BUSINESS IN BRIEF (09/12/99)

BUSINESS IN BRIEF

Tyhypko takes issue with Moody's conclusion

KYIV - Moody's earlier conclusion that Ukraine will probably default on its foreign debts is an overstatement, Vice Prime Minister Serhii Tyhypko told journalists. He noted that the draft budget for 2000 is taking into account all amounts needed to pay out Ukraine's foreign debt, as well as interest payments. Therefore, Moody's statement about a possible default is definitely "premature." He stressed, however, that if Ukraine elects a president who will "decide problems of cooperation with international financial organizations at the level of emotions," Ukraine may be facing the possibility of defaulting on its obligations "soon enough." Mr. Tyhypko conceded that next year's debt is large, but pointed out that there are mechanisms that allow countries with even greater difficulties to get out of the situation, mentioning "re-crediting" as one way of easing the debt burden. He explained that if Ukraine preserves "normal relations" with international money lenders, it will be able to take new loans and pay debts with these loans. This will also enable the country to stimulate production. Next year Ukraine will have to pay $3.3 billion (U.S.) in foreign debts, most of which were made by the National Bank of Ukraine. The government managed to restructure part of its debt this year and NBU currency reserves presently amount to $1.1 billion (U.S.). (Eastern Economist)

70 polling stations outside Ukraine

KYIV - The Central Elections Committee has adopted a resolution that provides for setting up 70 polling stations under Ukraine's foreign representatives, but only in countries where Ukraine has its diplomatic and consular offices, said CEC Chairman Mykola Riabets. According to an agreement with the Foreign Affairs Ministry, the number of stations may be increased if necessary. (Eastern Economist)

Foreign investment down almost half

KYIV - Foreign investors invested $264.9 million (U.S.) in Ukraine's economy in the first half of 1999 - down by 48.8 percent from the same period last year. According to State Statistics Committee data, investment contributions were mainly made in cash ($171.8 million) and in the form of real estate and movable property ($80.4 million). At the same time, the amount of foreign capital dropped by $107.6 million, due largely to the severance of relations with foreign partners. Direct foreign investments came to Ukraine from 106 countries and totaled $2.935 billion as of July 1, 1999. (Eastern Economist)

Ukraine develops miniature unmanned vehicles

KYIV - Ukraine is developing miniature unmanned vehicles weighing nine to 10 kilograms and capable of flying at 60-105 kilometers per hour, said Ihor Avilov, general director of the Kharkiv-based joint stock company Naukovo-Promyslovyi Servis. In his view, unmanned vehicles are convenient means for resolving a wide range of tasks, from reconnaissance of military targets to aerial photography and monitoring areas of fire or ecological catastrophes. Such vehicles are much cheaper than helicopters or aircraft and can perform a mission without risking human lives. According to Mr. Avilov, Ukraine has already designed the Oko-1, Synytsia, Remez-1, 2 and 3 vehicles. The latter measures 0.78 meters in length and can fly for two hours. At the East-West Euro Intellect show in Sofia, Bulgaria, Remez-3 was awarded a gold medal. (Eastern Economist)

Kyiv residents to pay double for water usage

KYIV - On September 1 rates for water and waste water disposal will double for residents of Kyiv, said the head of the city's Administrative Pricing Board, Vasyl Yastrubynskyi. One cubic meter of water will now cost 43 instead of 21.4 kopiiky, while water disposal will rise from 10.4 to 25 kopiiky. Prices for utility services in Kyiv are considerably lower than in other parts of Ukraine, according to Kyiv Water Supply Association General Director Oleksander Popov. He claimed that the KWSA is nearly bankrupt now, since the company receives only 211.2 million hrv based on 1996 rates - not enough to cover costs. Since 1996 electricity rates have more than doubled, and prices for chemical agents have nearly tripled, while overheads also went up. Mr. Popov pointed out that pushing up the current rate of 1.11 hrv for industrial enterprises would be impractical, since that cost increase would have to be added to product prices, which is not advisable given the state of the economy. (Eastern Economist)

New multi-purpose fighter in the works

VINNYTSIA - Starting in 2000, Ukraine will begin designing a multi-purpose combat aircraft to replace presently commissioned planes. In line with the national program, the development of the plane is to be completed in 2015-2017, according to Col. Gen. Victor Strelnikov, vice minister of defense and air force commander. Before the new plane becomes available, Col. Gen. Strelnikov stated, Ukraine will modernize the aircraft currently in use. The Ukrainian air force uses mainly MIG-29s, SU-25s, SU-24Ms and SU-27s. (Eastern Economist)

Private sector handles most cargo

KYIV - Transport Ministry statistics revealed that Ukrainian air transporters carried 21,800 tons of cargo in the first quarter of 1999, an increase of 25.5 percent compared to the same period of 1998. State-owned freight companies transported just 2,100 tons, while over 90 percent of cargo was moved by private companies. State companies have been experiencing a steady decline in air cargo transportation. As much as 20,800 tons of freight was shipped on international routes. (Eastern Economist)

Tobacco company to expand market

KYIV - The British-American Tobacco company is expected to increase its share of the domestic tobacco market due to its merger with Rothmans International by producing cigarettes at the Pryluky tobacco factory in the Poltava Oblast. The company's present share of the global market is 16 percent. (Eastern Economist)

Ukrainian-Swiss cannon project revealed

KYIV - The Kharkiv-based Morozov Construction Bureau, in a joint venture with the Swiss Ordnance Enterprise Corp., has produced a prototype of a 120-millimeter tank cannon. The cannon has been developed based on NATO standards, and will be tested in Switzerland before the end of 1999. If the results of the test are positive, the cannon may be used atop Ukrainian-made tanks. (Eastern Economist)

Agreement signed on production of N fuel

KYIV - Ukraine, Russia and Kazakstan signed an agreement initiating a joint venture for the production of nuclear fuel for VVER-1000 type reactors. The draft project, which was prepared by the Ukraine's Ministry of Energy, is to be headed by Energy Minister Ivan Plachkov. (Eastern Economist)

Ukrainian engines in Black Shark copters?

MOSCOW - A helicopter-building company will be set up under the direction of the Kamov Construction Bureau, said the director general of Kamov, Sergei Miheiev. The company is to construct KA-50 (Black Shark) helicopters which in all likelihood will be powered by Ukrainian-made Motor-Sich engines. (Eastern Economist)

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