THE WHITE HOUSE
Office of the Press Secretary
BACKGROUND BRIEFING BY SENIOR ADMINISTRATION OFFICIAL
May 11, 1995
The Ukrainian House Kiev, Ukraine
1:00 P.M. (L)
SENIOR ADMINISTRATION OFFICIAL: I thought it might be useful, I hope it's useful for you if I make myself available to answer any questions you have on why we're here in Ukraine, and why the President is here and what our objectives are. And before I take your questions, let me just give you three reasons why we're here, and three objectives that the President has for this meeting.
First, Ukraine's a very important country for the United States. It's centrally located in the new Europe, it's a country the size of France geographically, with a population of roughly 52 million to 53 million, which is quite large, and by everyone's account, as we look to the next century, strategically important for the United States and for the rest of Europe. And the President is coming to express his interest in building a new and strong relationship with Ukraine.
Second, Ukraine, by all accounts, is the third largest possessor of nuclear weapons in the world, and Ukraine has committed itself to a non-nuclear future under the trilateral agreement negotiated by President Clinton with President Yeltsin and President Kravchuk a year and a half ago. Ukraine has committed itself to giving up its nuclear weapons. The trilateral agreement is well ahead of schedule. Over 350 nuclear warheads have been transported from Ukraine to Russia, and that process will be completed in 1996.
By the end of 1996, there will be no more nuclear weapons in Ukraine; it's quite an achievement for the Ukrainian people and that is something that the President talked with President Kuchma about at the Budapest Summit, when the START I Treaty was signed into force. Ukraine signed that treaty as a non-nuclear weapon state.
Third, the United States has supported Ukraine, President Kuchma in its effort to reform its economy. And in the last year President Kuchma has completely transformed the economic landscape. This was a centrally planned economy for a long time. Among the successor states of the former Soviet Union, it was the one country that held on to command economics for a long time until last summer when President Kravchuk decided that their future should be based on reformed economics, an open capitalist system.
President Clinton, at Naples last summer, led the G- 7 effort to dangle a $4-billion carrot in front of the Ukrainians, promising that if they did reform their economy, the G-7, the IMF and the World Bank would respond with up to $4 billion in assistance; and I believe more than $3 billion of that has already been pledged.
But since last summer there has been a fundamental economic transformation here towards a reformed economic future. The United States has responded with $700 million in economic assistance, and in Nunn-Lugar assistance for dismantling. That makes Ukraine the fourth largest recipient of American assistance anywhere in the world after Israel, Egypt and Russia.
So, in sum, I would say this is an exceedingly important relationship for the United States. It expresses our determination to build American relations in the region not only with Russia, but with this very large and important country situated outside of Russia.
If you think back over the last two years of the Clinton administration's policy in the region, I think it's fair to say that 1993 was the year in which the President and the Secretary focused on Russia; 1994, by contrast, was the year in which the administration focused on Ukraine.
The President was here on January 12th of '94, very briefly in an airport stop. He signed the trilateral statement in Moscow the next day with the Ukrainian and Russian leaderships. In November of this year, President Kuchma was in the White House for a state visit, the first state visit by a Ukrainian leader to the United States. The Secretary of State has been here on several occasions. Secretary Perry has been here most recently to witness the destruction of Bear bombers and nuclear weapons at an air base not far from here.
So we come here with a great deal of optimism about this relationship. We come here having worked very hard over the last two years to build one of the closest relationships the United States has with any country in Central and Eastern Europe.
And all that's by way of introduction, and I'll be glad to take any questions you have.
Q Are you on the record?
SENIOR ADMINISTRATION OFFICIAL: I'm ON BACKGROUND.
Q What issues will the two Presidents be discussing?
SENIOR ADMINISTRATION OFFICIAL: The two Presidents are going to discuss the following issues: Number one, economic reform. How can the United States and the West support the radical economic reforms that President Kuchma has instituted over the last seven to eight months, and we're doing that in a combination of ways. I refer you to the fact that we are extending $700 million in assistance to Ukraine, $350 million of that is for economic support. It is almost entirely grant funding. It's quite unusual for a Western country to have the majority of its aid in grants.
The United States, I think, is alone in the West in its assistance program to this region in basing almost all of it on grant. So what we're trying to do is support the process of privatization which is going on, the privatization of Ukrainian state firms. There is a U.S.-Ukraine Enterprise Fund that has been established, it was established last summer, and that fund capitalized, I think it's $75 million, supports the creation of small businesses in Ukraine and lends money to existing small businesses.
In addition to that, the United States has played without question the leading role in the West in trying to garner international economic support through the IMF, World Bank and the G-7. Ukraine was just recently granted a standby credit of $1.5 billion by the IMF. So it has received the same type of loan that Russia has also recently received.
