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25 May 1998
For immediate release
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PRESIDENT KUCHMA ENDORSES APPOINTMENT OF SERGEI KUNITSYN HEAD OF CRIMEAN GOVERNMENT
President Leonid Kuchma has endorsed the appointment of Sergei Kunitsyn as head of government of the Crimean Autonomous Republic. President's decision followed his recent meetings with Leonid Grach, the newly elected Crimean Supreme Soviet's speaker, and Sergei Kunitsyn, which gave the head of Ukrainian State good grounds to hope that cooperation between the Crimean parliament speaker and the Crimean Prime Minister will be constructive and productive.
PRIME MINISTER CALLS FOR GREATER COOPERATION BETWEEN PARLIAMENT AND GOVERNMENT
Prime Minister Valery Pustovoitenko said on May 21, that the government's strategic goal is to establish closer working relations with Parliament. He told a meeting of the Cabinet of Ministers that the government now more than ever needs to improve cooperation with Parliament. Mr. Pustovoitenko disclosed that the government drafted laws aimed at boosting state budget revenues and improving revenue collection. All the draft laws have been approved and sent to Parliament for consideration, with the exception of four draft laws on perks and privileges. He said the government intended to further study draft laws before sending them to Parliament. Mr. Pustovoitenko said the future of the Ukraine's economy depends on implementation of these laws, most notably on the VAT, the Innovation Fund, privatization, and many other issues connected with boosting state budget revenues and timely payment of wages and putting an end to wage arrears. In his words, the laws are aimed at stabilizing the economy and inducing economic growth. Mr. Pustovoitenko called on ministerial and departmental officials to work with parliamentary fractions and commissions to ensure adoption of the laws.
PRIME MINISTER SAYS MINERS' STRIKE IS SIGNIFICANTLY POLITICAL
Prime Minister V. Pustovoitenko has said that miners were encouraged to go on strike by persons not interested in the stability of the government and the executive branch of government. He told a Cabinet of Ministers meeting on May 21, that a stable government was required to improve the economy. The Prime Minister considers the miners' strike in the Dnipropetrovsk region as ''an excuse for forces seeking the government's resignation to play their political cards.'' He noted that the Hromada Party has begun collecting signatures for the Cabinet's resignation. This not withstanding, he said the government needed to do everything possible to prevent the strike from spreading to other regions. Mr. Pustovoitenko stressed the government was fulfilling its obligation regarding state financing of mines, adding that the government is also funding the construction of new mines from the Amortization Fund. He said 70 million hryvnia would be allocated for purchasing winter coal reserves.
PLEDGING CONFERENCE ON RESETTLING CRIMEAN TARTARS POSTPONED
The International Pledging Conference on raising funds to resettle Crimean Tartar returnees which was to be held in May under the OSCE's auspices, has been postponed to June. According to Ukrainian Vice-Premier Valeriy Smoliy, who met with OSCE High Commissioner for ethnic minorities' affairs Max van der Stoel on May 19, the Conference has had to be postponed because of flaws in its organization. As the Vice-Premier regretfully stated, only the USA has intimated its readiness to allocate money to solve social accomodation problems of Crimean Tartars, though the conference's organizers and the Ukrainian Government sent messages to as many as 22 nations inviting them to join the international effort to share Ukraine's financial burden involving Crimean Tartar returnees' resettlement. Yet the OSCE High Commissioner has tipped off that several other nations have intimated their tentative plans to join the USA in financing implementation of Ukraine's scheme for the ex-deportees, Mr Smoliy said. The OSCE High Commissioner made a working trip to Ukraine on May 17-19 which also involved a fact-finding mission to Crimea where M. van der Stoel and high-placed officials discussed the ways to simplify procedures for granting Ukrainian citizenship to Crimean Tartar returnees coming basically from Uzbekistan. The OSCE High Commission sounded rather cautious commenting to the reporters the future Conference's likely outcome saying he will continue addressing OSCE member-nations trying to persuade them, both on the official and unofficial level, to contribute financially to Ukraine's effort to solve the problem of Crimean Tartar returnees.
