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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Stephen PIFER: "Our main task is help Ukraine pull itself up"

10 November, 1998 - 00:00

People in Ukraine have always taken a keen interest in the United States,
due to its level of development, its ethnic Ukrainian community (Diaspora),
and its being prepared to help our young national state.

But perhaps at the current stage the relationship between the two countries
is more like strategic dependence? How is Ukraine actually regarded overseas?
This and other questions were posed US Ambassador to Ukraine Stephen Pifer
invited to The Day's round table along with Embassy officials Mary
Kruger, Ken Moskowitz, and Vadim Kovalyuk. Mr. Pifer believes that Ukraine
has a good chance now to show the rest of the world how different it is
from Russia which still has not determined its course. Among other things,
he pointed out that the Ukrainian government is handling the financial
crisis adequately, and that US-Ukrainian relationships can be referred
to as partnership; Washington's and Kyiv's stand with regard to Kosovo
is identical, except for minor technical distinctions.

Q: Your mission in Ukraine is at a time when we are actively trying
to clarify the processes underway here. Of course, we are interested in
your opinion; what are your impressions of the reforms in Ukraine?

A: Sometimes Americans tend to be impatient about reform, and
what I try to do is to remind them to look at Ukraine and see not just
the problems but to look at the progress that's been made over seven years.
Our impression is that the National Bank and government of Ukraine are
doing a pretty good job of coping with the crisis. And we think there's
an opportunity here for Ukraine to take advantage of the crisis situation.
I know many in the West sometimes seem to think of Ukraine and Russia as
one, and now there's an opportunity for Ukraine to differentiate itself
from Russia. The IMF and World Bank loan programs have given Ukraine some
breathing space, a bit of time to work with, and it's important that Ukraine
take maximum advantage of this to pursue deregulation, rationalize the
tax system, and basically make it easier for businesses to operate here.
And as this happens, I think we would have greater business activity on
the part of Ukrainians, plus greater foreign investment, which I think
would be a real engine for economic growth in the country. And a number
of the pieces are already in place, for example, the decrees on deregulation,
but the key question now is going to be the implementation.

Q: Is there a possibility that the President won't be able to come
to terms with Parliament after its resolution on the poverty line, because
it contradicts IMF parameters? Or is this decision yet another populist
maneuver, reflecting how difficult it is to implement presidential decrees?

A: If that is a problem, and a number of the steps advocated
by the IMF have to be extended a month or so, they are hard steps politically.
But I think that one must argue that if you take those steps together,
that would be a road map on how to move Ukraine more quickly to an economy
that can be more closely integrated into the global economy. So I guess
our whole business and the hope of a good portion of the international
financial community is that the executive branch and Verkhovna Rada are
going to find a way to work together and that they will be able to take
steps which admittedly are going to be painful but six to eight months
down the road are going to begin to show themselves in terms of a positive
transformation in the economy in terms of creating new jobs and economic
growth.

Q: You will probably agree that unpopular decisions should be made
by popular leaders or a popular government. In Ukraine, rigid IMF requirements
are set against the backdrop of spreading anti-Western sentiments. Could
this discredit the very idea of reform?

A: I think there is a risk, but I hope that people bear in mind
that the IMF programs were worked out in conjunction with the Ukrainian
government after extensive negotiations. The IMF on the one hand is saying,
"I think you should do these steps," and as Ukraine comes down that path
the IMF and the West are prepared to support Ukraine in doing so. But if
you look at countries like Poland, Hungary, and the Czech Republic, they
went through that period of economic pain, and then built the basis for
economic growth. What we see as our task as is to push Ukraine along so
it can get through the bottom half of the curve to get on the upper part.

Q: What do you think made US Congress demand that IMF stop giving
"friendly" aid (as was often the case with Russia)? Will the IMF reform
serve to enhance Western pressure on the Ukrainian Cabinet? Until now it
was generally believed that IMF was just controlling the budget deficit
in this country.

A: I guess I would disagree that the suggestion that IMF decisions
are made on a personal basis. The IMF gives not grants; they are loans
and the IMF wants and needs some assurance that there's an economically
sensible course that allows the IMF five or six years down the road to
feel it will be repaid. I'm not going to tell you that this process is
totally devoid of any political influence.

From the point of view of the United States the IMF still remains a
very important tool for coping with the international financial problems
and also for assisting economies in transition. The fact that we are going
to replenish our contribution with $18 billion is a pretty good indicator
that the IMF is a serious and necessary institution. Whatever changes there
might be in the way the IMF does business in terms of how it decides to
operate, I don't think they will have an impact on the programs that have
been funded. It uses a series of economic indicators, not just the budget
deficit, which are examined on a regular basis. But it also has a series
of about 19 actions which Ukraine will be taking over the course of the
program. It is our belief that by implementing that program two years from
now the Ukrainian economy is going to be much more closely integrated into
the global economy, and it's going to be a much stronger economy.

Q: Ukrainian Ambassador to the US Yuri Shcherbak says Ukrainian goods
appeared on the US market, proving quite competitive, but a year and a
half or two years ago those products disappeared from American markets.
How would you explain this?

A: My sense over the last five years is that American exports
to Ukraine and Ukrainian exports to the United States have both been going
up although not as fast as either the United States or Ukraine would like.
I would say that the American market is the most open in the world. I think
what Ambassador Shcherbak may have been referring to is that there are
maybe four or five anti-dumping actions against Ukrainian exporters to
the United States, and these are the result of a quasi-legal process which
considers evidence that, first, an American industry has been damaged by
imports and also that the imports coming into the country are being produced
at an unfair advantage. In both cases, when a decision has been reached
that dumping has occurred there has been a negotiated process between the
United States and Ukraine that normally suspends the action and allows
a certain amount of exports of the good in question. And we've also provided
to Ukraine through the Gore-Kuchma Commission information that if Ukraine
wishes to challenge one of those decisions or if circumstances have changed,
the process can currently go forward.

