Kuchma-Gore Commission meets in Kyiv, U.S. focuses on economic reform program (10/26/97)

Kuchma-Gore Commission meets in Kyiv, U.S. focuses on economic reform program

by Roman Woronowycz
Kyiv Press Bureau

KYIV - After a series of meetings in Kyiv lasting two days, the leader of the U.S. team on the Kuchma-Gore Commission said on October 22 that for Ukraine the key to finishing economic reforms lies in privatization, the energy sector and agriculture.

Richard Morningstar, U.S. special ambassador to the CIS countries, said Ukraine finally is talking about an economic reform program that the United States thinks will be effective. "I have never been more confidant that we are speaking the same language and that we agree what the critical issues are," said Mr. Morningstar, speaking to reporters.

Maintaining a very positive tone, he listed the most important remaining issues confronting Ukraine in its molasses-like move towards a free market system, such as: continued privatization, and energy and agriculture sector reform. He said Ukraine must deregulate the energy and agricultural sectors and that privatization must be completed. Without those moves, he said, small and medium-sized business development would be difficult. He added that Ukrainian officials are in agreement. "I think we finally have a basis on which to cooperate," said Mr. Morningstar.

Diplomats from both countries met in Kyiv on October 21-22 to continue the work of the U.S.-Ukraine Binational Commission, commonly referred to as the Kuchma-Gore Commission, whose mission is to maintain a dialogue between the two countries on issues regarding economic cooperation, trade and investment, security and foreign policy. The commission was established in September 1996 and has met three times since then. The first and only session of the entire commission was convened on May 16 in Washington with both Ukraine's President Leonid Kuchma and U.S. Vice-President Al Gore in attendance.

Mr. Morningstar said after the Kyiv meeting - the second time the commission has met here - that a major portion of the talks were dedicated to discussing macroeconomic targets for the economy as a whole, as well as on the importance of deregulation of the energy and agricultural industries in Ukraine.

Ukraine's Minister of Economic Reform Serhii Tyhypko agreed that the meetings were a success, and announced the formation of a special committee to monitor Ukraine's macroeconomic indicators and to analyze foreign markets for securities.

Since 1990 the U.S. has given almost $1.5 billion in technical aid to Ukraine, more than any other country in the world, a point that Mr. Tyhypko stressed. That money has gone to a variety of projects from humanitarian aid, energy conservation projects and housing construction, to democracy education, student exchanges and the Peace Corps of Ukraine, which has around 200 volunteers and is the second largest U.S. Peace Corps contingent in the world.

Mr. Morningstar said the fountain of aid has not yet run dry. "There are additional monies forthcoming," he explained.

Although both parties spoke glowingly about the level of understanding and agreement between them, a dissonant note appeared when the group turned to the issue of business investment.

Mr. Tyhypko announced at the press conference that "the problems of business investors have decreased," referring to dozens of complaints that U.S. investors doing business in Ukraine have filed with the Kuchma-Gore Commission. Mr. Morningstar did not allow that remark to go without comment. He explained that the most controversial cases have yet to be resolved.

"We have about five cases with major issues yet to be resolved," said Mr. Morningstar. "It is important to show that business problems can be resolved and that Ukraine is a good place for doing business."

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