1. General
trends 2
1.1. Economic
Factors 2
03.06.00 Ukrainian Parliament Rejects Privatization of Telecommunications Company 2
05.06.00 Chornobyl
Nuclear Plant to be Closed on December 15 2
07.06.00 Ukraine
Forecasts 2 Percent GDP Growth for 2000 2
08.06.00 Ukraines
Foreign Trade Volume Rises 2
2. Relations with
international financial institutions 2
2.1. International
Monetary Fund 2
05.06.00 Ukraine
Expects IMF Audit Done by Late July 2
3. Relations with the cis
states 3
09.06.00 Ukraine
Says Gas Debt Spoils Relations with Russia 3
4. RELATIONS WITH
ADVANCED INDUSTRIAL DEMOCRACIES 3
4.1. United
States 3
05.06.00 The
Working Visit of President Clinton to Ukraine 3
05.06.00 White
House Fact Sheet: U.S. Assists Ukraine in Small and Medium Enterprise
Development 7
5. Relations with
european integration and transatlantic security structures 8
5.1. North
Atlantic Treaty Organization 8
03.06.00 Ukrainian
Foreign Minister Attends NATO Seminar 8
03.06.00 Ukrainian Parliament
Rejects Privatization
of Telecommunications
Company
The parliament turned down a government- proposed bill to privatize the state
telecommunications company Ukrtelekom, Interfax
reported. The bill was supported by 222 deputies,
just four votes short of gaining approval. The Communist and Socialist factions refused to participate
in the vote. The bill called for the
state to retain 50 percent plus one share in Ukrtelekom.
The lucrative telecommunications
company is
the most important item in the government's list of firms to be privatized in 2000. Some $500 million in
budget revenues is expected to be
generated this year from privatization. State
Property Fund Chairman Oleksandr Bondar said
the government next week will submit the bill for another vote.
The official closure of the Chornobyl NPP will take
place on December15, 2000. Such was the agreement reached between the visiting
US President Bill Clinton and Ukraine's President Leonid Kuchma.
The Ukrainian government announced a readjusted
economic forecast for the year 2000, raising the targeted GDP growth rate to 2
percent, twice the figure anticipated in February. Ukraine will witness an
inflation rate of 18.5 percent in 2000 and its currency, hryvnia, will be
devalued from the current price of 5.4 hryvina for one U.S. dollar to 6.2
hryvina for one dollar, according to the figures released by the Ministry of
Economy. By the end of this year, the country's foreign reserve will amount to
1.75 billion U.S. dollars, 60 percent higher than in 1999, said the Ministry.
In February, the government had forecast a lower growth with less inflation for
2000, saying that the gross domestic product would increase by 1 percent and
the inflation rate would hit 15.9 percent. In the first four months, Ukraine
registered a GDP growth of 5. 5 percent and its foreign reserve now stands at
nearly 1 billion dollars.
Ukraine's foreign trade volume rose to 7.9 billion
U.S. dollars in the first quarter of this year, up 20. 2 percent from the same
period last year, figures released by the national statistics commission show. Ukraine
exported 3.89 billion dollars worth of commodities and manpower and imported
goods worth 4.01 billion dollars during the three-month period, rising 17.8
percent and 13.2 percent respectively from the corresponding period last year.
The country had a trade deficit of 120 million dollars during the January-March
period. Ukraine's trade with other members of the Commonwealth of Independent
States (CIS) amounted to 3.74 billion dollars, up 13.2 percent over the same
period last year, accounting for 47.3 percent of its total foreign trade.
Russia was the largest importer of Ukrainian goods, accounting for 20.4 percent
of Ukraine's total export, followed by Turkey with 6..7 percent and the United
States with 6.2 percent.
A Ukranian central bank official said he
expects a foreign audit on the bank's financial dealings to be completed by the
end of July. "The first part of the audit was completed, and the second
part of the audit will be completed by the end of July," said Anatolii
Shapovalov, First Deputy Governor of the National Bank of Ukraine, in an
interview with Reuters. Shapovalov said Ukraine was progressing towards
improving accountability and openness, and that the audit would be put on the
Internet. He said the Ukraine government aimed to convince not only the IMF,
but also foreign investors as part of planned reforms after Prime Minister
Viktor Yushchenko took office last December. Ukraine is also preparing to
approach the Paris Club of sovereign lenders on a debt restructuring plan
involving between $500 million and $700 million. Foreign capital is needed to
drive the domestic economy, which is slowly improving. Ukraine's gross domestic
product expanded by 5.6 percent in the first quarter. It was the first quarter
of positive growth since Ukraine's independence in 1991, a Ukranian central
bank official travelling with Shapovalov said. He said growth for the entire
year would likely slow down adding that GDP could at least be flat rather than
negative for the full year.
