[Ohio UZO News] Ukraine: WP; FT; OSCE

[Deychak, Orest]

The Washington Post

http://www.washingtonpost.com

A Section

Ukraine's IMF Loan Endangered by Feud 

Philip P. Pan 

Washington Post Foreign Service

28 October 2008

FINAL

A12

Ukraine's feuding president and prime minister welcomed a proposed
emergency bailout by the International Monetary Fund on Monday, but a
fresh round of finger-pointing by their aides left it unclear whether
the two could agree on legislation needed to win the $16.5 billion loan.

As Ukraine's currency fell to a historic low and its critical steel
industry urged global action to stop a devastating slide in prices,
Prime Minister Yulia Tymoshenko scheduled a vote on the legislation for
Tuesday and called on the nation's fractured political leadership to
unite in the face of "global financial Armageddon."

Her former ally, President Viktor Yushchenko, also endorsed quick action
on a legislative package that officials say includes unpopular spending
cuts and other measures intended to strengthen Ukraine's wobbly banking
sector.

But the outcome of the vote was uncertain Monday night, as each camp
accused the other of trying to use the economic crisis to get its way in
an extended political standoff over whether the country should hold
early parliamentary elections.

Yushchenko and Tymoshenko were allies in the 2004 street protests known
as the Orange Revolution, which brought Yushchenko to the presidency. He
dissolved parliament this month after the collapse of his coalition with
Tymoshenko and has called for elections in December that could oust her
as prime minister. Tymoshenko opposes the elections and has blocked
legislation needed to finance them.

In a statement Monday, Andriy Goncharuk, deputy chief of the president's
secretariat, accused Tymoshenko of trying to use the economic crisis to
"pursue an alternative foreign policy" and the IMF legislation to thwart
the elections.

"Unfortunately, the position of the prime minister's office reduces the
chances for the country to receive" the IMF loan, he said, adding that
"mass unemployment" could result. He argued that elections were
necessary to resolve the political stalemate in Kiev, which has
increased investors' anxiety over the economy.

But Hryhoriy Nemyria, deputy prime minister for European integration,
said it was Yushchenko who was putting the IMF bailout in jeopardy,
accusing the president's allies of demanding a vote on funding for
elections before they will consider the financial package.

"We cannot accept that," he said by telephone from Kiev. "It's a matter
of priorities, and what can be a higher priority than dealing with the
economic crisis?"

Nemyria added that it would be irresponsible for the government to spend
$80 million on early elections during the crisis, especially given that
Ukraine has had parliamentary elections in each of the past two years
and that a presidential vote is scheduled for next year.

Elections would also make it more difficult for the government to
implement the painful reforms requested by the IMF and needed to rescue
the Ukrainian economy, he said. "There would be pressure on lawmakers to
be populist, and they would criticize the government for agreeing with
the IMF on policies that are very difficult and sensitive."

The largest party in the legislature, the opposition Party of Regions,
has already come out against the IMF proposal, arguing that it is
unnecessary and could further damage the economy. Its position makes it
unlikely that the legislation would pass without some kind of truce
between Yushchenko and Tymoshenko.

Ukraine's currency, the hryvna, has plunged more than 20 percent against
the dollar, amid a run on banks that has drained more than $1 billion
from deposits and a collapse in the price of steel, the nation's main
export.

About 500,000 people are employed in Ukraine's steel industry, and
layoffs of tens of thousands have already been announced. The government
said Monday it was appealing to world metal producers to cut production
and bolster prices.

Many analysts say the economy is fundamentally sound. But most of
Ukraine's leaders agree that it makes sense to adopt the IMF legislation
and get access to the loan in case it is needed, said Igor Borakovsky,
director of the independent Institute for Economic Research and Policy
Consulting. "The situation is not a full-fledged crisis, but everyone
understands that externally and internally, the situation could
radically worsen."

"In principle, the politicians are more or less very close in terms of
the economics," he added. "But when it comes to the politics of the
decision, it becomes very difficult. There is a very specific
competition among them to take credit for the rescue, to be seen as the
savior of the country, and right now, this competition is extremely
detrimental."

http://www.washingtonpost.com <javascript:void(0)> 

Financial Times

www.ft.com

Ukraine bankers cautious on IMF relief

By Roman Olearchyk in Kiev 

Published: October 28 2008 

Bankers were cautiously optimistic on Monday that the $16.5bn loan deal
with the International Monetary Fund at the weekend would help deal with
Kiev's sliding currency and shaky banking system. 

Ukraine's parliament is due to convene on Tuesday after failing last
week to adopt the legislation required for receiving the emergency IMF
loan. 

The IMF has made final approval of the loan dependent on legislation
that would help stabilize Kiev's banks amid liquidity and confidence
problems. But bankers expressed nervousness that rivalling lawmakers
were pre-occupied with the prospects of early elections and unable to
reach consensus on the crucial legislation.

Peter Baron, CEO of VAB Group, a Ukraine-based bank, said "there is no
question the big IMF loan will have a positive effect."

But, Mr Baron said the business community was taking a "wait and see"
approach in what are still "unpredictable times."

Kiev's central bank this month spent more than $3bn in reserves, now at
$34bn, to defend its currency, which has slid from a rate of 5 to 6
relative to the US dollar.

Bankers also worry how a looming world recession could hit Ukraine's
export-oriented economy. It has grown impressively in recent years but
remains vulnerable to world demand for steel and commodities.

Reports in recent days suggested with demand waning, production was
grinding to a halt at several steel mills. The sector is Kiev's main
source of foreign currency and employs hundreds of thousands of people.
Some factories warned layoffs could follow.

Bankers worry political feuds could complicate the country's ability to
respond.

The main sticking point is early elections. Viktor Yushchenko,
president, seeks to hold snap parliamentary elections. Eager to remain
premier, Yulia Tymoshenko opposes a snap poll.


Kiev's small and illiquid stock market fell nearly 4 per cent on Monday
continuing its plummet to levels not seen since 2004. Hapoalim, an
Israeli bank, also said it had backed out of its Ukraine expansion plans
citing the global financial crisis. 


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Press release


OSCE Project Co-ordinator in Ukraine holds meeting to support fight
against human trafficking


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KYIV, 24 October 2008 - Promoting co-operation between Ukrainian
authorities and Kyiv-based embassies and consulates to fight human
trafficking was the purpose of a meeting organized in Kyiv today by the
OSCE Project Coordinator in Ukraine.

Consular officials and diplomats from 20 OSCE participating States and
Partners for Co-operation and Ukrainian Government representatives
discussed co-ordination of anti-trafficking efforts, including support
abroad for Ukrainians who could potentially be trafficking victims and
prosecution of traffickers. Participants also developed a mechanism for
closer co-operation between consular services and Ukrainian authorities
in the fight against human trafficking.

Lubomir Kopaj, the OSCE Project Co-ordinator, said the meeting was
organized as part of the office's work to help Ukraine implement the
OSCE Action Plan to Combat Trafficking in Human Beings, which says
immigration authorities and consular and diplomatic personnel should be
informed about trafficking risks so that they can use this knowledge in
their daily contacts with potential victims.

"By working together with Ukrainian authorities and foreign embassies
here in Ukraine, we are helping consular sections reduce the risk for
trafficking and exploitation, something that has become part of life for
many Ukrainian women, men and children," he said.

The meeting was organized by the OSCE Project Co-ordinator in
co-operation with the Ukrainian Foreign Ministry and the Canadian
Embassy in Ukraine. This was the sixth such event organized with the
support of Canadian Embassy.

 

 

 

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