NEWSBRIEFS (01/12/97)

NEWSBRIEFS

Kuchma increases arms exports controls

KYIV - President Leonid Kuchma has issued a decree aimed at increasing control over defense-related exports, Ukrainian Radio reported on December 28, 1996. The decree transforms the State Export Commission into the State Commission for Export Control Policy. The Export Technical Committee will be renamed the State Export Control Service under the Cabinet of Ministers. The reorganization is meant to establish strict control over international transfers of arms and military technology, as well as raw materials and skills that may be used for the production of weapons and other military technology. (OMRI Daily Digest)

Ukrainians cite decline in living standards

KYIV - An opinion poll asking 1,200 Ukrainians about their living standards in 1996 showed the majority still feel their standards are declining, the newspaper Den reported on December 31, 1996. Of the respondents, 37 percent said their living standards declined significantly in 1996; 33 percent said they declined somewhat; and 23 percent said their standards did not change. Only 6 percent said their standards improved somewhat; and 1 percent said they improved significantly. The average wage in the first 11 months of 1996 was 144.76 hryvni ($77), but real wages fell by 23 percent over the same period due to inflation. Official unemployment levels remained at a low 1.1 percent, but real unemployment is believed to be at least nine times higher. Prices rose by 38.5 percent over the first 11 months of the year. (OMRI Daily Digest)

Constitutional Court comes into being

KYIV - Ukraine's new Constitutional Court formally came into being on January 3, Ukrainian Radio reported. The head of the court, Vitalii Boiko, met with President Leonid Kuchma to mark the occasion. So far, 16 out of the court's 18 judges have been appointed. The remaining two are to be appointed by the Verkhovna Rada, which has the right to appoint one-third of the court's justices. The same day, President Kuchma submitted his first case to be examined by the court; the case involves the Parliament's accounting department. (OMRI Daily Digest)

Budget deficit twice as large as forecast

KYIV - Ukraine's budget deficit in 1996 totaled 8.6 billion hryvni ($4.57 billion), Reuters reported on December 31, 1996. That is double the figure forecast when the budget was drawn up. Prime Minister Pavlo Lazarenko said that GDP fell for the fifth consecutive year and that, according to the most optimistic forecasts, it is not expected to reach the 1990 level for another 11 years. Mr. Lazarenko said wage arrears have not been paid because of "other commitments." On a more positive note, he added that Ukraine has paid off all its accumulated gas debts to Russia and Turkmenistan. (OMRI Daily Digest)

Security Council approves military plan

KYIV - Quoting the secretary of the National Security and Defense Council, Volodymyr Horbulin, UNIAN reported on December 28, 1996, that the council has approved a program for the development of Ukraine's armed forces through the year 2005. Mr. Horbulin said the program took all foreign policy factors into account and was based on the state's financial resources. Defense Minister Oleksander Kuzmuk noted that three operational and command directorates would be established on the model of the Carpathian and Odesa military districts and the Northern Command. The program envisages a new structure made up of mobile rapid-reaction units. The ground forces, air force, air-defense force and navy will all remain part of the Ukrainian army. Minister Kuzmuk also said this was the first time that the state has specified that the task of the armed forces is to ensure the country's national security. (OMRI Daily Digest)

NBU reduces refinancing rate

KYIV - The National Bank of Ukraine reduced its key refinancing rate to 35 percent from 40 percent, effective January 10, a bank official said. NBU spokesman Dmytro Rikberg on January 4 told Reuters the new rate took into account the fall in inflation. Ukraine's Statistics Ministry reported that same day that monthly inflation fell in December 1996 to 0.9 percent from 1.2 percent in November. Annual inflation fell to 39.7 percent against 181.7 percent in 1995. The government said inflation for the coming year is expected to be 25 percent. (Reuters)

Russian is equal in Kharkiv region

KHARKIV - The eastern region of Kharkiv voted to give the Russian language equal status with Ukrainian as of the beginning of the year, ITAR-TASS reported on January 7. At the same time, the administration in the predominantly Russian-speaking eastern region of Donetsk took the opposite position, deciding that the sole official language in the region's administration and business would be Ukrainian. Under the Ukrainian Constitution, only Ukrainian has the status of state language, but regions with sizable minorities speaking other languages may grant official status to other languages. (OMRI Daily Digest)

Daewoo promises $1B for car industry

KYIV - Korean giant Daewoo plans to invest more than $1 billion (U.S.) in Ukrainian car production, reported UNIAN on December 26, 1996. According to the presidential press secretary, Dmytro Markov, President Leonid Kuchma has approved most of the projects proposed by Daewoo Chairman Kim U Jung at a recent meeting and has ordered the Cabinet and ministries to do their utmost to ensure their successful realization. Mr. Markov insisted that Daewoo is entering the Ukrainian market as a strategic investor and plans to reinvest its profits in the Ukrainian economy. During a meeting with Conversion Minister Valerii Malev and representatives of Zaporizhia car plant AvtoZaz, the Daewoo corporation agreed to participate in the restructuring of AvtoZaz and to start mass-production of cars solely from Ukrainian components. Specialists report that more than 160 Ukrainian enterprises will be involved in the manufacturing cycle. About 30,000 cars are to be made annually, half of which are to be exported. This is expected to yield annual profits of $1.5 billion (U.S.). (Eastern Economist)

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