Yekhanurov delegation in Washington for talks with IMF, World Bank (03/25/01)

Yekhanurov delegation in Washington for talks with IMF, World Bank

by Yaro Bihun
Special to The Ukrainian Weekly

WASHINGTON - A high-level Ukrainian government economic delegation, headed by First Vice-Prime Minister Yurii Yekhanurov, held talks at the International Monetary Fund and World Bank headquarters here, seeking the release of hundreds of millions of dollars in loans and credits for Ukraine.

The delegation, which included Finance Minister Ihor Mitiukov and National Bank of Ukraine Chairman Volodymyr Stelmakh, returned home on March 13, abruptly and with mixed results. They departed for Ukraine before a reception at the Embassy of Ukraine in their honor and another day of scheduled meetings and a news conference.

A spokesman explained that the curtailment of the visit had nothing to do with the way the talks were progressing. Some important things came up that required Mr. Yekhanurov's immediate attention, he said.

The ever-important negotiations with the IMF, including its director, Horst Koehler, did not end with an announcement about the release of the next tranche of the long-term IMF credit program for Ukraine.

The IMF suspended the credit program to Ukraine in 1999 when it learned that the National Bank of Ukraine had given the IMF inflated reports about its reserves. When independent audits showed no malfeasance, the program was resumed last December, but the $750 million loan program was suspended once again in March because, the IMF said, Ukraine was not following through on promised reforms.

A Ukrainian representative participating in the talks said that "nothing concrete" came out of the latest meetings, but there was "an understanding about where to go from here." He said that the IMF will soon send another mission to Ukraine to check on reform progress and that an IMF decision on releasing the next $190 million tranche is expected sometime in May.

The results were more positive at the World Bank, which, a bank spokesperson said, saw "tremendous" economic reform progress in Ukraine - enough to consider giving Ukraine a three-year $750 million adjustment loan.

Mr. Yekhanurov said the decision about the World Bank loan will be made by the bank's board of directors in early June. He said in an interview that, in the delegation's meetings with President James Wolfensohn and other World Bank officials, they reached an agreement on a $60 million loan package for administrative reforms, and initiated talks about an Internet expansion project in Ukraine and regional municipal infrastructure development projects in Kyiv, Lviv, Sevastopol and other cities.

The Ukrainian delegation also had meetings with the new treasury secretary, Paul O'Neill, and other U.S. officials, and on March 10 participated in the annual ceremony at the Taras Shevchenko monument in Washington.

The Yekhanurov delegation was not the only group of Ukrainian political personalities visiting Washington last week. As did Ukrainian Socialist Party leader Oleksander Moroz a week earlier, the former foreign affairs minister, Borys Tarasyuk, held a round of meetings at the State Department, the National Security Council and on Capitol Hill. Unlike Mr. Moroz, however, he shied away from publicity and the press.

Also overlapping the Yekhanurov mission was a visit by a small group of Ukrainian parliamentarians led by another former member of Prime Minister Viktor Yuschenko's Cabinet, Serhii Tyhypko, who until May of last year handled the economic portfolio. He, too, made the rounds of the power centers in Washington and held a briefing on March 13 at the Washington offices of Radio Free Europe/Radio Liberty, as Mr. Moroz did earlier.

Both Mr. Moroz and Mr. Tyhypko said they came to Washington to learn first-hand the new administration's approach to Ukraine and to provide official Washington U.S. policy-makers with their interpretation of recent developments in Ukraine. But the two deputies' messages differed in just about everything else.

Mr. Tyhypko's Labor Ukraine Party, while calling for a quick and just resolution of the Heorhii Gongadze murder case, is willing to back President Leonid Kuchma, but "in a constructive manner," provided that the investigation does not turn up irrefutable evidence of his complicity in the journalist's murder.

As for Prime Minister Yuschenko's government, he said it should be strengthened by forming a broader coalition government.

Asked about his view on Ukraine's relationship with Russia, Mr. Tyhypko said that Ukraine should maintain a "sound relationship" with Russia and discounted the fear that Ukraine may again be swallowed up by its large northern neighbor.

He suggested that the best defense against this happening would be for Ukraine to adopt the "Baltic" defense - liberalizing its economy and outperforming Russia economically. He admitted that, at present, Russian companies are outbidding Ukrainian and foreign investors for privatized Ukrainian enterprises with the huge profits they are reaping from the boom in energy prices.

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