Kuchma welcomes U.S. certification of Ukraine (02/28/99)

Kuchma welcomes U.S. certification of Ukraine

by Pavel Polityuk
Special to The Ukrainian Weekly

KYIV - President Leonid Kuchma welcomed last week's declaration by U.S. Secretary of State Madeleine K. Albright that Ukraine is continuing radical economic reforms and has made significant progress.

"The United States in general understands Ukraine's role in the region - a strategic partnership was not declared without reason," Mr. Kuchma told reporters outside Kyiv.

But U.S. Ambassador to Ukraine Steven Pifer said disappointment with slow economic reforms and the investment climate was part of the reason for the decline in U.S. aid to Ukraine from $225 million for 1998 to $195 million for 1999.

"The secretary's decision in this case was not an easy one," Mr. Pifer said on February 19, adding that four out of a list of investor complaints had been more or less resolved, but that much more work remained on others.

"There is a very strong belief in Washington that the Ukrainian government can and should do more in terms of economic reform and in terms of resolution of those particular investor problems," Ambassador Pifer said.

President Kuchma's economic advisor Valerii Lytvytskyi said Ukraine had no serious doubts that Secretary Albright could report progress in Ukrainian economic reforms because a series of presidential economic decrees and the Parliament's approval of the state budget for 1999 have created a new economic situation in the ex-Soviet country.

"We have indeed made significant progress in economic reforms," Mr. Lytvyskyi said.

Ukrainian and foreign analysts and officials said the complaints of American investors were at the heart of the certification problem.

Ambassador Pifer said he was encouraged by changes in the government's attitude towards investor complaints, which he said was demonstrated by the direct involvement, for the first time, of Prime Minister Valerii Pustovoitenko, his deputy, Serhii Tyhypko, and the head of the National Security and Defense Council, Volodymyr Horbulin.

Nine American companies had previously said they had problems doing business in Ukraine, but Ms. Albright's report said the Ukrainian government had resolved four cases, those of Freedom Farm International, Pioneer Hi-Bred, Cargill and Ceres Marine Terminals Inc.

Still unresolved are the complains of Gala Radio, R&J Trading, Perekhid Media, Lviv Grand Hotel and Alliant Kiev. The Kyiv daily Den (Day) reported on February 23 that Alliant Kiev has made a final decision to cancel its business in Ukraine and to leave the country.

But Mr. Litvitsky said the unresolved cases are the responsibility of the courts, not of the state.

The reaction of Ukrainian national deputies to the certification was not unexpected. Right-wing deputies remarked that the report would open doors for the Ukrainian government to get loans from international financial institutions such as the International Monetary Fund and the World Bank, while leftists said the West merely aims to protect the Kuchma regime.

"It was a positive event for Ukraine," said Vyachelsav Chornovil, leader of the Rukh Party.

"This money [$195 million] cannot resolve Ukraine's problems, but through it the U.S. aims to protect the existing political regime in the country," said Natalya Vitrenko, leader of the Progressive Socialist Party.

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