NEWSBRIEFS (09/21/97)

NEWSBRIEFS

Ombudsmen to help foreign investors

KYIV - Ukraine has set up a Chamber of Independent Ombudsmen to help mediate disputes between foreign investors and government offices, UNIAN reported on September 12. The new body includes specialists on Ukrainian and international law, and representatives of consulting firms, whose task is to help resolve disputes and make recommendations to the government and president. Roman Shpek, head of the new chamber and chairman of the National Agency for Reconstruction and Development, told journalists that Ukrainians must understand there is a serious problem with attracting foreign investment to their country. He estimated that Ukraine has attracted only $1.6 billion in foreign investment during the past six years - less than neighboring Romania. (RFE/RL Newsline)

Ukraine seeks CEFTA membership

KYIV - Prime Minister Valerii Pustovoitenko has agreed with the Central European Free Trade Association on a plan for Ukraine's entry into the organization, Ukrainian Minister of Foreign Economic Relations and Trade Serhii Osyka told Interfax-Ukraine on September 14. Ukraine's membership in the Central European Free Trade Association (CEFTA) was discussed at the annual meeting of leaders of CEFTA member-states in Postorozh, Slovenia, at which Mr. Pustovoitenko was present as a guest. Before being admitted to CEFTA, Ukraine must join the World Trade Organization and sign free-trade agreements with all CEFTA countries. CEFTA's founders are Hungary, Poland, the Czech Republic, Slovenia and Slovakia. Following talks between Mr. Pustovoitenko and CEFTA leaders, it was announced that Hungary and Ukraine would sign an agreement on trade liberalization in November. Meanwhile, Poland and Slovakia plan to complete talks with Ukraine on trade liberalization by late 1997, and Slovenia is ready to sign a free trade agreement with Kyiv in 1998. (RFE/RL Newsline, Eastern Economist)

Pustovoitenko visits Moscow

MOSCOW - During his first visit to Moscow as Ukraine's prime minister, Valerii Pustovoitenko announced that "Russia is unquestionably Ukraine's strategic partner." Mr. Pustovoitenko met with Russian President Boris Yeltsin, who said there are "no large intractable problems" between the two countries. Statements by Russian officials, however, indicate some problems still exist. Following his meeting with Mr. Pustovoitenko, Russian Prime Minister Viktor Chernomyrdin said turnover in trade between the two countries in the first half of 1997 was $7.7 billion, down 22 percent from the same period last year. No solution was found to the issue of Ukraine's debt to Russia for gas supplies. Russian presidential spokesman Sergei Yastrzhembskii told reporters that Moscow has no intention of buying Soviet-era Tu-160 and Tu-95MS strategic bombers from Ukraine. One of the topics at the top of the Ukrainian prime minister's agenda was the export of sugar from Ukraine to Russia. Mr. Pustovoitenko urged President Yeltsin to remove a 25 percent tax imposed on sugar imports last May and a 10 percent value-added tax levied in the summer, which he said are "seriously slowing down Russian-Ukrainian cooperation." In the past, Ukraine annually exported between 1.1 million and 1.3 million tons of sugar to Russia, but this year's contracts provide for only 600,000 tons. According to Interfax, President Yeltsin promised to have Prime Minister Chernomyrdin look into the matter. (RFE/RL Newsline)

Ukrainian government submits budget

KYIV - The government on September 16 submitted the 1998 draft budget to the Verkhovna Rada, Reuters reported. The document provides for a deficit of 5.2 percent of gross domestic product. Two days earlier, a spokesman had said Prime Minister Valerii Pustovoitenko would not submit the draft to the Parliament until national deputies had made changes to various tax laws. The Finance Ministry said, however, that the draft budget is based on existing tax laws. Under the Constitution, the final budget must be passed by January 1, but the Verkhovna Rada did not approve the 1997 budget until June of this year. (RFE/RL Newsline)

Kuchma announces third stage of reforms

KYIV - President Leonid Kuchma told a group of directors of privatized and private agricultural enterprises on September 17 that a presidential decree had been signed on the transition to the third stage of reforms. According to Presidential Press Service Chief Serhii Kutsyi, Mr. Kuchma said the third stage would involve reform of the organizational structure of collective enterprises through privatization. For their part, the directors expressed dissatisfaction with the delay in agriculture sector reforms and said they had to be accelerated. (Eastern Economist)

World Bank VP meets with Kuchma

KYIV - President Leonid Kuchma told visiting World Bank Vice-President Johannes Linn on September 15 that the WB was not making full use of its opportunities for cooperation with Ukraine. However, he underlined the importance Ukraine places on cooperation with all international financial institutions. Following the meeting, Presidential Economic Advisor Viktor Lytvytskyi commented that WB credits worth $1 billion (U.S.) for structural reforms in Ukraine for 1997 had not been used. Mr. Lytvytskyi said it is necessary to discuss all the WB's projects in Ukraine in order to define priorities. There are currently 30 such projects operating and a further eight are planned. Mr. Lytvytskyi said that, during the meeting, Mr. Kuchma stressed that this year state contracts had been reduced to the minimum and that the Cabinet of Ministers intends to cancel them completely next year. Mr. Lytvytskyi also reported that the WB had refused to disburse the latest tranche of the loan for coal industry restructuring since the Cabinet had not been able to provide funds from the state budget to top up the loan. He added that an IMF delegation is to arrive in Ukraine next week to discuss problems that have arisen between Ukraine and international financial organizations. While Mr. Linn insisted that WB funds were not to be used for paying off back wages, he did discuss the possibility of new projects for supporting social reforms. According to Mr. Lytvytskyi, the World Bank will release $500 million (U.S.) by the end of the year for implementation of projects for financing the coal, energy and agriculture sectors, if all conditions are fulfilled. Mr. Linn also met Prime Minister Valerii Pustovoitenko, National Bank of Ukraine Chairman Viktor Yuschenko, Finance Minister Ihor Mitiukov and Economy Minister Viktor Suslov. (Eastern Economist)

Chornobyl council of experts to be set up

KYIV - President Leonid Kuchma signed a decree on September 10 to create a presidential consultation council of independent experts to resolve issues concerning the Chornobyl nuclear power plant. The main task of the council will be to prepare and submit to the president for consideration proposals to eliminate the consequences of the Chornobyl catastrophe and resolve issues concerning the plant. National Academy of Sciences President Borys Paton was tapped to chair the 19-member council. (UNIAN, Eastern Economist)

United files complaint against Aeroflot

WASHINGTON - United Airlines has filed a formal complaint with U.S. aviation authorities against Aeroflot in a bid to have the Russian carrier banned from landing in Washington, Chicago and San Francisco, U.S. news media reported on September 9. The U.S.-based airline said it filed the complaint after Russian officials disallowed United Airlines-Lufthansa flights to Moscow despite a 1993 agreement between Russia and the U.S. that allowed such cooperative flights. United Airlines also said Russia rejected an application to use a recently established air route over Russia's Far East. Cyril Murphy, United Airlines vice-president for international affairs, said Russia's actions are damaging not only to U.S. airlines but also to Russian ones. (RFE/RL Newsline)

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