Ukraine's fast-growing
debts for Russian gas and its habit of helping itself to the fuel from
pipelines crossing the country are endangering relations with its giant
neighbour, top Ukrainian officials have said. "Russia can sue us in
international courts. Russia has the right to turn to the International
Monetary Fund and show them our debts," a clearly irritated President
Leonid Kuchma told a government meeting. Kuchma told the meeting, dedicated to
the precarious state of Ukraine's energy sector, that debts for Russian gas
which totalled $1.4 billion at the end of 1999 had risen by another $700
million since the start of this year. He said the growing debts and theft of
gas might push Russia to build new pipelines bypassing Ukraine. "We are
letting Russia down by our unsanctioned syphoning of gas, endangering its
supplies to Europe and creating a very negative image for Russia in
Europe," Kuchma said. "What kind of partnership relations can we talk
about?" Yevhen Marchuk, head of the National Security and Defence Council,
said if the current trend continued, Ukraine's debt for Russian gas could grow
by another $1 billion. "A rapid growth of debts to Russia not only make
things difficult for the president during personal talks....but also gives
Russia additional levers of pressure on Ukraine," he said, adding that
investors were concerned by such a situation. Kuchma said Ukraine has not
signed an agreement with Russian gas monopoly Gazprom for deliveries this year
and next, further complicating the deplorable situation. He said debts for gas
incurred by local consumers had risen by 2.6 billion hryvnias ($478.07 million)
since the start of the year and totalled 22 billion hryvnias.
U.S. President Bill Clinton arrived in
Ukraine on the last leg of his European tour. His Air Force One jumbo jet
touched down at Kyiv's Boryspil Airport at around 2:45 p.m. on a sunny
afternoon. He was greeted by a guard in ancient Ukrainian Cossack uniforms and
offered bread and salt -- a traditional sign of welcome. Clinton met Ukrainian
President Leonid Kuchma at the Mariinsky Palace, his formal residence. As a
result of the talks, the United States pledged to give additionally US$ 78
million to pay for the protective shelter over one of Chornobyl's power units
which exploded in 1986.
Within the frame-work of visit of the
President of the United States of America William Clinton to Ukraine a ceremony
of signature of a number of bilateral instruments between Ukraine and the
United States took place in the Ministry of Foreign Affairs of Ukraine, in
particular:
Deputy Head of the State Tax
Administration of Ukraine Oleksij Shytria signed the Protocol of Exchange of
Instruments of Ratification of the Convention Between the Government of Ukraine
and the Government of the United States of America for the Avoidance of Double
Taxation and the Prevention of Fiscal Invasion with Respect to Taxes on Income
and Capital.
Minister for Education and Science of
Ukraine Vasyl Kremin put his signature under Agreement Between the Government
of Ukraine and the Government of the United States of America on Science and
Technology Cooperation.
Minister of Transportation of Ukraine
Leonid Kostyuchenko undersigned the Air Transport Agreement Between the
Government of Ukraine and the Government of the United States of America as
well as Agreement Extending the Agreement Between the Government of Ukraine and
the Government of the United States of America Regarding Certain Maritime Matters.
Minister of Ukraine for Emergency Affairs
and Population Protection from the Consequences of Chornobyl Disaster Vasyl
Durdynetz signed the Memorandum of Understanding Between the Government of
Ukraine and the Government of the United States of America on Cooperation in
Natural and Man-made Technological Emergency Prevention and Response.
Deputy Justice Minister of Ukraine Lidia
Horbunova put her signature under the Program of Ukrainian-U.S. Cooperation for
Combating Corruption and Organized Crime, 2000-2005.
From the American side Ambassador
Extraordinary and Plenipotentiary of the United States to Ukraine Steven Pifer
signed the above-mentioned documents.
There was also an exchange of Notes
Concerning Termination of the Agreement Between the Government of Ukraine and
the Government of the United States of America Regarding International Trade in
Commercial Space Launch Services signed on 21 February 1996, carried out by the
Deputy Director of the National Space Agency of Ukraine Eduard Kuznezov and the
US Ambassador to Ukraine S.Pifer.
05.06.00 Remarks by the President of the USA at Signing
Ceremony
Mariinskiy Palace, Kyiv, June 5, 2000
Thank you very much. Mr. President, Mr.
Prime Minister, leaders of the government, leaders and members of the Rada,
leaders of the Court, distinguished citizens. I am delighted to be back in
Ukraine, and delighted to be again with President Kuchma to work on our
strategic partnership, because the success of Ukraine as a free and prosperous
nation is very important to the United States.
Of course, succeeding in the future
requires learning from the past. I am very proud and moved to be here today -
this is World Environment Day - for this historic announcement by President
Kuchma that the final reactor at the Chornobyl nuclear power plant will be shut
down and the entire plant closed forever on December 15th. This is a hopeful
moment. It is also a moment when we remember those who suffered as a result of
the accident there.
The President and I agreed that we can
grow our economies and protect the environment and public health at the same
time, and so we must. I am pleased to announce that the United States will
pledge $78 million for the Chernobyl Shelter Fund, to contain radiation from
the destroyed reactor; and another $2 million to expand efforts to improve
safety at Ukraine's other nuclear power plants.
The President and I also discussed his
plan for economic reform. He and his team have an economic plan that can put
Ukraine on a path towards sustainable growth and much higher living standards.
