Yuschenko meets with officials of U.S. government and financial institutions (05/14/00)

Yuschenko meets with officials of U.S. government and financial institutions

by Yaro Bihun
Special to The Ukrainian Weekly

WASHINGTON - The head of Ukraine's new reformist government, Prime Minister Viktor Yuschenko, spent two days here on May 8-9 convincing the U.S. government and the international financial institutions headquartered here that Ukraine's reform programs are workable and deserving of their political and economic support.

During his first visit here since becoming prime minister, Mr. Yuschenko also devoted much of his time to re-establishing Ukraine's credibility following reports that its National Bank exaggerated by more than $700 million its currency reserve reports to the International Monetary Fund in 1997 and obtained some $200 million in credits it otherwise would not have received.

Mr. Yuschenko was optimistic as he left Washington, and those with whom he met seemed satisfied with what he had to say. His government received expressions of support and encouragement from President Bill Clinton, as well as the International Monetary Fund and the World Bank, but the latter two tempered their support with a dose of "wait-and-see."

A White House spokesman called Mr. Yuschenko's May 9 meeting with President Clinton "warm and productive." Foreign affairs spokesman Mike Hammer said the prime minister outlined the economic and other reforms his government plans to undertake in the coming months, especially in the energy and agricultural sectors as well as in protecting intellectual property rights.

"The president was very impressed and said he was very much looking forward to his upcoming trip to Kyiv," the spokesman said. President Clinton is scheduled to visit Kyiv on June 6.

"The president praised Yuschenko and Ukraine for the progress they have made in economic reform and encouraged him to continue their efforts at becoming better integrated into the rest of Europe," he said.

From the White House, Mr. Yuschenko motored two blocks up Pennsylvania Avenue to the headquarters of the IMF for a meeting with Managing Director Horst Koehler. The prime minister and his delegation had already met with the IMF's executive directors on the previous day, after which Ukraine's Finance Minister Ihor Mitiukov said he thought the IMF would consider renewing lending under its $2.6 billion Extended Fund Facility (EFF) credit program for Ukraine following its examination of the PricewaterhouseCoopers audit released on May 4, which confirmed earlier suspicions about the reporting irregularities of the National Bank of Ukraine.

Following the meeting with Mr. Koehler, however, it became evident that the IMF would wait until after it had a chance to study a second audit, covering an eight-month period preceding the one covered by the first report.

An IMF statement after the May 9 meeting said the auditors' report was discussed "with an emphasis on what remains to be done" before a decision is made about renewing lending to Ukraine.

Prime Minister Yuschenko characterized the meeting as "constructive." Every aspect of Ukraine's reform program was discussed, he said, "and it was interesting to note that practically on all issues there was mutual understanding about what is involved and what is needed to resolve them."

"We now see the road we must take, and we are ready to proceed down that road and its cooperative mechanisms," he added.

Asked if the EFF credits would be renewed, Mr. Yuschenko answered, "We are doing all this to have EFF renewed."

"The issue is currently working its way through a process that includes the receipt of the second audit report," Mr. Yuschenko said. Ukraine requested that this process be expedited, he explained, adding that he expects the process to be completed in June.

The IMF stopped its lending to Ukraine under the multi-year $2.6 billion EFF package last September, after Ukraine received $960 million of the total. Ukraine is said to sorely need another $900 million this year, most of which would go to repay the IMF's previous loans.

Prime Minister Yuschenko also had a meeting earlier in the day with World Bank President James Wolfensohn, who later said in a statement that he was "encouraged by the sense of determination" Mr. Yuschenko conveyed.

"We at the bank have high expectations for what his government can do for the people of Ukraine," Mr. Wolfensohn said.

He added: "I expressed a strong desire on our part to assist the government in its efforts to plan and implement its proposed economic and social program, but I also stressed that in determining continued World Bank support much will depend on tangible results in implementing the program - results that will create the basis for sustainable economic development in Ukraine."

Prime Minister Yuschenko's visit included talks with Secretary of State Madeleine K. Albright, with whom he discussed the conditions under which the Chornobyl nuclear power plant could be closed this year, among other issues.

He also met with Treasury Secretary Lawrence Summers, National Security Advisor Samuel Berger, as well as with U.S. Trade Representative Charlene Barshefsky. The talks with Ms. Barshefsky reportedly focused on the issue of respecting intellectual property rights, a growing concern in the U.S.-Ukraine economic relationship. Ukraine is mentioned as one of Europe's leading pirates of audiotapes, CDs, and computer programs.

The prime minister had a working breakfast with representatives of major U.S. companies interested in or already investing in Ukraine and had a number of meetings on Capitol Hill with U.S. lawmakers, including Sens. Mitch McConnell (R-Ky.) and Gordon Smith (R-Ore.), and members of the Congressional Ukrainian Caucus.

Mr. Yuschenko also had a chance to meet House Foreign Operations Subcommittee Chairman Sonny Callahan (R-Ala.) and others during a congressional reception organized by the NCSJ: Advocates on Behalf of Jews in Russia, Ukraine, the Baltic States and Eurasia and the Jewish Confederation of Ukraine.

He addressed the reception guests and listened to remarks by Foreign Affairs Committee Chairman Benjamin Gilman (R-N.Y.) and Helsinki Commission Chairman Christopher H. Smith (R-N.J.), who highlighted the importance of supporting reform in Ukraine.

Sen. Smith also pressed the G-7 to fulfill their pledge to provide assistance for the closure of Chornobyl and noted that the House of Representatives a few hours earlier had passed his "Trafficking Victims Protection Act" resolution. A similar measure is under consideration in the Senate.

During a reception at the Embassy of Ukraine on May 8, Prime Minister Yuschenko presented the Shevchenko Prize to the noted linguist and philologist Prof. George Shevelov and received from the Ukrainian Academy of Arts and Sciences in New York a collection of paintings by Volodymyr Vynnychenko. (See sidebar on page 8.)

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