Congressional hearings focus on U.S. foreign aid for 1999 (04/12/98)

Congressional hearings focus on U.S. foreign aid for 1999

by Michael Sawkiw, Jr.
Ukrainian National Information Service

WASHINGTON - As the legislative process speeds ahead in anticipation of U.S. congressional elections this November, several hearings have already been held in Washington concerning U.S. foreign assistance for Fiscal Year (FY) 1999, in particular assistance to the new independent states (NIS).

The Foreign Operations Subcommittee of the House of Representatives Appropriations Committee convened a public witness hearing, the latest hearing on foreign assistance on Tuesday, March 31. Under the chairmanship of Rep. Sonny Callahan (R-Ala.), this subcommittee is responsible for appropriating U.S. government funds for programs around the world that uphold America's commitment to democracy-building and economic development.

The public witness hearing offers groups an opportunity to testify on a broad range of issues and topics. The only witness speaking on behalf of the Ukrainian American community was Michael Sawkiw Jr., director of the Ukrainian National Information Service (UNIS), the Washington bureau of the Ukrainian Congress Committee of America (UCCA), who appeared before the Foreign Operations Subcommittee and offered his opinion regarding continued U.S. assistance to Ukraine. In his testimony, Mr. Sawkiw provided the members of the subcommittee an analysis of Ukraine's recent macro-and micro-economic reform efforts, as well as the democratic principles instilled within the country, as evidenced by the parliamentary elections held several days earlier on March 29.

Mr. Sawkiw stressed the importance of the U.S.-Ukraine strategic partnership and the improved bilateral relations between the two countries. "The crucial question at this juncture is: who will lend Ukraine a helping hand - the West or the East? The future or the past?" asked the UNIS director as he quoted an appeal from Ukraine's Jewish leaders to members of Congress as the congressmen begin their lengthy deliberations on foreign assistance programs.

When addressing the subcommittee chairman, Mr. Sawkiw made "an urgent plea to Congress, not merely on behalf of the Ukrainian American community, but on behalf of U.S. businesses seeking to operate in Ukraine: in FY 1999 give Ukraine the necessary tools with which to construct a private sector and business economy governed by the rule of law. Chairman Callahan responded by acknowledging that Ukraine has always been considered the "shining star" of the former Soviet republics, and "we have done everything to help you in this regard."

Corruption, however, was foremost on the chairman's mind as he provided examples of American investors who have experienced difficulties in their business operations in Ukraine. "Something has to change in Ukraine, or it will be disadopted ... we hope for improvement in Ukraine," stated Chairman Callahan. In response to the chairman's concerns, Mr. Sawkiw reiterated that Ukraine, independent for only seven years, is not fully capable of addressing these complicated issues, which Ukraine inherited from the Soviet system.

Indeed, improvement must be accomplished in Ukraine in order for Ukraine to move ahead in its economic reform. And, Mr. Sawkiw stressed that the benefit of assistance and support to Ukraine is limitless. "Let us think of U.S. foreign assistance to Ukraine as an investment with a strategic partner in a safe, stable and secure democracy in central Europe," stated the UNIS director as he appealed for assistance programs for Ukraine that would boost its economic development, primarily in the fields of agricultural privatization, energy-sector restructuring and commercial law reform.

In prior testimony before the subcommittee, Joseph Lemire, president of Gala Radio in Ukraine, and Mark Kalenak, director of the American Chamber of Commerce in Ukraine, expressed their dissatisfaction with current business environment in Ukraine. Mr. Lemire stated that Ukrainian officials consistently have harassed him and his employees. With a Ukrainian economic delegation due to arrive in Washington just days following the House subcommittee hearing, Mr. Lemire noted that "the delegation will argue that things are getting better in Ukraine," but, according to Mr. Lemire, that is not the case.

Both Chairman Callahan and Rep. Nancy Pelosi (D-Calif.), ranking member of Foreign Operations Subcommittee, underscored the importance of increased pressure on the government officials to resolve these problems, but fell short of condemning Ukraine or threatening to cut off assistance. "No way can we cut off assistance to get some results," stated Rep. Pelosi in her remarks. Chairman Callahan also offered his opinion on the present conditions in Ukraine to say: "I am sick of Ukrainians abusing businesses, and I am at a loss as to what this committee can do." However, Rep. Callahan did suggest that cutting assistance to Ukraine would not be advantageous, since Ukraine is considered to be a strategic American ally.

