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Ukraine: U.S. Ambassador Defends Aid Decision

Kyiv, 5 May 1998 (RFE/RL) -- Washington's release of $90 million in conditional aid to Ukraine is in the best interests of American investors, insists U.S. Ambassador to Ukraine Stephen Pifer. Pifer made a case opposite that of the American Chamber of Commerce in Ukraine, which had urged that the money be withheld, due to the continued patchy efforts of Ukrainian authorities to improve business conditions.

The Ambassador said the aid will go directly toward making things better. "It's clear that we hope that it (the release of $90 million) will accelerate economic reform," he said. "To the extent that the government contributes, that will contribute to a better investment climate."

Pifer spoke after U.S. Secretary of State Madeleine Albright last week certified that Ukraine was making progress in cleaning up inordinate bureaucracy and corruption. At issue were 12 specific cases of American investors complaining of unreasonable treatment.

In response to lobbying by those and other disgruntled investors, the U.S. Congress had threatened to withhold nearly half of the $225 million in the 1998 aid package it approved for Ukraine. Albright was designated to evaluate Ukraine's progress.

The U.S. will continue to withhold about $25 million of the aid package contingent on Kyiv taking steps to reform fiscal, tax and banking policies, as well as the agriculture and energy sectors.

Pifer expressed optimism that Ukrainian officials, aware that Washington is still watching, are already moving to resolve the 12 cases in question. "We have made it very clear that the State Department will be watching these cases very closely," he said. "My sense is that there is a momentum in Ukraine to move forward with these cases."

Pifer said Ukraine had met the minimum U.S. goal of improvement in a majority of the cases the U.S. Embassy is monitoring. He specifically cited R&J Trading, a pharmaceutical company, and Gala Radio, a communications venture, as two of the firms that had seen their plights get better.

That was news to R&J Trading President Jacob Yempel, who claims his Ukrainian partners stole joint venture assets. "Absolutely no progress has been in our case," he said.

It was non-commercial considerations that lay behind the decision to release the aid, according to Gala Radio President Joseph Lemire, who said Ukrainian officials have not showed any sign of moving to address his long-standing complaints.

"It's because of geopolitics," he said. "Unfortunately, the State Department has more important issues in Ukraine than protecting U.S. businessmen."

Pifer said he is well aware that Ukraine remains less than an ideal place for American businesses in general.