UKRAINE NEEDS WEST INVESTORS, INSTITUTE SAYS

UKRAINE NEEDS WEST INVESTORS, INSTITUTE SAYS

The deep structural depression in Ukraine has pushed the nation to the edge of chaos and catastrophe, and the chances for an economic upturn are uncertain without Western investment, the Vienna Institute for Comparative Economic Studies (WIIW) said.

The nation needs Western support, but investors have been reluctant to spend money in Ukraine until the nation makes a credible attempt to lower inflation and to create a stable legal system to protect investments, the institute said in a report.Since June 1992, the monthly inflation rate has run generally from 15 percent to 100 percent and has been exacerbated by Russian crude oil prices, which have risen from 3 percent of world levels to 80 percent, WIIW said.

Ukraine's gross domestic product by the end of the year is expected to be 35 percent below that of 1989, with 1993 GDP seen dropping 15 percent from 1992.

Corruption and capital flight has left the nation desperately short of hard currency. If the trend of the first eight months of 1993 continues, Ukrainian imports in 1993 from non-former USSR nations will fall to 13 percent of the level seen in 1990, WIIW said.