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Prime Minister Lazarenko's U.S. Visit Builds Economic Ties

By Michael Mihalisko and Robert Lyle

Washington, July 29 (RFE/RL) -- One of Ukraine's "most important priorities" is to build a broad political and economic relationship with the United States, Ukrainian Prime Minister Pavlo Lazarenko said last week after two days of meetings with senior U.S., International Monetary Fund (IMF) and World Bank officials.

He told reporters at the National Press Club that Ukraine especially appreciated support and aid from the U.S. in "an extremely complex time for us, a time of radical socio-economic transformations."

"This is a time of economic transformation and precipitous moves towards democratization," Lazarenko said.

It would be difficult to overestimate the value of the support Ukraine has received from the U.S. and the West, he said.

"Ukraine's (position) Central and Eastern Europe has placed on its daily agenda activities of dynamic integration first and foremost into this region," he said.

The Prime Minister was accompanied on the trip by a number of senior Ukrainian officials, including Foreign Minister Hennadiy Udovenko, National Bank Chairman Viktor Yushchenko, National Agency for Reconstruction and Development Chairman Roman Shpek, State Property Fund Chairman Yuriy Yekhanurov and First Deputy Finance Minister Mykola Honcharuk.

Lazarenko's meetings in Washington included talks with IMF Managing Director Michel Camdessus; World Bank President James Wolfensohn; White House National Security Advisor Anthony Lake; President of the U.S. Overseas Private Investment Corporation (OPIC) Ruth Harkin; several congressional leaders, and senior executives from 20 major U.S. corporations doing business in Ukraine.

At OPIC, the U.S. agency which insures American investment abroad and provides some financing to firms doing business overseas, Lazarenko emphasized how Ukraine's new constitution, implemented this summer, has removed "barriers to a normal market economy" and is creating the proper atmosphere for private enterprise and foreign investment to flourish.

He acknowledged the country's still serious economic problems, including back wages and pensions owed to many workers and retirees, and the difficult situation in the coal industry. He said they are being worked on as part of the overall budget.

"We won't be able to settle it (the arrears) in one month," he said, but expressed confidence that they will be paid off.

Lazarenko said he told IMF officials that his government is "working on downsizing (the government) and reducing the budget" as part of its economic reform and stabilization program in support of the current IMF standby loan. The second $300 million installment of that loan will be reviewed by the Fund's Board of Executive Directors next week and should be released soon after that.

Lazarenko said he did not ask the IMF for additional loans.

Talks focused on creating a stabilization fund to support the introduction of Ukraine's currency, the Hryvna, in the near future. An IMF delegation is expected to visit Kyiv in the next month to talk about the idea.

At the World Bank, Lazarenko said he talked about a number of projects the Bank is already financing or may approve in coming months.

"We have very successful work with the World Bank," he said.

Before the trip, Lazarenko said his goals were to form more personal working relationships with leaders of international financial institutions and broaden and deepen Ukraine's economic, financial and trade ties with the U.S. On Friday he said he achieved those goals.

Several people on the American side agreed. OPIC's Ruth Harkin said a number of areas ripe for American investment were discussed and reviewed with American companies already in Ukraine and others ready to make investments. They included automobile and farm machinery manufacturing, telecommunications and natural gas development.

The U.S. Chamber of Commerce sponsored Lazarenko's meeting with the senior executives of American firms in Ukraine. One of the Chamber's senior officials said the Prime Minister greatly impressed the business people.

"These are people who actually want to commit considerable sums of money" to Ukraine, said the official.