Kuchma returns from Davos assured that Ukraine will receive international aid (02/07/99)

Kuchma returns from Davos assured that Ukraine will receive international aid

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Ukraine's President Leonid Kuchma returned from the annual World Economic Forum in Davos, Switzerland, held this year on January 28-30, satisfied with his discussions with world leaders and more certain that Ukraine will continue to receive the international aid it desperately needs to avert a financial crash.

"I realized that Ukraine will be assisted, and this is very important," said Mr. Kuchma upon his return on January 30. He added that he discerned while in Davos that "the international community feels that it has a stake in cooperation with Ukraine."

Ukraine has a mounting pile of financial debts - some $11 billion worth - from treasury bonds it issued in the last two years, many of which are due to mature this year. It needs credits promised by several financial organizations, including the International Monetary Fund, to help ease its debt burden. However, the IMF has suspended its program with Ukraine until it reviews Ukraine's fulfillment of its obligations in regard to economic reforms.

While in Davos the Ukrainian president met with U.S. Vice-President Al Gore, Russia's Prime Minister Yevgenii Primakov and other leaders of major Western democracies, as well as directors from the IMF and the World Bank.

The World Economic Forum is a gathering of the world's political and business leaders. This year's session put an accent on reviewing current world financial structures with the possible goal of a major revamp.

However, as businessmen and politicians of the developed nations discussed how to make capital flow in the global village more efficient, President Kuchma concentrated on how to get it to pour into Ukraine more frequently and with greater amplitude.

In a meeting with World Bank Managing Director Caio Koch-Weser, Mr. Kuchma discussed additional money for Ukraine from that financial organization. According to Interfax-Ukraine, Mr. Koch-Weser stated his support for continued implementation of a project to expand private entrepreneurship in Ukraine and voiced his belief that Ukraine would receive a scheduled second tranche in April. The World Bank director, voiced his concern, however, that Ukraine's Parliament had failed to ratify several World Bank projects. Without the ratification, some World Bank disbursements could be canceled.

The World Bank announced in September that it was ready to lend Ukraine more than $1 billion if it sticks to IMF economic guidelines and economic reforms.

The IMF, however, has suspended the disbursement of a scheduled tranche, and is analyzing Ukraine's reform efforts and 1999 budget before it decides whether to continue its Extended Fund Facility program with Kyiv. President Kuchma expressed optimism that the loan program will proceed nonetheless. "I believe that it will. Why stop half-way?" queried Mr. Kuchma.

He emphasized that Ukraine had demonstrated its "viability in a critical situation," an allusion to Ukraine's successful weathering of the financial crisis that engulfed Russia and affected Ukraine last year.

He said that Ukraine has met many of the requirements in the IMF agreement, is proceeding on others and now believes that the remaining problems are solvable. "The remaining gaps can be resolved from a political viewpoint," said Mr. Kuchma.

During meetings with Vice-President Gore, the Ukrainian president said the two sides discussed an array of subjects and that they had reaffirmed their commitment to the work of U.S.-Ukraine Bilateral Commission, better known as the Kuchma-Gore Commission. He also said he had presented to the vice-president the Ukrainian plan for the routing of Caspian oil through its territory.

President Kuchma also held discussions with Russia's Prime Minister Primakov during which problems with the Black Sea Fleet treaty, not yet ratified by either the Ukrainian or Russian parliaments, were addressed. President Kuchma told reporters in Kyiv that he will push the Verkhovna Rada to ratify the treaty this year.

He added that he would ask that a clause be inserted to stipulate that the fleet treaty not come into effect until after Russia's Federation Council, the upper house of the Parliament, ratifies the general Russia-Ukraine Treaty on Friendship, Cooperation and Partnership. President Kuchma said he believes the recent postponement of ratification by the upper house "should not be over-dramatized."

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