That's a quite extraordinary accomplishment if you think about where Ukraine was a year ago today. I was here a year ago this week, and Ukraine had not made the decision to reform economically. It was well behind the Russians and the Balts, the Poles, the Hungarians. But in just the last eight to nine months, as Kuchma has taken office, has formed a new government, brought in a team of young economic reformers who have had a lot of exposure to the West, they've done quite well in moving forward and the international community has responded. I think it's quite significant that they received the IMF standby credit at the same time that Russia did.
So President Clinton has tried to lead within the G- 7 to form a consensus that the West should respond to these economic reforms with substantial assistance. As I say, he did that at the Naples Summit. The United States then called for a G-7 summit especially on Ukraine that was held last October 27th in Winnipeg, in Canada, and that was a conference to promote international assistance to Ukraine. So that's issue number one, economics.
The second issue is what we can do with the Ukrainians to continue the process of dismembering the nuclear arsenal here -- nuclear warheads that number in the thousands here that made Ukraine the third largest possessor of nuclear weapons anywhere in the world.
Our Nunn-Lugar program is the expression of our commitment to help them do that, and we have various programs underway here to help them store fissile material, to help them dismember both bombers and ICBMs, to ship the warheads, transport them in a safe manner by train to Russia where, through a process of reverse engineering, they are completely dismantled.
And as I said, when we signed the trilateral statement in January, 1994, it was our expectation that this would take several years to complete, and I'm pleased to say that we're well ahead of schedule, and that this process should be complete by next year.
If you remember back to '91 and '92 when the Soviet Union broke up and these countries emerged, there was deep concern in the West about the future of this country for two reasons. One, a lot of people in this country wanted to retain a nuclear arsenal and make Ukraine a nuclear power. And, certainly, the United States and our Western Allies did not want to see that happen.
Secondly, Ukraine had been the bread basket of the Soviet Union; it's an enormously rich country in terms of its agricultural and economic potential, but it was an economic basket case, because it was the last of these countries in the western part of the former Soviet Union to adopt economic reform.
And there was a lot of concern in the U.S. government, as well as outside, that Ukraine might not survive its infancy as a nation state because of its failure to reform economically. And we have been very pleased to see that, over the last -- as I said, since last July and August, President Kuchma has completely transformed the economic landscape through his new government and his new policies, and the West is now responding. So those are the two major issues.
Let me just add a third. The Russia-Ukraine relationship is an extremely important relationship for both countries and a very complicated one; fifty-two million people in this country, of whom 12 million are ethnic Russians. Russia was formerly a part of the Russian Empire for 300 years, and has been associated with Russia in one way or another for over 1,000 years. These two countries are linked ethnically, historically, linguistically and for a lot of other reasons economically and politically.
The Ukrainians have tried very hard to assert their sense of independence while retaining close economic and political ties with Russia. It's our opinion that President Kuchma has done that quite skillfully. There are two major outstanding Ukrainian-Russian issues beyond the nuclear weapons: The status of the Black Sea Fleet; this was the fourth largest fleet of the Soviet Union -- how will they apportion the assets of the fleet between the two countries. The second issue is Crimea. Crimea had been historically Russian, was given to the Republic of Ukraine in 1954 by Khrushchev, never expecting that Ukraine would become an independent country.
Crimea is a strategically important part of the former Soviet Union in the Black Sea area, and the Russians and Ukrainians are conducting negotiations on both issues. They have managed to avoid a crisis between their countries on both issues.
President Yeltsin has been supportive of President Kuchma, and vice-versa. They have a fairly good relationship, but the two countries have a lot of impediments in the way of a normal relationship. The United States has been the middleman on the issue of nuclear weapons. President Clinton stepped in, in late 1993 when the two countries could not decide how the process of denuclearization would be carried out, and he was the one who brokered this trilateral agreement that will lead to Ukraine becoming a non-nuclear state by next year. So that's the agenda for President Clinton and President Kuchma today.
Q What's your estimate of how many warheads remain?
SENIOR ADMINISTRATION OFFICIAL: The question is, how many warheads remain in this country. I can't give you an exact figure; I'm sorry. But I can tell you that over 350 have been transported out, and that I think roughly over 1,000 remain. But let me try to get all of you a better number on that when some of our experts who know the subject better than I arrive.
Let me just explain under this trilateral arrangement, it is a triangular process whereby Ukraine sends its nuclear warheads to Russia, they are dismantled in Russia, the nuclear fuel rods that are derived as a part of this process are then shipped back to Ukraine to power Ukrainian nuclear plants.
That process, that third leg is funded by the United States. We pay Russia for the fuel rods to be shipped to Ukraine; that's our economic piece of the relationship.
