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23 June 1998
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On June 22, President Leonid Kuchma met with visiting IMF First Deputy Managing Director Stanley Fisher. Commenting on the meeting, Mr. Fisher said that IMF's EFF loan to Ukraine appears highly likely to materialize. Following some inevitable formalities and adjustments, the IMF Board of Governors will be advised to endorse a $2 billion loan to Ukraine over three years, he said. According to President Kuchma's press secretary, the IMF top official underlined the decisive role of implementing Mr. Kuchma's recent package of economic edicts to get the IMF Board of Governors’ approval for the EFF deal with Ukraine. In turn, President Kuchma voiced his conviction that none of these decrees and enactments will be rejected by the new Ukrainian Parliament, so they all will become effective within a month's term. In Mr. Fisher’s words, the IMF will make its decision on the EFF program in a month or two following its mission to Ukraine, which is expected to arrive in Kiev in late July.


Commenting on the outcome of Prime Minister Valeriy Pustovoitenko’s meeting with Mr. Stanley Fisher, First Deputy Managing Director of the International Monetary Fund, Ukrainian Economics Minister Vasyl Rohovy said that the talks had dealt with structural reforms in Ukraine and the national budget's performance. The IMF mission has displayed understanding of President Kuchma's recent economic steps and reasons which have prompted Mr. Kuchma's legislative initiative decision, he said. Though this issue is entirely within Ukraine's competence, Mr. Fisher stated IMF's interest in making these edicts work. As Vasyl Rohovy stressed, the negotiations underway between Kiev and the IMF mission does not involve the replacement of the EFF program with the stand-by agreement, as someone hastened to inform the public. The talks entirely concentrate on the EFF loan and requirements Ukraine should meet to receive it. According to Mr. Rohovy, no exact figures of IMF's financing in the framework of EFF were mentioned at the meeting, though the likely sum may be around $2.5 billion. Before leaving for Moscow, Stanley Fisher and his team were to hold meetings with Deputy Premier Serhiy Tyhypko, the NBUGovernor Victor Yushchenko and influential parliamentarians. Mr. Rohovy referred to Kiev talks' general mood as optimistic.


"I am pleasantly surprised to learn to what degree the economic situation in Ukraine has improved over the last two-three months", Stanley Fisher, IMF First Deputy Managing Director was quoted as saying immediately after his meeting with Ukrainian Prime Minister. In Mr. Fisher's words, both IMF and Ukraine are singing the same tune, almost in unison, and looking in the same direction. According to Mr. Fisher, implementation of important political decisions and improved economic performance will allow the IMF to make its contribution to Ukraine's economic reforms with the issue expected to be shortly addressed by the IMF Board of Governors in the form of the EFF program for Ukraine. The Ukrainian premier was reported to have repeatedly stressed Ukraine's willingness to constructively collaborate with the IMF. Mr. Pustovoitenko also informed Stanley Fisher about most recent steps by the President and Ukraine’s government to improve the economic situation and cut budgetary expenditures through severe austerity measures. However, they will not involve cuts in social outlays, the Ukrainian Premier reassured the IMF First Deputy Managing Director.Ukraine's administrative reform, which is among IMF's prerequisites for granting loans, has assumed a practical dimension and its success is certain in view of the Ukrainian leadership's strong political will, Mr. Pustovoitenko said. He named Ukraine's wholesale market of electricity and natural gas, currently in the making, as the government's next top priority tasks. He also admitted that privatization processes still need a great degree of legislative regulation, and stated the government's intention to cooperate with the new Ukrainian parliament in a constructive way.


A World Bank delegation led by Paul Siegelbaum, WB Regional Director for Ukraine and Belarus, met in Simferopolwith the leader of Crimean government Sergei Kunitsyn to discuss issues of capital investments in the autonomous republic's economy. According to Paul Siegelbaum, the World Bank's prime targets in Crimea will be public and municipal development projects with small - size loans used to upgrade infrastructure and scarcely populated areas. Some of these projects may cost up to $20 million. However, the borrowers will have to invest between 25% and 40% of the projects' costs. In addition to this requirement, investments in any Ukrainian region should be implemented either in conjunction with the central government or against its guaranties. These two prerequisites were stated as the World Bank's mandatory terms for granting long-term low - interest loans to Ukraine. According to Sergei Kunitsyn, the new Crimean government places emphasis on the health resort and recreational complex which it views as a major source of budgetary revenues. Essential improvements should be made in Crimea's water supply and sewerage systems, too. The Crimean leader stated other problem such as social accommodation of returnees from among the once deported ethnic groups. According to him, about 300 new settlements in Crimea have no running water, electricity and sewerage. In his opinion, Crimean investment projects must get funding as quick as possible. Otherwise the process of Crimea's economic downfall threatens to irreversibly accelerate. According toMr. Kunitsyn, an early investment project is being implemented in Sevastopol aimed at preserving the Black Sea coast's biodiversity. The WB delegation's itinerary for Crimea envisaged also a trip to Sevastopol.


The World Bank delegation headed by Paul Siegelbaum came on a two-day visit to Odessa on June 23. During the visit, Mr. Siegelbaum will meet with local government representatives to discuss a broad range of issues involving provision of WB loans for financing major projects in the region: a residential housing project, construction of a corn factory, and acquisition of modern water purification technology. According to DINAU report, over $60 million is required for the water purification project alone. Mr. Siegelbaum is scheduled to meet with Deputy Prime Minister Mykola Beloblotskiy, who is currently the acting mayor of Odessa, Odessa Region’s administration head Serhiy Grynevetskiy, and representatives of district authorities. The WB delegation will depart for Dnipropetrovsk on June 25.


On June 23, the 6th International Automobile Show will open at the National Exhibition Center in Kiev. Dubbed MAS-98, the autoshowwill be among this year's biggest on the Center's territory over 20.000 sq. m. Over 200 automakers in 18 countries are expected to display their car models.


Some 200 construction companies of 25 nations have sent their specimen products to be displayed at the specialized international expo "Kiev-Construction-98" which opened in the capital city of Kiev on June 22. As it was stated at the expo opening ceremony, the number of exhibits has almost doubled this year which reflects construction businesses' leading role in Ukraine's economy. The expo is to display state-of-the-art construction technologies, materials and accessories ranging from roofing and flooring to heating devices, ceramics, furniture items and fire-control equipment.

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