TURKISH PRESIDENT DEMIREL BEGINS VISIT TO UKRAINE
Turkey's President Suleiman Demirel began a three-day official visit to Ukraine on May 21. Addressing journalists at the airport, Mr. Demirel said the aim of his visit was to develop both bilateral and multilateral cooperation with Ukraine. The Turkish president is also expected to visit the Crimea on May 23 for meetings with Crimean officials and Crimean Tartar leaders. President Suleiman Demirel's official visit to Ukraine is aimed a deepening bilateral Turkish-Ukrainian cooperation. He told journalists on May 20 that visit was expected to significantly broaden the legal basis for development of Turkish-Ukrainian relations. The Turkish president and Ukraine's President Kuchma are expected to sign a joint communique, a Consular Convention, and intergovernmental agreements on defense cooperation, environmental protection, education, and medical research. An intergovernmental protocol on a Turkish commodity loan of $20 million to Ukraine and a protocol on exchange of notes on ratification of the Turkish-Ukrainian agreement on investment's protection and encouragement are also expected to be signed during the visit.
AUSTRIAN FEDERAL CHANCELLOR CALLS FOR GREATER AID TO UKRAINE
On May 20, Austrian Federal Chancellor Viktor Klima called for greater aid to Ukraine in overcoming its economic problems and integrating with the European Union, speaking at a Danube region conference on ''economic prospects of European integration.'' The conference was attended by delegations from Bulgaria, Croatia, the Czech Republic, Hungary, Germany, Romania, Ukraine and a number of other European nations.
IMF DIRECTOR CAMDESSUS ARRIVES TO KIEV FOR TALKS WITH UKRAINIAN LEADERSHIP
International Monetary Fund Executive Director Michel Camdessus will arrive in Ukraine on June 11 to hold talks with Ukraine's President Leonid Kuchma and Prime Minister Valery Pustovoitenko on the IMF's Extended Fund Facility loan program. According to a Cabinet of Ministers representative, ''at present, the question is not about agreeing [to] the terms of the memorandum but about inspecting implementation of the measures stipulated in it. All the necessary changes to the relevant laws are expected to be sent to Parliament before Camdessus' arrival. Regarding the starting terms of the loan program, which are within the competence of the executive power, the Cabinet of Ministers resolution and a presidential decree are expected to be adopted.'' ''Everything must be ready before Camdessus' arrival, since the fate of this year's Ukraine-IMF cooperation will be decided during the visit,'' he said. Meanwhile, the Cabinet of Ministers officials say many ministries have significant differences over several provisions of the economic policy memorandum that the government signed at the IMF's request.
UKRAINE'S CENTRAL BANK RAISES DISCOUNT AND LOMBARD RATE
The Board of the National Bank of Ukraine has made a decision to raise the discount rate to 45% per annum (+4%) and the Lombard rate to 50% per annum (+5%), National Bank of Ukraine Chairman Viktor Yushchenko told journalists. In his words, the new parameters of the discount and Lombard rates would be effective as of May 21 . Participants on the currency market attribute the National Bank of Ukraine's decision to a rise in interest rates in Russia, as well as the need to tighten monetary policy in May-July. "We analyzed the possible scenarios by week until July. The decision to raise the rates is adequate for the events that could take place on the market during that period," Mr. Yushchenko said. In May-July, the Finance Ministry is to pay out about 2,180 million hryvnia on government internal loan bonds; a significant share of redemption will be paid to foreign investors, which could destabilize the currency market. The Central Bank of Russia decided May 19 to increase the rates to 50% per annum due to deteriorating conditions on stock and money markets following an outflow of foreign capital. Bankers say Russian market conditions significantly affect foreign investors' policy on the government internal loan bonds market; Russian securities are an alternative to government internal loan bonds. Before May 21, the National Bank of Ukraine's discount rate was 41% per annum; the Lombard rate was 45% per annum; these values were set on March 18. Before March 18, the discount rate was 44%; the Lombard, 48%; bankers say the National Bank of Ukraine decided to lower interest rates as of March 18, in anticipation of better conditions on the government internal loan bonds and currency markets.
