G-7 earmarks $300 M for Chornobyl at Summit of the Eight in Denver (07/06/97)

G-7 earmarks $300 M for Chornobyl at Summit of the Eight in Denver

by Odarka Figlus
Special to The Ukrainian Weekly

DENVER - The heads of state of the Group of Seven, Russia and observers from the European Union met here for the Summit of the Eight on June 20-22.

On June 22 the leaders of the G-7, the world's leading industrial countries, and representatives of the European Union met without Russia's participation to discuss global economic and financial challenges.

Ukraine figured prominently in these talks. In a strongly worded statement, the G-7 encouraged Ukraine to tackle the challenges of re-invigorating economic reform and creating a more welcoming environment for foreign investors.

The statement emphasized that Ukraine's progress in implementing reforms is crucial to gaining access to promised financial assistance, and warned that without improvement in the legal standing and treatment of investors, the private business sector will not develop, and reform will fail.

On the topic of Chornobyl, the G-7 reaffirmed their commitment to assist Ukraine in raising funds for energy projects to help meet its needs after the closing of the nuclear energy station.

Recognizing that securing the environmental safety of the sarcophagus covering the destroyed reactor is beyond the means of Ukraine alone, the G-7 has agreed to contribute an additional $300 million over the lifetime of the project, which is expected to take eight to 10 years. These funds are in addition to the commitments made in the 1995 Memorandum of Understanding with Ukraine on Chornobyl Closure. Ukraine will be expected to contribute $100 million-150 million. A special conference is planned for the fall to raise additional funds.

The summit was augmented by a series of bilateral talks. In their meeting, President Bill Clinton and Russian President Boris Yeltsin discussed issues including Mr. Yeltsin's health, agreements with Ukraine regarding the Black Sea Fleet, arms control, economic reforms, religious freedom and Russia's accession to the Paris Club.

The Paris Club restructures the debt of developing countries to major creditor states and includes almost all of the world's major industrialized countries. Russia will adjust its debt claims of $120 billion on developing countries by 30 percent to 80 percent prior to joining the Paris Club. This reflects the fact that much of the debt was Cold War military debt. This arrangement also takes the difficulties of valuing Soviet-era claims into account.

Once Russia joins the Paris Club and becomes part of the international effort to reduce debt further, as much as 90 percent to 95 percent of debt will be written off for some of the poorest countries.

Accession to the Paris Club provided a big boost for President Yeltsin's prestige, as it increases Russia's acceptance in the international financial community. A U.S. spokesmen heralded the agreement as the end of the financial Cold War.

At the summit much of the attention was focused on Russia and making President Yeltsin look and feel good, perhaps to pacify Russia over the expansion of NATO.

Russia had attended previous summits as an observer, but the Denver summit marks the first time that Russia participated in most of the discussions.

Mr. Yeltsin was accorded the honor of giving the opening speech of the conference. However as yet, Russia does not have the financial standing to be included in the G-7 discussions of economic and financial issues.

The annual summit gives world leaders the opportunity to become acquainted and to discuss a broad range of topics in a private setting. The G-7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States.

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