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Ukraine: World Bank Cautious About Financial Support

Hong Kong, 22 September 1997 (RFE/RL) -- A World Bank official says that the World Bank remains leary of further loans to Ukraine because of political difficulties resulting from differences between parliament and the national administration.

Johannes Linn, World Bank vice president for Central and East Europe and Central Asia, told reporters in Hong Kong today that continued lending is reasonable in some areas but that Ukraine has a long way to go to achieve efficient administration.

Linn said the country has progressed in the last year with reforms in agriculture, entrepreneurship, coal, rehabilitation, electricity, and privatization. But, he said, progress has slowed because parliament has refused to support important changes, including the bank's requirement for an electric rate rise to service a large bank loan. The bank suspended the loan this summer.

He said bank officials believe that privatization, financial sector reform, and agricultural reform are promising areas for progress. The coal industry, which has received part of a World Bank load, is more problematical he said.

The World Bank officer said the institution remains ready to work with Ukraine. He put it this way: "Our position is that where the government can move, we stand ready to support with advisory services and lending." Where the government can't act, he said, the bank will step back.

Linn said Ukraine isn't yet far advanced in transitioning to a market economy.