NBU WILL NOT SPEED UP HRYVNIA DEVALUATION IN MAY-JUNE
The National Bank of Ukraine will not speed up the existing pace of devaluation of the official exchange rate of the hryvnia in May and June, according to National Bank of Ukraine Chairman Viktor Yushchenko. "At present, the National Bank of Ukraine board does not see reasons for devaluation, deep further devaluation. If we analyze the load on the market that will arise in the next thirty days, with serious preparation we can cope with it without serious problems," Mr. Yushchenko said. Since the beginning of May, the official exchange rate of the hryvnia has dropped by 116 points (by about 0.6%), going from 2.0425 to 2.0541 hryvnia/dollars (an average of 8.9 points a day). In May and June, the Finance Ministry is to pay out about 1,300 million hryvnia on government internal loan bonds; a significant share of redemption will be paid to foreign investors, which could provoke a jump in demand for the dollar on the currency market. Bankers say most foreign investors on the government internal loan bonds market are now decreasing investments in the bonds, partially because of high exchange rate risks. According to preliminary estimations, the NBU decision to raise the discount and Lombard rates will lead to a drop in demand for the dollar on the currency market, due to hryvnia resources becoming more expensive. From November 1997 to February 1998, the NBU followed a policy of keeping interest rates at a high level and succeeded in stabilizing the currency market.
NATIONAL BUDGET'S DEFICIT STATED AT 5% OF GDP IN 1998'S 1ST QUARTER
According to the data made public by the State Committee for Statistics, the consolidated national Budget's deficit in the first quarter of 1998 amounted to 1,022.7 million hryvnias, or 5 percent of Ukraine's GDP.
UNEMPLOYMENT RISES TO 2.85%
According to the State Service of Employment, 1,098,600 unemployed people were registered in Ukraine in January-April of this year, 1.6 times more than the number registered for the same period of 1997. The national unemployment figure was 2.85% as of May 1. The unemployment figures for the Ternopil, Zhitomir, Lviv, Volyn, and Ivano-Frankivsk regions range from 4.30% to 5.58%.
AN-70 REPORTED BIG HIT AT ILA-98 AEROSPACE SHOW IN BERLIN
Ukraine's Antonov-70 advanced transport plane, in which Russia has a hand too, was a big hit at the ILA-98 international aerospace show in Berlin in which 825 manufacturers from 32 countries participated. The AN-70 made its first flight in West Europe that triggered multipartite consultations involving Ukrainian and Russian AN-70 manufacturers and FLA project member-nations which resulted in a "dual" agreement providing for parallel work on designing a new military transport plane by a group of nations, on the one hand, and German DAZA concern's further cooperation with the Antonov aircraft designer and manufacturer, on the other. The consultations are expected to be carried to the governmental and expert levels with the joint Ukrainian-German working commission for defense and military technical cooperation meeting in Berlin on May 20.
UKRAINIAN POULTRY FARMERS TO BE ASSISTED BY CNFA
The US-based CNFA public organization has launched a project aimed at assisting Ukrainian private farmers in poultry breeding through making American poultry-keeping technologies available to them.
PRESIDENT KUCHMA MEETS FEDERAL JUDGE FUTEY
On May 20, President Leonid Kuchma met in Kiev with Bohdan A. Futey, a prominent American lawyer, Judge of the US Court of Federal Claims, who took an active part in drafting the new Constitution of Ukraine. The meeting focused basically on problems involving Ukraine's reformation processes with Mr. Kuchma stressing the Ukrainian leadership's resoluteness to stick to its reformation course aimed at improving the Ukrainian people's living standards. In turn, Mr. Futey noted that the reform of Ukraine's legal system has greatly facilitated the process of the nation's statehood establishment. According to the US lawyer, the Parliament should pass legislative acts and bills on the judicial system and prosecution in Ukraine. During the meeting, the parties exchanged opinions about the current status of US-Ukrainian relations and the upcoming session of the Kuchma-Gore Bi-national Commission.
TARAS SHEVCHENKO PRIZES AWARDED
A festive ceremony was held at the Mariinski Palace in Kiev to award Taras Shevchenko Prizes to the nation's most prominent people of arts and letter with President Leonid Kuchma making the opening speech to greet the participants and presenting the awards to author Roman Andriyashyk, composer Mykola Dremlyuga, artists Mariya Lytovchenko and Volodymyr Pryadko, and Yevhen Savchuk, the "Dumka" academic choir's conductor and artistic director.