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 hanks
to the government's efforts, the first humble shoots pepped up in the economy
last spring. Some optimists suppose that the bottom point of Ukraine's transformational
slump has been passed and our positions in international markets will start to
strengthen step by step. Definitely there are internal and external positive factors
to be found. These are as follows.
o start with, Ukraine has
accumulated certain positive experience in regulating foreign economic activities.
Ukrainian enterprises are gradually refining the tactics they use to win good
contracts. For instance, enterprises of Ukraine's oil and gas complex jointly
with their Turkish partners are the winners in a tender to lay two branches of
a gas pipeline across Turkey, the project cost totalling 190m dollars. Exporters'
councils and associations have been set up to coordinate the country's export
policy. Foreign trade is getting increasingly into the focus of attention for
government officials. Instead of declaring just another strategic partnership,
the Cabinet of Ministers has at long last protected domestic producers by approving
a "procedure for conducting investigation aimed at finding facts of discrimination
and/or unfriendly actions by other states" A decision has been passed to establish
a mechanism for export and credit risk insurance.
 ositive moves have also
been made in the regulation of foreign economic activity. The Supreme Council
[Ukrainian parliament] has adopted an antidumping code complying with Ukraine's
international commitments and envisaging more effective mechanisms to protect
Ukrainian exporters. Ukrainian legislation is being gradually harmonized with
international law. The regulation of foreign economic activity is getting notably
liberalized in individual areas. The list of items to be exported without strict
state control has been considerably shortened. It should be recalled that, in
1993, legislation restricting free foreign trade was applicable to nearly 70 per
cent of commodity exports from Ukraine. Ukraine is gradually lowering tariffs:
the weighted-average tariff for industrial products has been reduced to 5.48 per
cent. Railway and seaport tariffs for the shipping and handling of many cargo
items are down 20 or 30 per cent. Now they are, according to expert estimates,
1.7 times lower than in Russia or Belarus. Customs procedures are being simplified
on the borders: some 100 crossing points using such procedures are in operation
on the border with Romania, Poland, Slovakia, Hungary and Moldova. This is to
lower the carriers' costs and enhance Ukraine's competitiveness as an exporter
of transport services. In this context, some positive external factors should
also be mentioned. Being outside the WTO influence zone, Ukraine nevertheless
has good prospects for entering individual markets, even those with an increased
level of protectionism. Thus, for instance, Ukrainian textile producers were granted
the opportunity to increase by 30-50 per cent, depending on category, their deliveries
to EU countries. This opportunity alone may give Ukrainian exports an increase
worth 140-145m dollars. The EU is gradually coming to understand the need for
a new long-term agreement, probably starting from 2001, about trade in textile
products and clothing, not unlikely, on a quota-free basis. One of the favourable
external factors to be pointed out is that demand has been growing of late for
foodstuffs in CIS countries, such as Russia, Azerbaijan, Belarus and Kazakhstan,
and that prices have been rising on the international metal markets. Despite internal
economic problems, Ukraine definitely has internal potential to create a competitive
economy and improve its standing on international markets.
 irst, in terms of the level
of mineral and raw-material resources and extraction, Ukraine is to be ranked
among the leading states on the continent. There are over 200 minerals and about
20,000 deposits and fields discovered in Ukraine. Having only 0.4 per cent of
world land and 0.8 per cent of world population, Ukraine produces up to 5 per
cent of mineral raw materials and processed products. In terms of money, Ukraine's
mineral raw materials are estimated at 15bn dollars.
Second, Ukraine has 25 per cent of the world's most fertile black-earth soils
and favourable climatic conditions. Completion of property reform and retooling
of the agroindustrial complex can substantially strengthen our standing on the
markets of farm produce. By the way, our large modernized enterprises in the food
industry are already offering products that meet international quality standards.
Third, there are good prospects for developing the export of services. We are
the world leader in the transit of natural gas and our gas carrying system features
high traffic capacity - 290bn cu.m. at the input and nearly 170bn cu. m. at the
output annually. According to EU experts, annual cargo traffic along the Eurasian
traffic corridor across Ukraine will increase to 20m tons.
Fourth, Ukraine has significant potential in hi-tech industries. It holds a prominent
position among the world leaders in space research (the USA, Russia, France, China);
it takes part in a number of large-scale of international projects, such as Sea
Launch; a project to create an international space station; Ukrainian-Russian
project to modernize the SS-18 intercontinental ballistic missile; Ukrainian-Brazilian-Italian
project to launch modernized Tsiklon-4 booster rockets. Ukraine is one of the
world's 10 states that manufacture military transport aircraft and one of the
leading exporters of arms and military technical services.
 owever, experts from the
Ukrainian Centre for Economic and Political Research say that the above-mentioned
positive factors cannot, in their own right, ensure a build-up in exports, let
alone quality change in the foreign trade pattern. Key prerequisites for success
are in developing and implementing a state strategy to boost the development of
hi-tech production facilities and conducting in-depth internal reform in Ukraine.
Source: 'Zerkalo Nedeli', Kiev, in Russian
24 Jun 00 p1,8 /BBC Monitoring/ © BBC.
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