In conclusion Mr. Sawkiw thanked the chairman and his subcommittee for their support of Ukraine in the past several years, and stated that he looks forward to continued cooperation between the Ukrainian American community and the Foreign Operations Subcommittee.

In a similar hearing held on March 26, by the International Relations Committee of the House of Representatives, Ambassador Richard Morningstar, special adviser to the president and secretary of state on assistance to the NIS, and Donald Pressley, acting assistant administrator for Europe and the NIS at the U.S. Agency for International Development (USAID), appeared before the committee to review the assistance programs of the U.S. government in Russia, Ukraine and other NIS countries.

Rep. Benjamin Gilman (R-N.Y.), committee chairman, and a long-time staunch advocate of Ukraine, opened the proceedings by highlighting the importance of sustained U.S. assistance to Ukraine. "Now we [the International Relations Committee] understand that the administration is considering cutting aid to Russia's neighbor, Ukraine, over issues involving mistreatment of American investors," stated Chairman Gilman as he acknowledged the sensitivity of the business disputes in Ukraine.

Yet he strongly urged that cutting assistance to Ukraine would undermine Ukraine's Westward-leaning tendencies.

As the chairman continued his remarks, Rep. Gilman listed Ukraine's most recent and important international contributions toward safety and stability: dismantling its nuclear weapons, signing a charter with NATO, refraining from commerce with rogue states, including Ukraine's refusal to supply turbines for a nuclear power station in Iran. However, the chairman was very frank when questioning the witnesses' arguments that cutting assistance to Ukraine "will change the Ukrainian government's position" and he wanted an explanation of the administration's decision on the future course of U.S.-Ukrainian relations.

Following his prepared oral remarks, Ambassador Morningstar proceeded to address the concerns of Chairman Gilman. "The problem we have is with Congressional language," stated Mr. Morningstar, referring to the language adopted in last year's foreign appropriations bill, which stipulates that half of the foreign assistance appropriated to Ukraine ($225 million) would not be delivered to Ukraine unless the resolution of business disputes has shown significant progress. The ambassador stipulated that he has no choice but to obey the law (as passed by Congress) and spends "nearly half my time dealing with the resolution of these problems [in Ukraine]."

Mr. Pressley accentuated the programs that USAID administers in the newly independent countries once part of the Soviet Union. For example, Mr. Pressley stated that USAID's Partnership for Freedom (PFF) program is "still unfolding and means reaching beyond governments and going into the localities." The focus of the PFF program is to "strive for the day when these nations are fully integrated into the West, but our greater goal is to keep the process alive," stated Mr. Pressley as he explained aspects of PFF programs in the NIS.

Rep. Lee Hamilton (D-Ind.), ranking member of the International Relations Committee, focused his attention on the recent developments in Russia regarding the firing by President Boris Yeltsin of his entire Cabinet. Furthermore, Rep. Hamilton stated that "what I see is that Russia is the key country [in that area]." Quoting per capita assistance programs to the NIS, Rep. Hamilton argued that U.S. foreign assistance is "skewed away from Russia and that is not the right priority. Our entire aid program is skewed against Russia." In response to these comments, Ambassador Morningstar stated that "I couldn't agree with you more" and that the U.S. government "needs to do whatever it can to help in the transition to market reform in Russia."

One of the co-chairs of the Congressional Ukrainian Caucus, Rep. Jon Fox (R-Pa.), who is also a member of the International Relations Committee, had an opportunity to question the witnesses regarding assistance programs in Ukraine. The positive reforms which Ukraine has undertaken in the past year were Rep. Fox's main focus as he attempted to portray assistance to Ukraine as "the intent of supporting reform efforts in a wide variety of issue areas ... Reform in each area is vitally important in continuing Ukraine's transition to a stable parliamentary democracy with a free-market economy."