[13.06.03]

On June 7 President Kuchma sacked Vasyl Shevchuk, minister of ecology. The People's-Democratic Party, from whose quota Shevchuk was appointed a minister in the coalition government protested.

On June 7 President Kuchma signed the law on sending the Ukrainian peacemakers contingent to take part in the international peacekeeping operation in Iraq. It is planned that the contingent will be sent in mid-August.

On June 8 President Kuchma visited Bologna (Italy) following the invitation from head of the European Commission Romano Prodi. They conducted informal talks.

On June 10 President Kuchma met with the leaders of parliament to discuss the draft political reform. At the meeting he confirmed that the parliamentary elections should take place in 2004 (the opposition repeatedly expressed suspicions asserting he wanted to change the term of the elections). The president called for compromises and outlined provisions of the political reform proposed by him in which political forces are close to a consensus: the procedure of forming the government, formal reasons for terminating of Verkhovna Rada, etc. He referred to his proposal to hold the elections of the president, parliament and local councils within one year. This proposal provoked much debate. On June 13 President Kuchma said about his readiness to give up several proposals for the reform put forward by him and which caused criticism among the opposition: change-over to a two-chamber parliament and adoption of laws directly through referendums.

According to the information from the U.S. embassy in Ukraine, the U.S. department of defense reviews the projects implemented in Ukraine within the framework of the program of collective reduction of threat since some of them are not in line with priority tasks of non-proliferation and in addition may appear potentially too expensive. The funding of the project for utilization of solid missile fuel recovered from intercontinental ballistic missiles SS-24 has been terminated.

In 2001 Ukraine destroyed missile launching silos and started to utilize 46 solid-fuel missiles SS-24 deployed in the Ukrainian territory. Pursuant to the Ukrainian-Russian memorandum signed in 2001 on cooperation in utilization of solid-fuel strategic missiles SS-24 and PCM-52, utilization of the first stages of Russian strategic SS-24 will be held in Pavlograd.

At the end of 2000 the U.S. Congress allocated some US$ 24 million for implementation of the project providing for the construction in Ukraine of a plant for destroying solid-fuel missiles SS-24.

Earlier Ukraine destroyed 136 missile launching silos for intercontinental ballistic missiles PC-18 (SS-19) and a strategic aviation task force. By the Summer of 1996 Ukraine completely transferred nuclear warheads to Russia in exchange for nuclear fuel for nuclear power plants. By the beginning of 1994 Ukraine had some 1,300 warheads for intercontinental ballistic missiles and over 600 warheads for air-based cruise missiles.

On June 12 prime minister Viktor Yanukovich visited Moscow to mark the Day of Russia. He met with President Putin and prime minister Mikhail Kasianov.

On June 11 Ukraine was visited by secretary of Poland's Bureau of National Security Marek Siwiec. The topics of the talks were: an anniversary of the Volyn tragedy (deaths of several ten thousands of ethnic Poles in 1943 which still remain a stumbling block in relations between Ukraine and Poland) and the sending of the Ukrainian peacekeepers to Iraq.

The parties of the talks agreed to conclude an agreement on Ukrainian-Polish cooperation within the framework of Iraq's post-war recover.

On June 12-13 Brussels, the NATO headquarters, was the venue for the Ukraine-NATO Commission.

The NATO Council of Ministers held concurrently made a decision to use the Ukrainian aircraft AN-12-100 (Ruslan) as one of the main transport aircraft for strategic transfers in NATO's interests for the period till 2010. It will be used in 12 NATO countries (including Canada, but excluding the USA and Great Britain).

Leader of the Our Ukraine bloc, Viktor Yushchenko, said a common candidate for the presidency will be nominated by the democratic rather than opposition forces. The experts believe that thus he tries to keep his distance from three other opposition blocs in parliament (the Communists, the Socialists and the Yuliya Tymoshenko bloc) and build its campaign of a presidential candidate on a somewhat different footing. One may think that although the support enjoyed by the opposition in Ukraine is rather substantial, but below 50%, the candidate who announced himself as the one belonging to the opposition will have a slim chance for success.

Former vice primer Leonid Kozachenko who was under arrest in connection with accusations against him on June 12 was released on bail.

Ukraine managed to place European bonds to the amount of US$ 800 million.

According to the annual world report presented by the U.S. State Department, Ukraine's government exerts much of its efforts to combat human traffic; nevertheless so far the situation in Ukraine does not meet minimal standards in this field. The report says that insufficient cooperation between central agencies of power and corruption at different levels have become a major obstacle for implementation of efforts planned by the government.

The report has divided all countries into three groups depending on how they observe international standards in the field of combating human traffic.

This year Ukraine has been referred to the second group which indicates that the country does much on the path of achieving complete conformity to international standards in this field.

The National Council of Journalist of Ukraine awarded Nina Karpacheva, Verkhovna Rada Human Rights Representative, with the Ivan Franko prize. Her activities were also highly praised by British Ambassador Robert Brinckley.

Economic growth in Ukraine has sped up

In January-May the real gross domestic product in Ukraine grew 7.3% compared with January-May last year (in January-April the increase of the relevant indicator was 7.1%).

The GDP growth continues a tendency recorded since the year 2000 - then for the first time over 10 years of Ukraine's independence the GDP was renewed and the increase amounted to 6%.

In 2001 the GDP grew by 9% and 2001 it grew 4.1% up.

The indicators of the current January-May period are much in excess of forecast predictions of both Ukraine's government, Ukrainian and international analysts.

Despite a serious bad harvest of grain crops the outcomes of this year may give a prediction for a 5-6% growth in the GDP (although Ukraine's ministry of economy has not yet reviewed its forecast for a 4% GDP growth in 2003).

Starting from January 1, 2004 Ukraine dramatically reduces its income tax rate. It will be flat as in Russia and will amount to 13%.

It is planned that it will be conducive to that a portion of economy will become legal and will go out of gray (now the share of the gray sector of economy in the total volume of the GDP accounts for 50-60%).

And this, in its turn, will provide additional impetus for improving the official GDP indicator.

Foreign trade growth

In January-April 2003 the volume of Ukraine's foreign trade amounted to US$ 13,250.8 million, which is 28.4% higher than over a similar period last year.

Commodity export in January-April grew by 27.8%: up to US$ 6,828.8 million, import increased by 29.1%: up to 6,422 million. Favorable balance amounted to US$ 406.8 million (by 9.8% higher than last year).