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Ukraine: Government To Strengthen Economic Controls

By Katya Gorchiskaya

Kyiv, 19 March 1998 (RFE/RL) -- A top aide to Ukrainian President Leonid Kuchma says the government is working on a decree to further strengthen the state's control over the economy.

Presidential Chief of Staff Yevhen Kushnaryov yesterday said the document has already received preliminary approval from government finance and economic officials, though he offered no details on the new controls.

It was also announced that President Kuchma will reveal a new program for economic development covering 1999 to 2005 in his address to the nation and new parliament in April. (Parliamentary elections are March 29)

Presidential spokesman Yevgeny Kushnarev said reforms begun in late 1994 had been a success. Kushnarev said the Ukrainian economy has been partially liberalized, the national currency has stabilized, and the decline in industrial output has halted.

He said the task now facing the government is to consolidate market reforms and ensure economic growth. Kushnarev said the government would also aim further to reduce spending.

But, the government's announcement of planned tighter economic controls, and Kuchma's plans to announce a new program for economic development came only days after the International Monetary Fund (IMF) refused to grant Ukraine the latest $50 million installment of a stand-by loan launched last August. In refusing to grant the loan, the IMF said Ukraine was delaying macroeconomic development.

And, U.S. Ambassador to Ukraine Steven Pifer this week said Kyiv's stance on economic development might also cost Ukraine about half the money it receives from the U.S. in aid. Pifer said Washington might withhold the money because Ukraine has made little progress in deregulating its economy and creating favorable conditions for investment and business.

Last year, the U.S. Congress approved $225 million in aid for Ukraine for the year 1998. But, Congress said half of the money would be withheld, and be granted contingent on the pace of Ukraine's reforms.

Ukraine is the third-largest recipient of U.S aid, after Israel and Egypt.