[23.05.03]

Domestic Developments

President Kuchma Again Calls on EU to Help With Chernobyl. At the opening of Pan-European Conference of environment ministers on 21 May in Kiev, Kuchma told the attendees that Ukraine cannot be left alone to face Chernobyl, "not only in terms of comprehending this univesal warning but also in terms of eliminating the consequences of the unprecedented disaster."

Comment: Financial pledges by the Europeans as well as the US to help Ukraine deal with the seriously damaged Chernobyl plant as well as other antiquated nuclear power plants in Ukraine have fallen short of the promises. Only last month, on the unniversary of the Chernobyl disaster, senior managers from that plant admitted that the Chernobyl facility remains unsafe.

President Kuchma Urges Ukrainians to Embrace Europe As "Home." Kuchma said in a televised Europe Day address to the country over the weekend that Ukrainians need to realize that "Europe is our home." He added that "the times require all of us to make appropriate changes to own political habits and likes, and to be ready to give up the authoritarian legacy of the past." Kuchma went on to say that "an important tool in bringing Ukraine closer to European standards is political reform. It’s aim is to plant onto Ukrainian soil the parliamentary-presidential republic, the governance model that is predominant in Europe."

Comment: Kuchma’s own efforts at reforming the political system to inject more balance between the executive and the legislative branches of government are facing stiff resistance from the opposition bloc. This block does not believe that Kuchma really is going to reform the system. Moreover, this block is made up of diverse forces ranging from the ultra-nationalist groups on the right to the communists on the left.

New Lawmaker Joins Ukrainian Parliament. Valerij Borzov was sworn in as parliamentary deputy on 20 May. Borzov, is a Social-Democrat, replaces lawmaker Mykola Pesotskyy who was appointed to head the State Reserves Committee and had to give up his deputy’s mandate.

Comment: Borzov, now chairman of the Ukrainian Track and Field Federation, won two gold medals at the Olympic Games in Munich in 1972, running the 100-meter and 200-meter dashes for the Soviet Union.

Crimean Tartars Mark Anniversary of Deportation. Some 12,000 people took part in a rally in Crimean capital of Simferopol on 18 May to commemorate the 59th anniversary of the deportation of the Crimean Tartars from Crimea by Stalin regime.

Comment: Some 275,000 Tatars, who are Moslem, reside on the Crimean peninsula, with at least as many believed to live in exile in the Middle Asia (former Soviet republics).

Former Deputy Governor of the National Bank Gets Jail Term. Ex deputy governor of the National Bank Voldymyr Bondar was sentenced to 5 years in prison last week for signing fraudulent agreements that led the National Bank to loose some $20 million.

Comment: Bondar’s former boss and ex governor of the National Bank Victor Yuschenko characterized the sentence as a witch-hunt and called the charges trumped-up.

Foreign Policy Developments

Russian foreign Minister Visits Ukraine. Russian Foreign Minister Igor Ivanov met with his Ukrainian counterpart Anatoliy Zlenko in Kiev on 19 May. The two signed a number of addenda to a Russian-Ukrainian border treaty and pledged to work towards its speedy ratification. Both ministers reportedly also discussed the division of property of the former Soviet Union abroad. Ivanov also met with President Kuchma and Speaker of the Parliament Lytvyn.

Comment: Relations between the two countries have become closer over the past two years and is reflected in frequent exchanges at the top leadership levels. Defense Minister of Ukraine Shkidchenko visited Moscow last week and Russia’s President Putin spent a week in Crimea earlier this month where he held several meetings President Kuchma. For his part, President Kuchma is planning to travel to St. Petersburg next week for the tri-centennial celebrations of that city. There he will meet again with President Putin.

Senior State Department Official Visits Kiev. Deputy Asistant secretary for European and Eurasian Affairs Steven Pifer visited Kiev last week and met with President Kuchma. The talks centered on the possibilities of Ukraine’s participation in the coalition-led peacekeeping force and participation of Ukrainian companies in the restoration of Iraq, particularly in rebuilding bridges, roads, tunnels and water supply systems.

President Kuchma commenting about Ukraine’s participation in peacekeeping forces in Iraq stressed the importance of Ukrainian parliament in the final decision.

Comment: Official US-Ukrainian relations have taken a turn for the better over the last four months. The primary reasons for this upturn in bilateral relations is President Kuchma’s decisions to provide a battalion of experienced Ukrainian troops to assist Kuwait with possible chemical attacks and to provide air-lift capabilities to supply coalition forces during the war.

Kuchma’s actions were all the more noteworthy in view of widespread domestic opposition to US-led action military against Iraq-polls in Ukraine were showing that some 90 percent of the populations were against it and close to 50 percent of the members of parliament did not support it.

Economic developments

Standard and Poor’s Elevates Outlook for Ukraine From Negative to Stable B Rating. Rating agency Standard and Poor’s (S&P) said on 20 May it had raised its outlook for Ukraine’s external debt to stable from negative, citing the country’s committment to iInternational Monetary Fund negotiations.

S&P affirmed Ukraine’s B long-term external debt rating and B short-term rating.

Comment: The announcement may boost Ukraine’s chances as it tries to borrow on international debt markets, offering the country’s first new bond since the country was hit

by the 1998 financial crisis.

Ukraine is rated B2 by Moody’s Investors Services and B by Fitch Ratings. All these ratings are firmly within the speculative grade range, which restricts Ukraine to a narrow range of potential investors.