Publication: Monitor Volume: 6 Issue: 78

Russian President Vladimir Putin, who began a visit to Ukraine on April 17, was preceded and in some ways upstaged by U.S. Secretary of State Madeleine Albright’s April 14-15 visit there. To Moscow’s barely disguised annoyance, Washington and Kyiv brought Albright’s visit forward to confirm publicly their partnership before Putin’s visit. An officially inspired commentary on Russian state television described the Ukrainian government as “more to Washington’s than to Moscow’s liking, a trump card in America’s dialogue with Moscow.” Possibly hinting at one of Moscow’s short-term objectives, the Russian commentary stated that “replacing the new Ukrainian government and its pro-Western prime minister would be disadvantageous to Washington, as Kyiv could then escape from the United State’s strong influence” (Russia’s Television, April 14).

In Kyiv, Albright indicated that Washington is encouraged by the new government’s fresh start on overdue reforms in the wake of President Leonid Kuchma’s reelection. She listed the energy sector, agriculture, the budget system, the public administration, the investment climate and the transparent privatization of state-owned industries as priority areas, in which the United States is prepared to assist the Ukrainian government’s reform efforts. In her discussions with Kuchma, Prime Minister Viktor Yushchenko and Foreign Affairs Minister Borys Tarasyuk, Albright announced that the United States would:

–Commit US$180 million in technical assistance to Ukraine. Raise foreign aid to Ukraine from US$195 million in 1999 to US$220 in 2000.

–Lobby the G-7 and European Union countries, at the upcoming donors’ conference in Germany, to finance the decommissioning of the Chornobyl nuclear plant, based on Kuchma’s recent decision to close down the plant by the end of 2000. Offer a US$78 million grant, and help raise additional funds, for completing two unfinished power blocks at the Rivne and Khmelnitskaya nuclear power plants to compensate for Chornobyl’s closure.

–Use American influence with the International Monetary Fund (IMF) to resume lending to Ukraine and with the World Trade Organization to accelerate negotiations with Ukraine, depending on progress on reforms. Consider granting Ukraine the “market economy” status–which entails relief from a range of antidumping measures–as well as the most-favored-nation status in trade with the United States on a permanent basis, pegged to progress of reforms in Ukraine.

–Create a special working group to coordinate these issues within the U.S.-Ukraine interstate commission.

–Fashion U.S. policy toward Ukraine in accordance with the principle, “the more determined the reform efforts, the stronger our support for those efforts.”

Although international security issues were not prominent on the agenda of this visit, the American officials and the Ukrainian leaders took stock of recent progress in the NATO-Ukraine relations of “distinctive partnership” (see the Monitor, December 23, 1999, January 31, March 6; The Fortnight in Review, January 7, March 17). The United States agrees, along with European allies, to finance the activities of the Ukrainian element of the Polish-Ukrainian joint battalion and Ukraine’s participation in the Kosovo peacekeeping operation under NATO command.

Kuchma pleaded for U.S. political and financial support for the projected Euro-Caspian oil pipeline, from Azerbaijan via Ukraine to Poland’s Baltic coast. That pipeline, “of European importance, would also enable Ukraine to extricate herself from the dependence on one supplying country,” Kuchma pointed out in a clear reference to Russia. Poland strongly supports the Ukrainian plan.

In a political signal of support for the new government, Albright both gave the green light for a visit by Yushchenko to Washington next month and signaled U.S. support for the resumption of the IMF’s Extended Fund Facility (EFF) program, without awaiting the completion of the second stage of the audit of the National Bank of Ukraine. That audit was triggered by allegations of NBU misuse of IMF funds. Those allegations surfaced in the wake of the elevation of the pro-Western Yushchenko from NBU chairman to prime minister of Ukraine. The audit has been a factor in delaying both the EFF’s resumption and Yushchenko’s maiden visit to Washington as prime minister (UNIAN, DINAU, April 14-16; Eastern Economist Daily (Kyiv), April 17).