By Steven PIFER,
U.S. Ambassador to Ukraine
The United States Government has been a generous contributor to Ukrainian
government and private sector institutions active in creating a market
economy and democratic institutions. Since 1992, this aid has amounted
to $1.25 billion under provisions of the Freedom Support Act. Other assistance
accounts, such as the Cooperative Threat Reduction program to eliminate
the nuclear weapons infrastructure, provide hundreds of millions of additional
dollars in aid to Ukraine.
This year, however, Congress mandated that, by February 18, 1999, Secretary
of State Madeleine Albright report to the U.S. Congress on Ukraine's efforts
in the area of economic reform, in addition to those made in previous fiscal
years, including effective enforcement of reformed commercial and tax codes
and continued progress on resolution of complaints by U.S. investors.
The 1999 Appropriations Act provided $195 million in technical assistance
for Ukraine, but specified that 50 percent of those funds, except for nuclear
safety and law enforcement reform, be withheld pending receipt of the Secretary's
affirmative findings on the above conditions.
Technical assistance includes advisers and assistance in such areas
as private sector business development, economic restructuring, democratization,
and professional training. The full amount will be disbursed only if the
Secretary reports, in a process called "certification," that progress has
indeed been made on economic reform and on resolving business disputes.
If the Secretary is unable to certify, we expect that $70-80 million in
funding would be lost to Ukraine.
This certification requirement was not sought by the Clinton Administration,
but was imposed by Congress, reflecting Congressional concerns that we
share that economic reform in Ukraine is proceeding too slowly and that
American investors are unfairly treated. Congress imposed a similar certification
requirement last year. In April 1998, Secretary Albright certified that
progress was being made in resolving U.S. investor disputes. At the time,
the Secretary stated that the United States would continue to monitor progress
in Ukraine on reform and in the investment climate, including treatment
of U.S. investors in Ukraine, with the goal of ensuring that all U.S. assistance
is used effectively to encourage and promote the reforms needed to stimulate
sustainable economic growth.
The Secretary would like to be able to certify this month but must observe
the requirement of the law passed by Congress. This means there must be
positive evidence on which to base the decision; real reforms and real
progress on resolving investor disputes.
The American Embassy, with the support of high-level visitors such as
Ambassador-at-Large Sestanovich and Department of Commerce Counselor Kalicki,
has been working closely with the Ukrainian government to identify areas
for progress. Progress on economic reforms and in solving the investor
dispute cases will not only facilitate a certification decision, but will
also help with the International Monetary Fund and in shaping a more positive
investment climate in Ukraine, one that will attract new investment to
create new jobs, generate additional tax revenues and spur economic growth.
The Secretary's decision will be announced this week. In any case, the
technical aid affected by the certification decision is only one part of
a large, multi-faceted relationship partnership, which has developed in
very positive directions over the last five years. The U.S. Binational
(Gore-Kuchma) Commission provides a mechanism for systematic review of
the relationship at the highest levels, to ensure that we are moving in
the right direction. This covers political and security, as well as economic
issues.
The United States and Ukraine share a wide range of important interests.
Regardless of whether or not the Secretary is able to certify, the United
States intends to continue developing a robust and broad relationship with
Ukraine, one that helps Ukraine's transformation into a democratic market
economy that is fully a part of Europe.