President Kuchma has moved to give his people their own land, to reduce
government bureaucracy, to promote entrepreneurship. He has taken recent steps
to enhance Ukraine's protection of intellectual property rights and the rule of
law. And these things improve the climate for investment in Ukraine and will
attract more investment dollars from the United States and other places across
the world.
In that spirit, I am pleased to announce
a new five-year, $25-million business development program for small- and
medium-sized businesses in Ukraine to help them participate in the growing
economy.
Finally, I want to take another important
step today. Because of Ukraine's strong efforts to prevent missile
proliferation, I am announcing our decision to eliminate commercial space
quotas and open the door to expanded U.S. cooperation with Ukraine's space
program. This decision will have a positive, long-term impact on Ukraine's
economic prospects, creating more high-tech jobs and positioning Ukraine to be a
leader in a cutting-edge area of 21st century commerce. It will also enhance
the ability of American companies to compete in space.
This represents the kind of high-level
partnership our countries can look forward to as we enter the new century
together.
Thank
you very much, Mr. President. It's been a good day. Thank you.
05.06.00 United States-Ukraine Joint Statement
U.S. President Clinton and Ukrainian
President Kuchma, during their meeting in Kyiv on June 5, 2000, reaffirmed
their commitment to advance and deepen the strategic partnership between the
United States and Ukraine in the 21st century. President Kuchma emphasized
Ukraine's commitment to a democratic and market economic transformation. The
Presidents agreed, that this transformation is the essential basis for
fulfilling Ukraine's European aspirations. President Clinton praised the
leadership of President Kuchma and his new government for early progress on
reform, noting the importance of accelerated implementation of reforms, which
will strengthen the ability of the United States to support Ukraine in its
efforts to improve cooperation with the IMF and other international financial
institutions.
President Clinton welcomed the
announcement by President Kuchma to close the Chornobyl nuclear power plant on
December 15, 2000, noting the importance of this decision to strengthening the
security of all Europeans, especially the Ukrainian people and their immediate
neighbors. President Clinton announced the decision of the United States to
provide another $78 million to the Chornobyl Shelter Fund. He noted the
commitment of the United States to continue to work with Ukraine, the G-7 and
the international community toward resolving the remaining tasks associated
with the closure of Chornobyl, in particular to help provide for stable
electricity generation in Ukraine supported by necessary energy reforms. The
Presidents expressed their support for a successful second pledging conference
to be held in July in Berlin to obtain the remaining funds needed for the
Shelter Fund. President Kuchma welcomed the announcement of an additional $2
million from the United States for nuclear safety work in Ukraine.
The Presidents welcomed the initiation of
the Ukraine Nuclear Fuel Qualification Project, a major technology project to
enable Ukraine to evaluate and certify the reliability and safety of new
suppliers of fuel for Ukraine's nuclear energy sector. With an estimated value
of $30 million, this project will allow Ukraine to diversify its sources of
supply of nuclear fuel. President Clinton expressed support for Ukrainian
participation in the emerging east-west energy corridor from the Caspian region
to world markets, within the contexts of Ukraine's energy sector reforms and
the United States' broader Caspian energy policy.
President Kuchma reaffirmed Ukraine's
European choice and its goal of achieving associate membership and eventually
full membership in the European Union, recognizing the importance of continued
reforms necessary to achieve that end. The Presidents emphasized the importance
of Ukraine's distinctive partnership with NATO and agreed to work to deepen
Ukraine's cooperation with the Atlantic Alliance. They expressed support for
their military cooperation in KFOR, where American and Ukrainian soldiers are
working to bring peace and security to Kosovo.
President Clinton and President Kuchma
praised the success of U.S.-Ukraine cooperation in the area of commercial space
launch services, particularly through the Sea Launch Consortium. They announced
that the U.S.-Ukraine Commercial Space Launch Agreement of 1996 had been
terminated, noting that this bold step will allow U.S. firms and their
Ukrainian partners to enter into commercial space launch ventures unfettered by
quantity restrictions. The Presidents committed to strengthening commercial
relationships between their two countries' aerospace firms because of Ukraine's
progress in restructuring the space sector, its ongoing commitment to
market-based principles embodied in the Agreement, and to its strong adherence
to our shared non-proliferation goals.
The Presidents affirmed their commitment
to increase support for small and medium private enterprise development in
Ukraine. President Clinton announced plans to establish a new micro-enterprise
credit program in Ukraine, which will draw upon the successful Fundusz Mikro
program in Poland, and to initiate a five-year $25 million program to support
small and medium enterprise development. President Kuchma affirmed that the
Ukrainian Government will ensure as soon as possible the necessary legal and
regulatory framework for the new micro-credit program.
The Presidents declared their continued
determination to support the creation of a business and investment climate in
Ukraine that will facilitate expanded trade and investment opportunities
between their two countries. They welcomed initial steps toward privatizing the
energy sector in Ukraine and the entry into force of the U.S.-Ukraine Treaty on
Double Taxation. The Presidents pledged to work together to support steps to
advance their shared goal of WTO accession for Ukraine as soon as possible. In
this context, they affirmed their intension to implement the U.S.-Ukraine Joint
Action Plan to Combat Optical Media Piracy in Ukraine and welcomed the
Ukrainian Government's suspension of the operations of