BUSINESS IN BRIEF (10/04/98)

BUSINESS IN BRIEF

Denmark provides $100 M credit line to Ukraine

KYIV - Danish Foreign Affairs Minister Niels Petersen and his delegation of officials and businessmen arrived in Kyiv on September 9. On the first day of his visit a protocol was signed calling for a $100 million U.S. credit line to help develop the domestic energy and ship-building sectors. Mr. Petersen told a news conference after the signing of the document. Denmark hopes the credits will encourage necessary economic reform.

The Ukrainians and Danes also signed an agreement on international highway links and a protocol on financial cooperation. The highway communication agreement, which addresses international automotive transit, conditions for transporting people and cargo, and transit within Ukraine and Denmark is expected to improve Ukraine's balance of payments and increase currency reserves.

Ukraine's Foreign Affairs Minister Borys Tarasyuk said that in 1994 trade turnover between the two countries totaled $86 million U.S.; in 1998 the figure reached $181 million. Ukraine's National Agency on Economic Development and Integration also signed an agreement with the Danish Investment Fund for Central and Eastern European Countries.

The Danish businessmen accompanying Mr. Petersen met with government officials to discuss opportunities in Ukraine's agricultural and energy sectors.

Messrs. Tarasyuk and Petersen discussed the Ukraine-European Union summit scheduled for October in Vienna. The Danish foreign affairs minister's schedule also included meetings with President Kuchma, Prime Minister Valerii Pustovoitenko and Minister for Foreign Economic Relations and Trade Serhii Osyka, as well as Verkhovna Rada Chairman Oleksander Tkachenko. (Eastern Economist)

Ukraine wins tender to supply T-84 tanks to Turkey

MOSCOW - Sources in the Russian Defense Ministry report that Ukraine has won a tender to supply T-84 and MBT-2000 tanks to Turkey. The T-84's design is based on the popular Soviet T-80U.

According to the same sources, Ukraine's prices were six times lower than the usual asking price for a tank on the international market. The Russians, who also submitted a bid, are reportedly upset by what they consider "dumping prices" on the part of Kharkiv's Malyshev factory. Such low prices, they contend, are attempts on the part of Ukraine to muscle its way into traditionally Russian markets.

The sales to Turkey coincide with Ukraine's efforts to reduce the size of its fleet of tanks; Russia, however, continues to keep huge tank units and cannot afford to match these prices.

The Turkish deal comes in the wake of a similar 1996 sale to Pakistan. Under this agreement, which is considered a breakthrough for Ukraine as a tank exporter, Ukraine has committed to supplying 320 T-80UD tanks at a total cost of $620 million U.S., with most revenues from this sale earmarked for modernization of the tank.

The Russians, angered by Ukraine's success in Pakistan, refused to supply cannons for the tanks, forcing Ukraine to begin production of its own cannons. Despite expressions of shock and "betrayal" by Russian military leaders over this transaction, Ukraine continues to build its relationship with Pakistan.

A Pakistani defense ministry delegation led by the country's general staff commander, Jakhangir Karamat, studied the MBT-2000 during a recent visit to the Kharkiv factory. The delegation has given its preliminary approval to a three-way Ukraine-Pakistan-China agreement for joint production of the new tank. Pakistan has also reportedly assured Ukraine that it is prepared to buy 100 MBT-2000 tanks. (Eastern Economist)

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