KUCHMA PREPARED TO MAKE SUBSTANTIAL ECONOMIC CONCESSIONS TO MOSCOW.

Leonid Kuchma began yesterday the first state visit to Russia by a Ukrainian president after more than six years of Ukrainian independence. Both sides regard the visit as crucial help to Kuchma and his camp in the upcoming Ukrainian elections. On the eve of the visit, Kuchma appeared prepared to pay a high price for such support, and Moscow appeared set to cash in.

On February 24 and 25, a large delegation of Russian industrialists, bankers and government officials met in Kyiv with Kuchma and other senior Ukrainian officials to confer on boosting economic relations. The talks focused on the participation of Russian capital in the privatization of Ukraine’s industry and energy sector through Russian acquisition of shares or by turning Ukrainian enterprises into joint Russian-Ukrainian ones. Discussions centered on Ukraine’s leading oil refineries, oblast power plants, nonferrous metal plants, Ukrainian Telekom, grain elevators and (apparently) selected defense plants. The Ukrainian side also supported a two-fold plan, first, to acquire Russian nuclear reactors on credit for completing the Rivne and Khmelnitskaya nuclear power plants and, second, to rely on supplies of Russian nuclear fuel for this sector in Ukraine.

Ukrainian Prime Minister Valery Pustovoytenko and the deputy head of the presidential Defense and Security Council, Aleksandr Razumkov, appeared to take the lead in supporting the proposals. Razumkov stated, with reference to some of the proposed takeovers, that Kyiv would not give up the "controlling" packages of shares. He was, however, also cited as proposing that both sides strive to increase Russian investment in Ukraine to 50 percent of total foreign investment in the country.

These ideas are also contained among the more than 100 points of the Russian-Ukrainian ten-year economic cooperation plan, initialed last week in Kyiv by Pustovoytenko and Russian Prime Minister Viktor Chernomyrdin, and due to be signed by Kuchma and Russian President Boris Yeltsin at the summit now underway. (Russian and Ukrainian agencies, Eastern Economist Daily, DINAU, February 25-26)

Political Backlash in Kyiv.