Q What is it that the United States would like this country to do now that it's not doing? From the description you've given, it sounds as if the President is here to -- (inaudible) -- anything else.
SENIOR ADMINISTRATION OFFICIAL: I do think that one of the prime objectives that the President has today is to express very clearly his support for what has happened here --for denuclearization, for economic reform, support for President Kuchma and his government, and support for the process of reform.
This is a divided country politically, like many others in the region. There are many in the Supreme Rada here, which is the Ukrainian Parliament who do not agree with the policies of economic reform.
There have been very heavy, strong political debates over the last couple of years about what this country should become. And the President is here to say that we support what the current government is doing in taking this government in a westward direction, trying to integrate it to become a member in the future of the OECD and the WTO and the IMF, integrate it westward. And I should also mention, Ukraine was the first country in this region to sign up fully to the Partnership For Peace. And as we think about the issue of NATO expansion in the future, we certainly want to make sure that Ukraine's interests are considered in that, and that the geostrategic position of Ukraine, which is quite critical in the process of NATO expansion and European unity is fully considered.
So I think you're right in saying that the primary purpose of this trip is to support a relationship that is working and that is going quite well.
Q Is Ukraine now clearly the leading candidate among the PFP nations for confirmation into NATO?
SENIOR ADMINISTRATION OFFICIAL: I wouldn't go that far. We've made no decisions on which of these countries is going to be -- which of these countries is the leading candidate to become a member of NATO. Ukraine itself has not decided if it's even interested in NATO membership, unlike a lot of its Central European members -- the Visegrad states.
Ukraine has a highly complex relationship, as you can understand, with Russia and has not yet asked or requested consideration for NATO membership. It has said that it wants to be part of the process of bringing NATO closer to these countries through the Partnership For Peace, so Ukraine has already participated in military exercises under the PFP.
Q with Ukraine's enforcement of sanctions on the Balkan States? Are you satisfied that their sanctions enforcement of the Danube --
SENIOR ADMINISTRATION OFFICIAL: The question is, are we satisfied with Ukraine's enforcement of sanctions in the Balkans. Ukraine is part of -- has a contingent of troops that make up part of UNPROFOR. That has been an ongoing concern of ours. There are a number of problems with the sanctions regime in the Balkans, the sanctions regime against the Serbs, and there are a number of offenders. And on a couple of occasions, we've brought issues to the attention of the Ukrainian government pertaining to sanctions enforcement.
Q Is there any hangover here from President Bush's visit when he, as you know, discussed, made the speech that was widely seen as an effort to urge the Ukrainians not to go off independently on their own?
SENIOR ADMINISTRATION OFFICIAL: The question is, is there a hangover from the famous, or infamous "Chicken Kiev speech" of July, 31, 1991.
Q That's not what you called it then.
SENIOR ADMINISTRATION OFFICIAL: (Laughter.) And the answer is, I think that was a long time ago in history. That was even before the attempted coup against Gorbachev. That came at a time when Ukraine was a republic of the Soviet Union. Ukraine's been independent for 3.5 years, and it's been a rocky road as an independent country. And we have had, the United States had, initially, a fairly rocky relationship with Ukraine. Throughout '92 and through most of '93, the United States and Ukraine had a number of differences over the status of the nuclear weapons. But in '93, the President decided to open up the economic relationship and to try to continue to convince the Ukrainians to denuclearize, and that policy was successful.
I think I can say with a certain degree of objectivity that the objectives that the President brought to this relationship in January, 1994 when he first visited here have been met. The economy is reforming with the assistance of the United States, and they have decided to become a non-nuclear country, which was our primary concern.
And so I think he arrives here today, I think with a certain sense of accomplishment about the way this relationship has been conducted and managed by the United States and Ukraine, and we think that our national security interests, which were to see a reduction in the number of nuclear powers in this region are being accomplished.
Kazakhstan gave up the last of its nuclear missiles two weeks ago. Belarus will give up the last of its nuclear missiles shortly in the next couple of months and Ukraine next year. That, I think, was one of the primary foreign policy objectives anywhere in the world in the Clinton administration back in 1993, and we are well on the way to accomplishing that objective.
Q So the answer is no?
SENIOR ADMINISTRATION OFFICIAL: The answer is no. Yes, thank you.
Q To what extent does the economic support here and the other efforts that we're making here serve as a model for what the United States may be able to do for Russia if they continue to proceed on their path?
SENIOR ADMINISTRATION OFFICIAL: I would say there is not really a great distinction in my own mind about how Ukraine has fared economically and how Russia has. For a long time, until about a year ago, even eight, nine months ago, Ukraine was the lagger in terms of economic reform, and Russia was the role model.
