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Ukraine: Coal Reforms Slower Than Expected

Washington, 28 May 1997 (RFE/RL) - A World Bank official in Washington says implementation of coal sector reforms in Ukraine has been much slower than expected and Kyiv won't be ready for the second half of a loan financing the reforms for several months yet.

Coal was once one of Ukraine's major industries, employing nearly five percent of the labor force in 1994. But production has dropped by over 50 percent and last December the bank approved a $300 million restructuring loan to help Ukraine close unproductive mines, liberalize the market, and privatize the entire coal sector.

Ukraine drew the first $150 million of the loan in December, but bank project manager Laslo Lovei says a review team in April found that the required reforms were going slowly. A Ukrainian official said the bank was especially concerned at the lack of a program to ease the social costs of closing the unprofitable mines.

Ukraine's drawing of the second, $150 million tranche, is dependent on the country's having met specific conditions, says Lovei, and is not scheduled for any particular date.

Meantime, an International Monetary Fund (IMF) three year loan of up to about $3 billion, is awaiting Ukraine's approval of the state budget.