[16.05.03]

Deputy Assistant Secretary for European and Eurasian Affairs at the U.S. Department of State Steven Pifer visited Kiev on May 14 and met with President Leonid Kuchma. They discussed possibilities for Ukraine's participation in stabilization forces in Iraq and restoration of Iraq (in particular, in rebuilding bridges, roads, tunnels and water supply systems).

Pifer said that the talks were held in the constructive atmosphere and that over the last 4 months a headway was made in relations between Ukraine and the U.S.

Speaking about Ukraine's participation in stabilization forces in Iraq (May 15) President Kuchma underscored that a decision authorizing the sending of such forces should necessarily be supported by parliament.

U.S. Ambassador Carlos Pascual confirmed information that President Kuchma's name is on the list of witnesses in the case against Ukraine's former prime minister Pavlo Lazarenko who is waiting trial in the U.S. being accused of money laundering. Kuchma's name is not on the list of persons invited to give testimonies submitted by the governmental side, but is on the list submitted by the defense..

May 13-15 was the venue for the UN International Conference in Support of Peace in the Middle East. Minister of Foreign Affairs of Ukraine Anatoly Zlenko called upon Israel and Palestine to start implementing the Road Map plan and corroborated Ukraine's readiness to promote the peace process. In particular, he proposed to conduct talks between the sides in Ukraine's territory and offered sending Ukrainian peacekeepers under the UN aegis.

On May 12 Kiev saw a closed session of the Monitoring Committee of the Parliamentary Assembly of Council of Europe. The committee members met with President Leonid Kuchma. They said that Ukraine had made substantial strides in fulfilling the PACE's requirements. The committee chairwoman Josette Durieur (France) stressed that "Ukraine moves to the European Community by its own way and at its own pace" and on this path it faced "problems".

On May 14 President Kuchma authorized Ukrainian representative Susanna Stanik to sign a protocol to the European Convention for fighting terrorism and an additional protocol of combating corruption.

On May 15-16 Wolfgang Thierse, president of Germany's Bundestag, visited Ukraine. He met Ukraine's leaders. The Ukraine-Russia-Germany gas-transport consortium was an important topic of their talks.

Ukraine's minister of defense Volodymyr Shkydchenko set off on an oficial visit to Moscow on May 16.

On May 11-17 leader of the Our Ukraine parliamentary faction Viktor Yushchenko visited Canada. Speaking there he in particular said that the forthcoming elections would be won by the opposition forces.

A case against former vise prime minister Yuliya Tymoshenko and the other accused took a scandalous turn. The accused, except Yuliya Tymoshenko, who enjoys lawmaker's immunity, for several months were in prison..

On May 13 the court lifted all accusations of Yuliya Tymoshenko and other defendants. The prosecutors immediately launched other accusations against them. Legislators, supporters of Tymoshenko, demanded to free forthwith four persons arrested in connection with the case and blocked the prison, using their lawmakers' immunity. Yuliya Tymoshenko stated that the lawmakers were beaten there, but this allegation causes much doubt.

Tymoshenko's followers tried to stymie the work of the Verkhovna Rada as they did in 2002. Nevertheless on May 15 parliament worked rather efficiently.

In particular, the European Charter of Regional Languages was ratified, the Criminal-Executive Code was adopted; the procedure for registration of entrepreneurs was streamlined.

On May 13 former first deputy governor of the National Bank of Ukraine Volodymyr Bondar was sentenced for 5 years of imprisonment. He was convicted with signing fraudulent agreements with foreign banks making Ukraine incur losses to the amount of US$ 20 million.

Viktor Yushchenko (former governor of the bank and Bondar's boss) referred to this decision as "an ordered political punishment". According to him "investigation had been under wild pressure".

Editor-in-chief of the popular newspaper Dzerkalo Tyzhnya Volodymyr Mostovoi was awarded with a German Prize for the Sake of Freedom and Future of Media. The awarding formula emphasized that he had worked under the situation of "threats and constant persecutions". President Kuchma instructed interior minister Yuri Smirnov and prosecutor general Svyatoslav Piskun to launch a probe into the case and find out what where the threats for Mostovoi.

As regards this Mostovoi said that all journalists of Ukraine were under threat and that it was necessary to ensure civilized conditions for all media operation without priorities whatsoever for Dzerkalo Tyzhnya. The foundation that gave this award complained of actions "by certain circles in Kiev", but it did not specified what "circles" are implicated.

A Ukrainian plane met with an dreadful accident in Congo. Depressurization occurred and some passengers were blown out of the plane by an air flow. Reports about the number of victims were quite contradictory.

53 servicemen from a battalion of Ukrainian peacekeepers in Lebanon were awarded with medal For Service of Peace. Ukrainian peacekeepers in Sierra Leone also were awarded with UN distinction badges.

Clashes between the right- and left-wing political forces took place in Lviv (Western Ukraine) on the Victory Day of May 9. Leaders of the opposition in Kiev said that "the incident between the right- and left-wing oppositionists in Lviv had not make a split in the opposition's ranks". Mind, at present the Communists and Socialists (left-wing parties) in parliament are in opposition just as the right-wing parties (Viktor Yushchenko's bloc and Yuliya Tymoshenko's bloc). Leader of the Sobor party - part of the BYuT bloc - Anatolyt Matviyenko apologized for these events.

Economic growth in Ukraine has sped up

In April this year the gross domestic product increased 7.4% up compared with April f last year; on the whole in January-April versus January-April 2002 the growth was 7.1% (it is much higher than last year, when a similar indicator constituted only 4.1%).

The greatest GDP growth was recorded in construction, generation of electric power and manufacturing industry.

The pace of industrial production accelerated as well. In April it was `13% compared with April 2002 and 11.4% over 4 months (in the 1st quarter the corresponding indicator was 10.7%).

In this case manufacturing industry enlarged its production by 12.4% (January-April 2003 against January-April 2002), extractive industry - only by 1.7%. There lies a cardinal difference between the situations in Ukraine and Russia, where industrial growth by 80-90% is determined by extracting industry's output (first of all, oil and gas).

A distinctive feature is the fact that substantial growth can be observed both in sectors serving the internal market (foods, construction and engineering) and the external market (first of all, metallurgy whose output enjoys steady demand on the developing markets in Asia).

A high economic growth in Ukraine, taking place against the background of world economic decline, makes it possible to have hopes for the increased investment attractiveness of Ukraine and the increased inflow of direct foreign investments, which to date have not played a substantial role in the development of Ukrainian economy (in contrast to other countries of Eastern and Central Europe).

Strengthening of financial stability may also be conducive to it. The first months of the current year displayed the best indices for the fulfillment of the state budget, which is characterized by stable revenue surplus.

The NBU's gold and currency reserves for the first time exceeded US$ 5 billion. As predicted by Serhyi Tyhypko, NBU governor, in 2003 they will increase by 36.4% from US$ 4.4 billion to US$ 6 billion (at the beginning of 2002 the NBU's reserves amounted only to US$ 3,095 million).