Q: What do we actually have in terms of the Ukrainian-US relationship?
Strategic partnership, as officially declared, or the strategic dependence
of Ukraine on the United States?

A: I would use the term strategic partnership. What is in agreement
is that the two countries have a number of common interests and that by
working together we will both advance those interests. And you see the
same thing in the discussions we have ongoing regarding how a more secure
and stable Europe should be shaped. It's also in terms of how we feel about
each other and how we work together on certain issues that I call post-Cold
War questions, issues like counter-proliferation, efforts against international
crime, and those sorts of transnational issues, where I think there is
a common American-Ukrainian interest. Another more recent reflection of
the partnership is the dialog that we've had ongoing between the United
States and Ukraine on Kosovo. This is an issue of concern to Ukraine, and
we ought to be talking so that Ukraine understands where United States
policy is going on this issue.

Q: We would be interested in knowing what Ukraine's position was
on Kosovo. Whose stand do you mean: the President's, Cabinet's, or Parliament's?

A: Let me explain what the Ukrainian government has communicated
to me, which I think has actually been fairly clear. Let me step back for
a second: it is not the American or NATO desire to drop bombs on Serbs.
NATO's preparations for the use of force were designed to achieve a political
end, which was to bring the Yugoslav military and security forces to halt
the war that they were conducting and also to bring President Milosevic
to comply fully with UN Security Council resolution 1199. And the United
States and Ukraine share exactly the same view that what is required here
is full compliance with Security Council resolution 1199. I think the difference
that we had with the Ukrainian government was a technical question: the
United States and NATO believed that the combination of resolution 1199
and noncompliance by President Milosevic would be sufficient to justify
the use of force. What we heard from the Ukrainian government was that,
while the Ukrainian government did not necessarily rule out the use of
force, the Ukrainian government felt that what was needed was a new Security
Council resolution that specifically authorized the use of force.

Q: Suppose an old friend of yours asked you to comment on what's
going on in Russia, considering the geographical closeness of your present
mission. What would you have to say?

A: A year and a half ago when I worked at the National Security
Council I was responsible for Russia as well as Ukraine. I have to say
one thing that I said to myself many times in the last four months, thank
goodness my work only requires me to be involved in Ukraine. I think Russia
is going through a very complicated situation. I think that Russia has
not yet decided where its strategic course is going, and so you have a
hesitation that in this period in effect amplifies what has ensued from
the economic crisis. Certainly, I hope that the Russians can come to grips
and begin to find a way out of this situation and begin to get on a path
to a stronger economy.

Q: It is very difficult for the average Ukrainian to get a US visa.
Why? Is it because the US authorities are afraid of the Russian Mafia (including
Ukrainians in it) or because of the economic hardships in Ukraine, making
some of residents seek refuge across the ocean? Will the visa situation
change if our economic status improves in several years?

A: This is a very difficult issue, and if there were three problems
with which I could somehow wave a magic wand and make it go away or be
solved, this would be one of them. American visa law is essentially "un-American"
in the sense that it counters one of our basic principles, that you are
presumed innocent until proven guilty. Our visa law turns that around.
Our consular officers are instructed by law to assume that an applicant
for a temporary visa plans to stay in the United States and work illegally
or plans to do things inconsistent with that temporary visa until he or
she convinces them otherwise.

And, unfortunately, our experience is that we do have a significant
number of Ukrainians who travel to the Unites States

on temporary visas and then try to adjust their status and apply to
become residents. A very big factor in the decision by the consular officer
is the economic circumstances of the applicant. But I think that as the
economic circumstances in Ukraine improve four or five years down the road,
that's going to make the decision easier, and then we can decide that there
is not the motivation to go and work illegally in the Unites States that
there was before. So, I think one of the big factors increasing visa issuance
will be the growth of the economy in Ukraine. The legislation will remain,
but it's a different decision when the economics change here.

Q: You said you prefer to regard Ukrainian-US relationships as one
of partnership, but we all understand how very


different our countries are. Things like the freedom of expression
and the press are different here and there. Don't you think that this freedom
is in jeopardy in Ukraine, now that a year separates us from the next presidential
campaign and that the recent eviction of the Kievskie Vedomosti is a graphic
example?

A: No, I think that freedom of the press is a very important
aspect of a stable and fully functioning democracy. And if you ask the
question whether there is freedom of the press in Ukraine, then yes, you
have it. And it's not a question that you can make a yes or no answer to.
Certainly, as we read the press, we can see the full spectrum of viewpoints
represented, and there is considerable criticism of the government, which
I think is also one of the questions you look for in saying how freedom
the press has. By the same token, there have been some actions here ongoing
that, for example, could put a pall over the issue.

Q: Ukraine has its image and reputation. How do you personally regard
this country in light of your experience here in Kyiv?

A: In my job I look at Ukraine through a particular prism which
is how I can work with Ukraine in a way that ultimately advances American
interests. And there are a lot of cases when things that we're doing to
advance American interests, I think, correspond very nicely with Ukrainian
interests, so we're advancing our common interests. I think Americans are
becoming more aware of Ukraine in terms of the role it's playing. It's
a learning process.

 

 

 

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