Lazarenko takes his sales pitch to Canada-Ukraine business conference (06/29/97)

Lazarenko takes his sales pitch to Canada-Ukraine business conference

by Marco Levytsky
Ukrainian News

EDMONTON - Ukrainian Prime Minister Pavlo Lazarenko took his sales pitch to Canada on June 12-16 in a bid to further investment and trade between the two countries.

Over 150 business and government leaders accompanied Mr. Lazarenko on this visit and remained throughout the Canada-Ukraine Business Initiative '97 Conference (CUBI '97), which began with a general session in Calgary June 16 and continued with sectoral sessions in Calgary (oil and gas), Regina (agriculture) and Winnipeg (construction).

How much new investment this visit and CUBI '97 will bring remains to be seen. Prime Minister Lazarenko himself cited a figure of $860 million to 900 million (Canadian) during an interview with The Winnipeg Free Press.

At the second session of the Canada-Ukraine Intergovernmental Economic Commission (ICE) held in Calgary on June 15, three investment agreements were signed, but one was the finalization of a previous agreement signed in Kyiv and included among the $600 million of Canadian investment projects announced during Canadian Foreign Minister Lloyd Axworthy's October 23-24 visit to Kyiv, while the other two did not have exact dollar figures at this time.

Calgary-based TransCanada International Pipelines Ltd. signed an Agreement of Intent with UkrGazProm to upgrade and reconstruct gas transmission pipelines in Ukraine, but specific projects have not yet been identified.

The Memorandum of Understanding signed between Brampton-based Commercial Alcohols and the State Committee on Oil and Gas and Oil and Gas Processing and the State Committee on Energy Conservation could lead to capital investments of $300 million to $500 million depending upon how many plants are constructed. The agreement provides for the development of alternate fuels in Ukraine - particularly ethanol.

A previous deal, the $150 million joint venture agreement between Toronto-based Northland Power Inc., the State Property Fund of Ukraine and the Darnitsia Workers Collective to modernize and expand a district heat and power plant in Kyiv, was finalized during Mr. Lazarenko's visit.

In addition a new air transport agreement between Canada and Ukraine was concluded. It will permit, for the first time, scheduled air services to be operated between the two countries. The groundwork for this, too, had been laid during Minister Axworthy's Kyiv visit.

There are also several other investment projects that are near agreement.

One of these is a joint venture between Regina-based Lateral Vector Resources Ltd. and Ukraine's national joint stock oil company, UkrNafta, to develop the Buhrevativsky oil field in Sumy Oblast. A feasibility study has put that project's cost at $150 million.

Another is a $30 million deal that will see four-wheel-drive tractors from Winnipeg's Versatile Farm Equipment plowing fields in Ukraine. Mr. Lazarenko told The Free Press he expects that agreement to be concluded within weeks.

In Calgary Mr. Axworthy also announced that the Canadian government will grant Ukraine $500,000 to continue the judicial reform project and will allocate another $3.5 million for Kyiv's Technical Assistance Program Advisory Fund, which will be used to reform such areas as taxation mechanisms, financial management, energy and agriculture.

During public appearances and interviews in Ottawa, Winnipeg and Calgary, Prime Minister Lazarenko said that, after six years of decline, Ukraine's economy should turn around by the end of this year and start registering growth in 1998.

Speaking at the IEC in Calgary, he pledged that his government will work to improve the investment climate by streamlining the bureaucracy and reducing taxation.

However, he admitted that the current Verkhovna Rada is an obstacle to reform. "We don't have a structured parliament. Today the government needs a majority that would support the government in its reforms," he said.

He said the work of the IEC will go a long way towards improving cooperation. "I believe that today's meeting will enable us to make a statement that the environment in Ukraine will be conducive to investors," he said. "No matter how many problems we have to resolve, we will be able to change the situation radically."

The IEC, which was created during Canadian Foreign Affairs Minister Lloyd Axworthy's visit to Ukraine last October, is designed both to identify specific projects and sectors of interest for Canada-Ukraine economic cooperation, and to act as a forum to raise issues related to development. The three sectors which currently make up the IEC are oil and gas, agriculture and construction.

The IEC, which held its inaugural session in Kyiv during Mr. Axworthy's visit, has representatives of government and business from both countries and is chaired by ministers. This session, which was held to precede the Canadia-Ukraine Business Initiative '97 Conference, was chaired by Foreign Minister Axworthy and by Ukrainian Deputy Prime Minister and Agriculture Minister Mykhailo Zubets.

Both at the Calgary meeting and in an interview with The Free Press, Mr. Lazarenko stressed the need to develop a middle class in Ukraine. "We have a class of rich people and poor people but unfortunately we don't have a middle class," he said. "The task now is to create this middle class."

In Ottawa, Mr. Lazarenko attended a banquet in his honor at the National Art Gallery. He left the following day for Winnipeg where he was greeted that night with bread and salt and a hero's welcome from the province's 160,000-strong Ukrainian community

During a reception at the Lombard Hotel, featuring performances by the Oleksander Koshetz Choir and the Rusalka Dancers, Minister Axworthy toasted the close ties Canada and Ukraine have forged since the country declared its independence in 1991.

The next morning Prime Minister Lazarenko held a breakfast reception with the Ukrainian community at which the Ukrainian Canadian Congress transferred the title to the Ukrainian Ambassador's Residence in Ottawa, which was purchased through funds raised by the Ukrainian community in Canada, to the government of Ukraine.

From there, Mr. Lazarenko flew to Calgary and was whisked away by motorcade from the airport to the Rocky Mountain resort of Lake Louise for where he spent the evening. He arrived back in Calgary the following day at the closing of the IEC session.

Following the IEC, he was taken to the Palliser Hotel, where he met with Saskatchewan Premier Roy Romanow, Alberta Premier Ralph Klein and Manitoba Premier Gary Filmon in three separate, one-on-one half-hour sessions.

Following his meeting with Mr. Lazarenko, Premier Klein held a briefing for reporters in which he said the Ukrainian prime minister was most interested in the oil and gas sector. "If he emphasized one area, it was this area and mostly it pertains to technology. I told him we had some of the best technology anywhere in the world," he said.

Another banquet was held that evening, this time at the Calgary Convention Center. It was attended by the 320 delegates. Speaking at the banquet Mr. Lazarenko said CUBI '97 "is a significant event in enhancing our bilateral relations, and our economic and political ties. This is exactly the type of initiative to strengthen the business relations between our two countries."

He added that he was gratified by the very positive response he had received during his meetings with Canadian government and business leaders. "Ukraine has always paid significant attention to its relations with Canada," he said. "Canada was the first country to recognize Ukraine's independence, and for the past five years, it has consistently put forward Ukrainian interests in the international arena."

He added, "Today's conference is a great opportunity to escalate the economic ties between Canada and Ukraine. With he help of the private sector and Canadians of Ukrainian descent, we will be able to further enhance the ties between the two countries."

Premier Klein said he was delighted to host the conference and recalled raising the flag to mark Ukraine's independence while he was mayor of Calgary "long before independence came. I am very pleased that the day has arrived."

"Albertans are very proud and excited by the prospect of building our existing relationship with Ukraine in the areas of legislative co-operation, health, energy, forestry and agriculture," he said.

Security during the visit of Prime Minister Lazarenko, who was the object of an assassination attempt in Kyiv last summer, was much tighter than during the visit of President Leonid Kuchma in October 1994. During the Kuchma visit, media liaison for the federal government was handled by the Department of Foreign Affairs. This time it was the Royal Canadian Mounted Police.

Marco Levytsky is editor of Ukrainian News, a biweekly newspaper published in Edmonton.

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