Accessibility links

Breaking News

Ukraine: Prime Minister Assures U.S., IMF Of Economic Reform Progress

Washington, 3 February 1999 (RFE/RL) -- Ukrainian Prime Minister Valery Pustovoitenko spent his first day in Washington Tuesday assuring the United States and the International Monetary Fund (IMF) that Kyiv is moving ahead satisfactorily on a variety of economic reforms.

His success is seen as essential if Ukraine is to make it through a year in which Kyiv must have additional financing to be able to successfully handle foreign debt repayments alone that total around $2 billion.

At the IMF, while a number of senior Ukrainian finance officials held technical working talks with fund experts, Pustovoitenko met with IMF Managing Director Michel Camdessus.

The fund approved a three-year extended loan of around $2.2 billion for Ukraine last September. So far, Ukraine has received nearly $344 million from the loan.

The fund is conducting monthly monitoring of Ukraine's operations and performing formal quarterly reviews before releasing each new tranche of the loan. In the first quarterly review, started in January, fund officials told Ukraine that it must take some firm decisions in a number of key areas of economic reform -- dealing with tax collections and deficits in the current budget, improving monetary policy and the foreign exchange markets and speeding up reforms in the energy and agriculture sectors.

The IMF review team is expected to return to Kyiv sometime in the near future to finish its work. But IMF officials wanted to know that decisions are being taken by Ukrainian leaders before they send the team back.

Pustovoitenko had to give similar reassurances to American officials because there is a real possibility that over $100 million in bilateral U.S. assistance to Ukraine could be cut off in the next month.

Over the past two years, the U.S. congress has expressed concern about Ukraine's progress in moving toward a market-based system and especially in its treatment of American business people and investors.

Last year, the U.S. Congress -- upset because a number of U.S. businesses had complained of mistreatment in Ukraine -- conditioned continuing American aid on certification by the Secretary of State that Kyiv was making progress in resolving these problems.

This year, the congress added a second criteria that must be satisfied -- "significant progress" on overall economic reform.

Secretary of State Madeleine Albright must give that double certification to the congress by February 18 and in a meeting with Pustovoitenko in her office Tuesday, she warned him that Ukraine stands to lose half of its economic assistance from the U.S. government.

A State Department official, who spoke on the condition of not being named, said that Albright emphasized the importance of Ukraine making good progress on the broad front of economic reform issues -- to keep U.S. aid and to ensure continued help from the IMF.

The U.S. official said that on the positive side, Albright praised Ukraine's democratic progress. The secretary told the prime minister that Ukraine's conduct of presidential and parliamentary elections stood as an example for all of the former Soviet republics.

Pustovoitenko continues his visit to Washington today (Wednesday) with a series of meetings with American congressional and government leaders.