[22.11.03]

The third Ukrainian peacekeeper died in Iraq. Captain Oleksii Bondarenko shot himself (November 18). He left a death note asking not to blame anybody in his death.

Earlier two Ukrainian peacekeepers died as a result of accidents.

Since September this year 1,656 Ukrainian peacekeepers have been in Iraq.

A trip of the Ukrainian Foreign Minister to Iraq is planned to take place early in December.

Parliamentary factions "Regions of Ukraine" and "European Choice" have merged. This merged faction encompassed 64 legislators (out of 450) and it became the second largest in parliament after the "Our Ukraine" faction (103 lawmakers). This faction is the main support for Prime Minister Yanukovich whose position was somewhat strengthened (earlier only 47 lawmakers were in the "Regions of Ukraine" faction).

On November 19 four opposition factions in Ukrainian parliament: "Our Ukraine", the Bloc of Yuliya Tymoshenko, the Communist Party and the Socialist Party signed a declaration on joint actions. However, judging by all appearances the sides understand the purport of this declaration differently. In particular, leader of "Our Ukraine" Viktor Yushchenko concurrently accused the Communists that they "admitted by the authorities to the leadership of parliament, now share with the authorities all responsibility for the situation in the country". On the other hand, if the left-wing factions bolster the constitutional reform, then "Our Ukraine", as far as one can judge, remains its determined opponent, while the BYuT’s position is not quite clear.

On November 18-19 the Committee of National Coordinators of the GUUAM held their meeting in Kiev. The U.S. representatives took part in it formally as observers. At the same time the experts are inclined to believe that the U.S. though is not a formal, but is an actual leader of the GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova).

Head of Ukraine’s Presidential Administration Viktor Medvedchuk on November 20 visited Moscow and conducted negotiations with head of Russia’s Presidential Administration Dmitry Medvedev. Medvedchuk was received by Russia’s President Vladimir Putin.

It is assumed that the main goal of the meeting was to improve anew the cooperation of the two presidents' administrations after the recent retirement of former Russia’s presidential chief of staff Aleksander Voloshin.

Prime Minister of Ukraine Viktor Yanukovich took part in the summit of the heads of government and the Sixth Economic Forum of the Participating Countries of the Central-European Initiative (CEI) in Warsaw (Nov. 20-21).

Ukraine’s government began its negotiations with the U.S. on a possibility of obtaining a credit for purchasing 1 million tons of grain.

Ukraine and Israel signed an agreement on the settlement of claims that emerged as a result of the accident of a TU-154 aircraft over the Black Sea, which was downed by a Ukrainian missile in October 2001. The aircraft was shot down by a Ukrainian missile during military exercises (an accident), the agreement deals with compensations for the next of kin of the dead.

As stated by both sides this agreement makes it possible to draw a line under a dispute, which for two years marred relations between the two countries.

On November 20-21 Ukraine’s Minister of Foreign Affairs visited France with a working visit.

Foreign investments in Ukraine

A characteristic feature of Ukraine’s economic growth is an extremely low, compared with other post-socialist countries, level of direct foreign investments (DFI). So far they have not become a substantial factor for a sufficiently intensive economic growth recorded since the year 2000.

But even in this field certain positive changes take place. In the first half of the current year an increase of the net input of DFI to the country doubled, and a positive tendency was recorded also following results of 9 months.

The scope of DFI in Ukraine as of October 1, 2003 was USD 6,212.9 million, which is USD130 per one citizen of Ukraine. An increase of the foreign capital in January-September was USD741.6 million (approximately the same amount was recorded for the whole 2002).

At present only USD130 of foreign investment fall on one Ukrainian citizen.

To date DFI have arrived from 114 countries of the world and the largest investments were made by the non-residents from the U.S. - USD1,019 million (16.4% of the total volume), Cyprus - USD647.6 million (10.4%), the United Kingdom - USD628.9 million (10.1%), the Netherlands - 434.5 million (7.0%), Germany - USD387.6 million (6.2%), Virgin Islands (British) - USD371.8 million (6.0%) and the Russian Federation USD354.9 (5.7%).

The data of official statistics do not fully characterize the real scope and structure of DFI, which is explained by the phenomenon of "gray economy" whose extent in Ukraine is still considerable (in particular, the data on real Russian investment have been substantially understated).

As a result of a conflict between the Russian authorities with big business many Ukrainian experts predict a substantial growth of Russian investment in Ukraine.

The most investment-attractive in Ukraine are enterprises of food industry and agricultural processing industry (15.2% of the total volume of investments), wholesale companies and trade intermediacy (14.7%), engineering (9.3%), transport and communication (7.8%), metallurgy and metal working (5.3%), chemical and petrochemical industries (5.0%) and also organisations engaged in financial activities (7.1%).

Traditionally foreign experts predict reduction of DFI on the eve of elections. But as experience shows in reality this factor does not have a decisive impact on the capital inflow to the country.

The economic situation on the whole in recent years has been developing in Ukraine without a tangible relation to the development of the domestic political situation. Therefore there are no serious reasons to believe that in 2004 the scope of foreign investments will be substantially reduced. At the same time, so far there are no preconditions for their substantial growth either.