister Masar Rafi arrived in Kyiv on February 18 in connection with the shipment of the first 15 Ukrainian T-80 UD tanks to Pakistan, Ukrainian radio reported. Last year, Ukraine concluded a deal with Islamabad to deliver 320 tanks worth $550 million in what was the country's largest arms sale to date. On February 19, ITAR-TASS reported that Russian Foreign Trade Minister Oleg Davydov said he is opposed to the arms deal because Ukraine negotiated it without consulting Russia and it threatens India, Russia's strategic partner in the region. Mr. Davydov said his ministry will not issue licenses for the delivery of any components for the tanks from Russia. Russia has been concerned over Ukraine's efforts to develop its arms industry for foreign export because it views Ukraine as a possible competitor its own arms sales. (OMRI Daily Digest)

Foreign trade progress reported in 1996

KYIV - Ukrainian exports grew by 21.5 percent in 1996, reaching $18.6 billion U.S., while imports grew by 17.6 percent, reaching $19.4 billion (U.S.), according to the Ministry of Foreign Economic Relations. The results made for a trade deficit last year of $809 million U.S., which was 32.7 percent less than in 1995. In other news, the proportion of foreign barter deals dropped from 31 percent to 20 percent last year, and state budget revenue from foreign trade met its target by 117 percent. Last year retail domestic trade turnover was 11.4 percent less than in 1995, at $15.7 billion hryvni. The share of the state sector in retail trade fell to 19.7 percent last year, compared to 30.4 percent in 1995. (Infobank)

Minimum wage increased in Ukraine

KYIV - Ukrainian lawmakers voted to increase the minimum monthly wage from 15 hryvni ($8) to 70.9 hrv, Ukrainian and international agencies reported on February 6. Labor Minister Mykola Biloblotskyi warned the move would cost the state budget 32 billion hrv this year. The average monthly wage for Ukraine's industrial workers is now 157 hrv. Meanwhile, around 2,000 Ukrainian teachers gathered in downtown Kyiv to demand up to nine months' back pay. The state owes university and school teachers 260 million hrv. The teachers threatened a national strike if the government does not abandon its plans this year to decrease budget expenditures on education by one-third. (OMRI Daily Digest)

Ukraine boosts trade with Iran

KYIV - Ukraine has won Iranian industrial orders worth $52 billion after a weeklong visit by an Iranian delegation headed by the country's industry minister, Reuters reported on February 9. Teheran ordered metallurgy products worth $26.5 million and railway locomotives and carriages worth $25.5 million. Kyiv officials said Ukraine wants to buy Iranian oil and gas to ease its dependency on Russian imports, but because of a shortage of pipelines and terminals, the deal has not been signed. Ukrainian Foreign Affairs Minister Hennadii Udovenko said that Ukraine, in trading with Iran, would not violate international restrictions. He complained of excessive speculations on Ukraine's ties to Iran. (OMRI Daily Digest)

Estonia, Ukraine agree on social issues

TALLINN - Government delegations in Tallinn on February 7 initialed an agreement that would allow residents of both countries, even if they relocate to the other country, to continue receiving pensions, child support, medical services and compensation for work-related accidents, ETA reported. Another agreement on mutual recognition of certification of goods was also initialed that day. Trade volumes between the two countries increased by 171.4 percent in 1996 compared to 1995, due primarily to the implementation of a free trade agreement in March 1996. The agreements are to be signed during Prime Minister Tiit Vahi's visit to Kyiv and will go into effect after ratification by both parliaments. (OMRI Daily Digest)

Pro-Russian group blasts Crimean Tatars

KYIV - The Russian Society of Crimea has claimed that the Crimean Tatar Assembly's recent appeal to the Ukrainian and Crimean authorities is "dictated by the desire to gain political privileges in accordance with ethnic origin," UNIAN reported on February 8. Tatars leaders are collecting signatures to the appeal in order to draw attention in Ukraine and abroad to problems encountered by Tatars returning to Crimea after the mass expulsion in the 1940s. The Russian Society said that, as a result of their actions, the Crimean Tatar leaders could aggravate interethnic tensions on the peninsula. It urged the Ukrainian president and Verkhovna Rada "not to be under the thumb of the [Crimean Tatar Assembly] and not to divide citizens into natives and non-natives." (OMRI Daily Digest)

Copyright © The Ukrainian Weekly, March 9, 1997, No. 10, Vol. LXV

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