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20 May 1998
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The Minister for Foreign Affairs speaking on May 19, before the diplomatic corps accredited in Kiev, advocated the intensification of Ukraine's "integration efforts" on the European and trans - Atlantic direction. Ukraine's place in European and world economies, its role in the international division of labor, in his words, should become "more established and significant". Ukraine will be persistent and consistent in seeking GATT/WTO membership, Minister Tarasyuk said. He stressed that "there is a firm intention" to increase the economic presence of Ukraine in the new independent states. The world community can be sure that Ukraine fulfills its pledges, and continues its predictable and consistent foreign policy aimed at securing its national interests and creating a favorable environment for economic transformation. He further disclosed, "that a strong, reformed and independent Ukraine is a factor of stability and security in Europe, a player in world politics." Borys Tarasyuk stressed the need to enhance foreign policy's effectiveness, and to increase its "economic returns". The Foreign Minister aquainted the ambassadors with the current political situation in Ukraine after parliamentary elections, and with progress of economic reforms. He underlined that the formation of a favorable environment has principle importance for the implementation of reforms in Ukraine. Currently, over sixty foreign embassies are permanently accredited in Kiev.


Analysis of the Birmingham Statement of the G8 countries, with regards to Ukraine, gives grounds to claim that the countries of G7 and the European Union try to place blame on Ukraine for their unwillingness to fulfill their financial pledges for the Chernobyl shutdown, said Ukraine's Foreign Minister Borys Tarasyuk, speaking before the diplomatic corps accredited in Kiev on May 19. The memorandum of understanding between Ukraine, the European Commission and the G7, signed in December 1991 in Ottowa, envisaged Ukraine's pledge to shutdown Chernobyl by 2000, under the condition of adequate Western funding to construct power plants to compensate for the energy losses resulting from Chernobyl's closure, and the Western assistance in the solution of social problems of the NPP's employees. In Minister Tarasyuk's words, there are no facts which would justify the attempts by the authors of the Birmingham statement to question the fulfillment by Ukraine of its pledges under the MOU. "Ukraine respect its international pledges, including those under the Ottawa MOU", he said. Boris Tarasyuk noted that the Ukrainian government in order to provide funding for completion of two new nuclear reactors, in Rivne and Khmelnytsk, had to raise internal revenue at the expense of increasing tariffs for electricity generated by NPP's from January 1, 1998. Borys Tarasyuk also mentioned talks with other countries as to funding of the project, among other measures. he expressed hope that the parties of the MOU will meet their pledges. "The time for discussion has ended, the time for action has begun," Tarasyuk said.


According to a public opinion poll, conducted by the Ukrainian Center for Peace, Conversion and Conflict Situations Studies in April 1998, Ukrainians at large support a balanced and diversified foreign policy course. Participants in the poll were asked to forecast the development of pro-Russian and pro - European foreign policy objectives in Ukraine. They responded as follows:

How, in your opinion, will the relationship between Ukraine and Russia develop?
Russia and Ukraine will be united 26%
Russia and Ukraine will expand their relations, without full unification 44%
Russia and Ukraine will undergo no change 9%
Ukraine will diminish its relations with Russia 2%
Ukraine and Russia will follow two separate and disunited courses 4%

How, in your opinion, will the relationship between Ukraine and Europe develop?
Ukraine and Europe will fully integrate 8%
Ukraine and Europe will expand their relations, without full integration 49%
Ukraine and European relations will undergo no change 12%
Ukraine will diminish its relations with Europe 3%
Ukraine and Europe will follow two separate and disunited courses 6%

As we can see, Ukrainians prefer the expansion of bilateral relations to a unification of Ukraine and Russia into a new union. It contradicts the idea to reanimate the former Soviet Union which is still advocated by certain political forces of the newly elected parliament's left - wing. In fact, public opinion favors the development and strengthening of Ukraine's relationship with Russia, but this does not suggest that the citizens of Ukraine wish to return to a renewed USSR-II. It is quite significant that the number of respondents who support the expansion of relations with Europe (49%) now exceeds the number of those who are for the expansion of relations with Russia (44%). It is also interesting to note that Ukrainians at large are rather pessimistic about Ukraine's chances of fully integrating into Europe at this stage (8%).
One thousand two hundred people, of diverse backgrounds, were questioned for this survey.


According to the data published by the State Committee for Statistics, during the first quarter of 1998, industrial output in Ukraine slowly began growing, for the first time since the economic recession hit Ukraine. The 1.7 percent increase in the nations industrial output in the first quarter of 1998, can be favorably compared with the 6 percent decrease experienced during this same period last year. Non-ferrous metal work, wood processing and pulp-paper making, as well as the chemical and petrochemical industries reported record growth and progress. Unfortunately, energy and resource consuming industries show no sign of a decrease in waste. Of the total industrial output, their waste has reportedly risen two points since 1997, reaching 54.5 percent in the first quarter of 1998.


On May 13, the Foreign Investment Advisory Council, a consultative council on foreign investment in Ukraine which is comprised of thec CEOs of high- profile foreign companies operating in Ukraine (i.e. Boeing, Coa - Cola, British Petrolium, Daimler Benz, Deutsche Telecom, EBRD, FIAT, Ernst and Young, Daewoo, etc.) and high -level officials of Ukraine's government, held its second plenary session in Kiev. The members of the Council noted positive changes in the social - economic situation in Ukraine, and stressed the need for joint efforts to find ways of solving the problems of financial stabilization in the country, the acceleration of structural reforms and the improvement of living standards for Ukrainians. The Council members took part in the final meeting of the following working groups:

The Council was addressed by the President of Ukraine, Leonid Kuchma. The heads of the working groups reported to the Ukrainian President on their conclusions and recommendations. The participants reviewed the Council's activity for the first half of 1998 with special emphasis on the drafting of a bill aimed at the improvement of entrepreneurship and investment in certain sectors of Ukraine's economy. In particular, they stressed the importance of the recently adopted Law on Entrepreneurship which foresees considerable reduction of licensing for business activities. The Advisory Council affirmed the need to focus attention on the further formation of a stable, integral, developed and predictable legal basis for investors’ activities, free from retro-active changes, on the speeding up of the deregulation of the economy, in the first place by drastic simplification of business -establishment procedures, improvement of the tax system and by the creation of modern market intrastructure. Members of the Council stressed the need for efforts in promoting an impartial and unbiased image of Ukraine, most notably in mass media. It was noted that successful hosting of international fora, such as the annual meeting of the European Bank for Reconstruction and Development recently held in Kiev, considerably improves Ukraine's rating on the international arena. The Council paid special attention to the importance of more active dialogue with associations of businesmen and financists, and more concrete cooperation with companies, banks and international economic and financial institutions. The participants expressed their mutual satisfaction with the results of the meeting and underscored the necessity to increase their activities in order to achieve practical results in attracting foreign investment in Ukraine.

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