And when President Kuchma took office, I think he had a very sensible view: we need to reform economically, but we need to maintain close economic relations with Russia because of the historic trading patterns and the dependency that both --that they have on each other, and also because Russia has set a very good reformist course.
Russia, by and large, is the economic reform role model for almost all the states in the western part of the former Soviet Union -- Ukraine, Belarus, Moldova, to name the three that are closest to Russia, and the United States has absolutely nothing against a close Russia-Ukraine economic relationship; in fact, we encourage it. As long as Russia remains reformist, there's certainly no reason why we should discourage close economic ties between Russia and Ukraine.
Q Can you talk a little bit about Chernobyl? The Ukrainians have been looking for large sums of money from the West -- America to help them close Chernobyl by the year 2002.
SENIOR ADMINISTRATION OFFICIAL: That's right Chernobyl remains the West's outstanding issue with Ukraine. This is not so much a bilateral issue as it is a G-7 issue with Ukraine. You all know about the lingering after-effects, environmental after-effects of Chernobyl in Ukraine and Belarus; they're quite significant in health terms.
Chernobyl, itself, the reactor complex which comprises four reactors, is a highly unstable environment, and there's a lot of concern in the West and in Ukraine about the structure, the ability of the structure to even hold up over the next couple of years.
So the G-7, a year and a half ago, started a discussion with Ukraine on how we could work with Ukraine to shut down Chernobyl completely. Just a couple of weeks ago President Kuchma publicly committed himself to shutting down Chernobyl by the end of this decade. He needs financial support to do that, because Chernobyl is important as a source of energy for this region of Ukraine. And the G-7 came up with a financial support package last summer at Naples which the Ukrainians deemed inadequate. So there is a continuing discussion about this. We have contributed, I think, $38 million, the United States, to this multilateral effort to try to fund a close-down of Chernobyl and the development of alternative energy sources for Ukraine.
Q come up now with some more money?
SENIOR ADMINISTRATION OFFICIAL: I think it's fair to say this discussion is going to continue at Halifax before, during and after Halifax. It's one of the more important issues that's going to be raised at the Halifax Summit, and I don't think it's possible for Ukraine to take this step without substantial Western support in the form of grants and credits and loans, and that remains to be negotiated. But we are hopeful that, with this latest public statement from Kuchma, the Ukrainians now also share our sense of concern about the future environmental dangers of keeping at least two of the units at Chernobyl active, which is presently the case.
Q Would you describe the Kuchma-Clinton relationship? How well do they know each other?
SENIOR ADMINISTRATION OFFICIAL: President Clinton has met President Kuchma once, and that was last November during the state visit to Washington, November 22nd and 23rd. When President Kuchma was candidate Kuchma for President he came to Washington in April, 1994 and met with Al Gore, met with Strobe Talbott and a number of others in the administration. So we know him quite well.
Vice President Gore visited here last August to show support for Kuchma three weeks after Kuchma took office, and Gore was the first Western leader to visit Ukraine, and that was intended to be a very strong signal of American support for Kuchma's agenda, which was non-nuclear and pro-economic reform. So they developed, the two Presidents, a good relationship, the President's been looking forward to coming here.
Q About Chernobyl, is it figuring in the talks today, and are they going to shut down completely, or just the two reactors?
SENIOR ADMINISTRATION OFFICIAL: Chernobyl will figure in the talks today. It's an agenda item, and the intention is to shut down all four of the rectors at the Chernobyl complex, not just the two of them; all four of them -- to shut it down completely because of its inherent instability.
Q You said they'll talk about Ukraine's --problem and whether we're upset about it.
SENIOR ADMINISTRATION OFFICIAL: Ukraine, like Russia, has expressed a concern about the CFE Treaty limits on the disposition of its conventional forces with -- inside its own country. And as we have with Russia, we have encouraged Ukraine to seek flexibility, to seek a resolution of its problems within the confines, the parameters of the CFE Treaty. And I would just take the opportunity to say that I'd just like to reaffirm that's our policy with Russia as well.
I know there is some confusion about that stemming from the press conference with Yeltsin yesterday. Our policy on CFE hasn't changed. We still believe that both Russia and Ukraine should seek adjustments within the parameters of the treaty. We do not favor either country seeking adjustments outside the treaty. What I mean by that is by breaking the treaty open and then attempting to renegotiate it.
Q Aren't the changes temporary? They cannot be permanent on the base of the treaty?
SENIOR ADMINISTRATION OFFICIAL: The CFE changes? Well, both countries -- and there are also a number of other countries in this group -- want to adjust to what they feel are adjusting security concerns, changing security concerns. And we have sympathy with both Russia and Ukraine for their problems, but we do not believe the answer is to go outside the treaty. So that will be the gist of what we say to the Ukrainians today.
END1:30 P.M. (L)