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Ukraine: Lazarenko Promises A Better Business Environment

Ottawa, 19 June 1997 (RFE/RL) - Ukrainian Prime Minister Pavlo Lazarenko during a visit to Canada over the weekend promised businessmen his government would improve the climate for companies interested in investing in Ukraine.

At a meeting of the Canada-Ukraine Business Initiative conference, held Monday in the western Canadian city of Calgary, Alberta, Lazarenko said Ukraine will make life much more comfortable for investors.

Throughout his Canadian visit, Lazarenko tried to downplay fears of corruption in his government, high taxes and excessive legislative and regulatory red tape. In Calgary, he told reporters corruption was a highly complex subject. He said: "It's not so much corruption as it is a desperate economic situation."

Lazarenko, who returned to Ukraine Tuesday, headed a delegation of nearly 100 business people and government officials. He started his trip in Ottawa last Friday, meeting with Canadian Prime Minister Jean Chretien and other senior cabinet ministers. He then traveled to Winnipeg, Manitoba to attend a conference of the Canadian Building Products and Construction Association. At that meeting, Canadian cold-climate design and construction techniques were showcased.

While in Winnipeg, Lazarenko announced that within weeks, a $ 30 million deal will be completed with a local company, Versatile Farm Equipment. It will be a joint venture for the purchase of the firm�s four-wheel tractors.

Later, at a meeting with members of the Ukrainian-Canadian Congress, Lazarenko said Ukraine has traveled a "difficult path" since declaring its independence in 1991 but added that "despite all the hardships and complications, we now have an economy heading out of decline because the structural work has been completed, finally."

He predicted that Canada will be a major influence politically, culturally and economically in the future. Canada, home to nearly one-million people of Ukrainian descent, was the first country to recognize an independent Ukraine.

The Ukrainian delegation stopped briefly in Regina, Saskatchewan before arriving in Calgary -- the heart of Canada's oil industry -- for more rounds of business meetings. There, Lazarenko said Canadian and Ukrainian companies would sign more than $ 850 million worth of business agreements. While details have not yet been made public, Lazarenko said the deals cover some 200 projects and promised there would be more as Canada and Ukraine continue to develop what he described as a unique relationship.

One large joint venture has been announced. Northland Power Inc., based in Ontario, has entered into a $ 130 million deal to modernize and expand a heat and power plant on the outskirts of Kyiv. After 15 years, the project will revert to Ukrainian ownership.

The plant, built in the 1950's, supplies electricity and heat to about 300,000 people in and around Kyiv as well as producing steam for a number of industries. Under the project, Northland expects to introduce new technologies which will nearly double the plant�s output and achieve major reductions in emissions into the air.

Two Canadian energy companies now have projects underway in Ukraine to help develop oil and gas reserves. It is believed that another six are negotiating with the government in this sector. Ukraine imports about 80 per cent of its energy needs and is anxious to develop not only oil and gas fields but to improve transportation and distribution networks.

Canadian exports to Ukraine stood at $ 35 million last year, up 26 percent over 1993 levels. Canadian imports from Ukraine totaled $ 15 million last year, a five percent increase since 1993.