[Congressional Record Volume 144, Number 46 (Thursday, April 23, 1998)]
[Extensions of Remarks]
[Pages E641-E642]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                UKRAINE

                                 ______
                                 

                           HON. BOB SCHAFFER

                              of colorado

                    in the house of representatives

                        Thursday, April 23, 1998

  Mr. BOB SCHAFFER of Colorado. Mr. Speaker, in August 1991, the people 
of Ukraine courageously and proudly proclaimed independence from the 
Soviet Union, and immediately faced the dual challenges of 
restructuring both a centralized economy and authoritarian political 
system. Unlike the often erratic progression of other post-Soviet 
nations, Ukraine has moved cautiously and steadily toward a free-market 
economy and multi-party democracy. Just last month, Ukraine 
successfully held its first national Parliamentary elections under a 
new democratic Constitution and recently passed federal election law. 
Nearly seventy percent of the citizenry turned out to cast a ballot in 
this monumental election.
  Any transition of this magnitude, however, will naturally encounter 
both progress, as well as setbacks. Ukraine, as Europe's second-largest 
nation with 51 million citizens, has faced particular challenges in 
transforming a misguided and convoluted Soviet economic system into a 
transparent and viable economy, open and appealing to eager foreign 
investors. Many American investors have faced significant obstacles and 
complications attempting to operate in this difficult environment.
  The fiscal year 1998 Foreign Operations Appropriations bill, signed 
into law by President Clinton last year, requires U.S. Secretary of 
State Madeline Albright to ``certify no later than April 30, 1998 that 
the government of Ukraine has made significant progress toward 
resolving complaints by U.S. investors.'' Without such certification, 
the U.S. shall, under law, withhold fifty percent of the fiscal year 
1998 foreign assistance funding to Ukraine, not including funds used 
for nuclear safety purposes. Given our country's vital long-term 
strategic interest in Ukraine, however, it is my hope that investor 
complaints have been sufficiently resolved to warrant Secretary 
Albright's certification on April 30.
  American and Ukrainian officials alike have stated that the 
development and improvement of Ukraine's business climate is crucial 
for Ukraine's continued path toward a true, market-oriented economy. 
While America should commend the reform efforts attained by Ukraine in 
1997, which have resulted in the lowest rate of inflation since 
independence, the stabilization of Ukraine's monetary unit, and the 
continued privatization of state-owned enterprises, it is equally 
important for Ukraine to achieve deregulation in product licensing and 
to pursue further restructuring of its energy and agricultural sectors. 
It is my hope that Ukraine can achieve these additional, much-needed 
reforms through the assistance of continued U.S. engagement.
  Acknowledging America's role in Ukraine's continued economic 
development, former ambassador to Ukraine William Green Miller recently 
stated, ``the United States has the capacity to continue the levels of 
support it has given in the past, and in fact, should look to increase 
those levels in order to ensure a successful outcome.'' The Ukrainian 
government has indicated that without increased foreign investment, 
many structural reforms already in place would be difficult to 
maintain. For this reason, the Ukrainian government recently formed the 
Special Task Force on Corporate Governance and Shareholder Rights. The 
purpose of this task force is to enhance the investment climate in 
Ukraine and improve its competitiveness in the international 
marketplace.
  The existence of informal and unofficial economies remains a frequent 
complaint

[[Page E642]]

among businesses attempting to operate in Ukraine. Such malfeasance can 
most properly be attributed to Ukraine's years under Soviet rule, where 
such practice was commonplace, and does not reflect the overall will or 
potential of the nation. Rather than turning our backs on a promising 
democracy because it retains unfortunate remnants of a failed, 
oppressive political doctrine, it is my belief that we should instead 
continue to engage this aspiring, recovering independent nation and 
encourage the constructive reform Ukraine has already initiated.
  Rebuking Ukraine for its greatest challenges, rather than assisting 
her with them, is counterproductive and could send the signal to other 
nations that America has lost confidence in Ukraine's ability to 
further reform its system. Such an outcome could defeat years of 
progress in this important democracy, and weaken the beneficial 
relationship between our two nations. It is essential that the United 
States continues to work toward ensuring an economically viable Ukraine 
which is critical to continued peace and stability in the region.

                          ____________________