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Ukraine: Premier Seems Satisfied With Washington Visit

Last week the International Monetary Fund (IMF) made public an embarrassing audit of Ukraine's central bank. This week, Ukraine's prime minister, Viktor Yushchenko, made a long-planned visit to Washington to speak with U.S. officials and with leaders of the World Bank and the IMF. RFE/RL's Andrew F. Tully reports that despite the awkward timing, Yushchenko appears satisfied with his trip.

Washington, 10 May 2000 (RFE/RL) -- Viktor Yushchenko, Ukraine's prime minister, probably could not have come to Washington at a worse time. Only last Thursday, an audit of his country's central bank found embarrassing accounting irregularities.

Yet Yushchenko came, and appeared to be satisfied with the meetings he held with U.S. President Bill Clinton, Secretary of State Madeleine Albright, and the chief officers of the World Bank and the International Monetary Fund.

Yushchenko visited Washington for three reasons.

First, he wanted to hold preliminary discussions with American officials about a memorandum of understanding signed in 1995 by Ukraine and the governments of the Group of Seven leading industrial countries (G-7). In that document, Ukraine agreed to close down the damaged Chornobyl nuclear power plant; the G-7 agreed to give Ukraine about $2.5 billion in aid. That money has not yet been forthcoming. Formal discussions on the memorandum will be held next month in Berlin.

Second, he wanted to present to the IMF the status of Ukraine's economic and social reforms. These are conditions for continued IMF loans to Ukraine.

Third -- and perhaps most important -- he wanted to improve relations with the IMF that had been soured by the problems at the National Bank of Ukraine.

After meeting on Monday with Albright, Yushchenko told reporters that he believes the U.S. will take a "constructive" approach to his country's problems with the IMF.

"We also talked [with Albright] about American support, and the American side demonstrated that it will take a constructive approach to those processes."

The U.S. administration encouraged Yushchenko to accelerate reforms in his country.

On Monday, Yushchenko also met with senior officials of the IMF. After that session, Ihor Mytiukov, Ukraine's finance minister, said Yushchenko explained the status of Ukraine's economic reforms.

"I think that this meeting was especially fruitful because we could express our position. We gave our explanations to the directors, who will vote either on one or another proposal concerning Ukraine. We did this to ensure that their decision will be adequate and one that Ukraine will fulfill."

On Tuesday, Yushchenko met briefly with Clinton at the White House, and later said only that the two men discussed a broad range of bilateral issues.

Perhaps more important meetings were conducted the same day with James Wolfensohn, the president of the World Bank, and with Horst Koehler, the new managing director of the IMF.

After the meeting with Koehler, the IMF issued a noncommittal statement saying only that it "reviewed Ukraine's progress" in implementing reforms. It also said it discussed the central bank audit. The IMF statement did not elaborate.

The audit, made public last Thursday (April 27), said the National Bank of Ukraine used questionable accounting practices that inflated the value of the bank's assets. As a result, the IMF was duped into giving $200 million in loan installments to Ukraine that it otherwise would have withheld.

Last September, when the IMF first suspected the problem, it froze a $2.5 billion loan program with Ukraine. It will not decide whether to resume the loan program until its directors can study the audit, an IMF analysis of the audit, and receive a second phase of the audit. That phase is note expected until late summer. Yushchenko said he hopes the second audit report can be accelerated.

Perhaps the harshest words of Yushchenko's two-day visit to Washington came from Wolfensohn. After the two men met, the World Bank issued a statement quoting Wolfensohn as saying he applauds Kyiv's commitment to reform, but is more interested in seeing concrete results from the reform programs.

But it was the meeting with Koehler that was the most critical. And yet when Yushchenko emerged, he was laughing, and gave every indication that the session had been satisfactory.

He gave few details of the talks, except to characterize them as "constructive."