Pavlo Lazarenko visits Canada to do some PR damage control (06/22/97)

Pavlo Lazarenko visits Canada to do some PR damage control

by Christopher Guly

OTTAWA - When introducing Prime Minister Pavlo Lazarenko of Ukraine to the Parliament Hill reporters in Ottawa on June 13, Prime Minister Jean Chrétien inadvertently stumbled when explaining what the two leaders talked about in their private one-hour meeting. "We talked about the Chernomyrdin problem," said Mr. Chrétien, before quickly correcting himself. "I mean we talked about the Chornobyl problem."

For Prime Minister Chrétien, the gaffe could have put a chill in Canada-Russia relations, because of the reference to Russia's prime minister, Viktor Chernomyrdin. For Prime Minister Lazarenko, the remark was the least of his worries, particularly in light of Ukraine's May 28 historic accord with its neighbor on the division of the Black Sea Fleet.

Ukraine's PM, on his first official visit to Canada, was greeted with a barrage of media attention on allegations of corruption in Ukraine.

On the eve of his June 12 arrival in Ottawa, Canada's national daily newspaper, The Globe and Mail, ran a front-page story in which Mr. Lazarenko granted an interview with Kyiv correspondent Geoffrey York. In the story, a Canadian businessman who wrote to the Canadian mission in Kyiv complained that "bureaucratic interference in the normal day-to-day operations of commercial enterprises is slowly strangling the investment community."

Mr. Lazarenko, a former Soviet state farm boss believed to be among Eastern Europe's wealthiest, acknowledged that graft and bribery remain major problems facing Ukraine. However, he denied allegations that he or any senior government workers have contributed to his country's corruption problem.

The New York Times reported in April that Ukrainian officials had reaped hundreds of millions of dollars in profit last year by buying Ukraine's grain harvest at artificially low state prices and selling it at higher international prices. "I want concrete facts, not rumors," Mr. Lazarenko told Mr. York.

In Ottawa, the 44-year-old Ukrainian prime minister tried to sidestep similar questions on high-level corruption. "It's not true," said Mr. Lazarenko, in the foyer outside the House of Commons.

The prime minister's five-day visit to Canada was meant to secure the growing business partnership between Ukraine and Canada. Appointed to his current post by President Leonid Kuchma last year, Mr. Lazarenko's job hasn't been easy.

The day before arriving in Ottawa, the prime minister had to convince Ukraine's Verkhovna Rada to approve the acceptance of $70 million ($50 million U.S.) of credit from Canada to purchase Canadian imports. Canadian businesses have already invested about $600 million ($429 million U.S.) in Ukraine since the country declared independence six years ago.

But Prime Minister Lazarenko didn't come to Canada to talk politics. "Having achieved political reform," he said, "we are now working on economic reform." On this front, he recently received a boost from Prime Minister Chrétien's government, which persuaded Prime Minister Lazarenko to personally intervene in completing a $150 million ($107 million U.S.) deal by Ontario-based Northland Power to renovate an electrical plant near Kyiv - five years after negotiations began.

Despite Ukraine's image as a lagging economy, Ukrainian Canadian businesswoman Oksana Bashuk Hepburn said that Mr. Lazarenko has done much to improve the foreign entrepreneurial climate in his country. "He's doing a great deal to level the playing field for all businesspeople by focusing on privatization."

While in Ottawa, Prime Minister Lazarenko also attended a state dinner in his honor at the National Gallery of Canada, laid a wreath at the War Memorial and addressed members of the National Press Gallery.

From the nation's capital, Mr. Lazarenko went on to Winnipeg, where he met with Foreign Affairs Minister Lloyd Axworthy, who visited Ukraine last October.

On June 15 the Ukrainian prime minister attended the second meeting of the Ukraine-Canada business and trade alliance, the Intergovernmental Economic Commission, in Calgary. The following day, he participated in the Canadian-Ukraine Business Initiative (CUBI '97), a private-sector conference involving over 200 Canadian and Ukrainian businesspeople, also in Calgary. Supported by the governments of Canada, Ukraine, Alberta, Saskatchewan and Manitoba, CUBI's focus is on three priority sector areas: oil and gas, agriculture, and construction and building products.

Prime Minister Lazarenko was accompanied on his visit to Canada by over 100 Ukrainian businesspeople and his deputy prime minister, Mykhailo Zubets, who visited Regina on June 17 and Prince Edward Island on June 18.

"I consider it a priority to learn from Canada's wealth of experience in foreign and international trade matters," said Mr. Lazarenko. "Canada's approach parallels Ukraine's principal objective of achieving full economic independence through the expansion and diversification of its foreign economic activities and trade."

Already, Ukraine's prime minister has learned the Western art of getting the right message across.

According to The Globe and Mail, Mr. Lazarenko's government hired a U.S. public-relations firm on a six-month, $171,000 (U.S.) contract to polish his image. In Ottawa, meantime, the Ukrainian Embassy enlisted the services of a PR firm, Hill and Knowlton Canada Ltd., to ensure that Mr. Lazarenko's message to Canadian companies offset some of the rumors that Ukraine was open for business, not closed, because of corruption.

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