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Ukraine: U.S. Aid To Kyiv Awaits Albright's Ruling

By Michael Mihalisko and Robert Lyle

Washington, 17 February 1999 (RFE/RL) -- More than $72 million in American assistance to Ukraine hangs in the balance on a decision U.S. Secretary of State Madeleine Albright will announce on Thursday.

Under laws passed by the U.S. Congress last year, Albright must certify whether Ukraine has made "significant progress" on overall economic reforms. And perhaps more significantly, she must also certify that progress has been made on dealing with a number of long-standing business disputes with U.S. investors in Ukraine.

If she certifies that the progress has been made, then the current level of U.S. aid at $195 million will continue. But if she fails to certify progress, $72.5 million of that assistance will be cut off.

When Congress approved the certification requirement, it exempted two categories of U.S. aid from cuts -- nuclear reactor safety and law enforcement programs. Those account for about $50 million, so the law would cut one-half of the remaining $145 million, or $72.5.

The State Department's Coordinator of U.S. Assistance to the NIS (Newly Independent States), William Taylor, told RFE/RL that the decision has not yet been made, but that it could easily go either way:

Taylor said the secretary takes the law very seriously and if there's not progress on economic reform and on the business disputes, then she won't be able to certify. If there is, she will. And the state department is looking very carefully at it right now.

Albright met with Ukrainian Prime Minister Valery Pustovoitenko in Washington earlier this month to discuss the certification process. A State Department official (unnamed) said Albright told Pustovoitenko that Kyiv must take steps to resolve the outstanding disputes as well as take concerted actions to implement economic reform programs worked out with the International Monetary Fund (IMF).

If Albright does not certify progress, Taylor says it will be a significant factor for U.S. business people and potential investors:

Taylor said this will be an indication that the investment climate is difficult in Ukraine and people should be very careful before making investments there.

If Albright does not certify progress in either or both areas -- general economic reforms and business disputes -- Taylor says there can be no waiver of the aid cut or reinstatement at a later point:

Taylor said the law does not allow for reversal of certification. Certification will be made in a report to congress on February 18 and there is no provision for reversal of certification.

The Secretary of State praised Ukraine's progress on democratic reforms, telling the Prime Minister that Kyiv's conduct of the presidential and parliamentary elections stood as an example for all of the former Soviet republics.

But she emphasized that the determination of whether to certify will depend wholly on Ukraine's real economic and business progress.