U.S. delegation discusses Ukraine's economic reform during meetings in Kyiv (02/20/00)

U.S. delegation discusses Ukraine's economic reform during meetings in Kyiv

KYIV - Ambassador Stephen Sestanovich, special advisor to the U.S. secretary of state for the new independent states (NIS), said he discussed Ukraine's plans for economic reform "and how the United States can best support them" when he met with President Leonid Kuchma and top Ukrainian government officials on February 3 and 4, according to a U.S. State Department release.

Additionally, "we met with the representatives of the IMF [International Monetary Fund] and World Bank here in Kyiv, as well as with the Executive Committee of the American Chamber of Commerce," Mr. Sestanovich said during a press briefing that also included Mark Medish, senior director for Russian, Ukrainian and Eurasian affairs at the National Security Council, and U.S. Ambassador to Ukraine Steven Pifer.

The visit was a follow-up to a U.S.-Ukraine Binational Commission meeting that took place in Washington in early December 1999, noted Mr. Sestanovich and said, "At that time President Kuchma set forth for President Clinton and Vice-President Gore his strategy for economic reform in his second term."

They stressed the importance of fighting corruption, creating greater transparency, and supporting the rule of law in the new institutions of Ukraine.

"Through measures of public administration reform, greater transparency, it becomes harder for policy to be distorted behind the scenes by the manipulation of special interests. It becomes harder for people to abuse power. And that's an issue that friends of Ukraine take seriously. It's an issue that the international financial institutions take seriously," Mr. Sestanovich said.

At the World Economic Forum in Davos, Switzerland, U.S. Treasury Secretary Larry Summers, Mr. Sestanovich and Mr. Medish had discussed with President Kuchma his economic agenda.

"Secretary Summers commended the president on working closely with the IMF and World Bank in developing this program. We have already mentioned one of the key elements, the management of external debt, but there are others: the formulation of realistic budget, privatization, public administration reform, and others. We think there are some very good early signs on this front. But there's still a good deal of work to be done, and the key is implementation," Mr. Medish said.

"This is really a time of strategic opportunity for Ukraine: To push forward with long-delayed reforms in critical areas. If you take a broad look at 10 years of experience with economic transition across Central Europe and Eurasia, one can see a few clear lessons. And probably the most important and basic one is that those countries that have pursued reform decisively and consistently have performed best economically. It sounds simple and obvious, but it's very important," he added.

During the press briefing Mr. Medish explained: "We believe that managing Ukraine's external debt and the question of its restructuring in a systematic manner will be a key component of Ukraine's overall economic strategy and the success of its IMF program. We know that the government is working hard on this issue. And I would note that Ukraine already has some useful experience in this area having dealt with individual cases of private debt restructuring in 1998 and 1999. And I think it is fair to say that the Ukrainian authorities received fairly good marks for the process that they conducted in their negotiations with creditors. We hope and expect that the authorities will earn high marks again."

Ambassador Sestanovich noted during the briefing that the group was not disappointed not to be able to meet Mr. Yuschenko, who was ill. "But we were able to speak with many of the members of his team and, as Mark Medish said, the impression one gets is of very strong and unified team with a clear mandate from President Kuchma to implement an effective program that will generate economic growth, preserve international confidence, particularly among Ukraine's creditors, and institutionalize these changes for the long term," he said.

"One of the officials we met with said in this Cabinet they don't have to spend a lot of time debating what's the right thing to do. They know it and the question is how to get it done," Mr. Sestanovich continued. "They told us that they don't underestimate the difficulties of implementing such a comprehensive program, but they have confidence that President Kuchma is behind this effort, and that there is a much stronger base of support in the Parliament for it, and a recognition that it needs to be put in force. And they said they also have an agreement about that there is no real alternative to this and that the consequences of not acting will be continued economic crisis and hardship."

"All this," he underlined, "gave us the impression of a team that is ready to work, aware of how important this moment is, sort of mindful of the difficulties but united and effective."

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