IN THE COUNTRIES OF THE COMMONWEALTH Development along different though interrelated lines Georgiy Kryzhanovsky, President of the International Transportation Academy          The trend towards gradual economic stability observed throughout the CIS during these last few years has paved the way for cooperation, which is central to continuing successful economic reforms. Nobody doubts that an important line of cooperation is the establishment of a common commodity distribution chain in a common transportation market. A number of recent intergovernmental agreements prove this point.          The concrete activities of intergovernmental commissions, established to solve various cooperation issues in the transportation industry, are practically a prerequisite for the successful development of the national economies. These specific programs and projects are now being implemented within the CIS transportation network. However, practice shows that some shortcomings in the production of transportation services and consumption are factors that obstruct business activity and prevent the inflow of foreign capital so needed for industrial development.         Our insufficient experience in the administration of intergovernmental cooperation is a major impediment. Divergent priorities within the transportation network, different approaches to organizing a common commodity distribution chain, and inadequate attention to the creation of practical mechanisms for the implementation and follow-up of agreements, often show that the intensive activities of intergovernmental authorities towards development and negotiation are inefficient from the viewpoint of active transport service market operators.         As far back as 1994, a transportation conference (made up of ministers of transport) developed a Coordinated Transportation Policy valid up to the year 2000. This created a single-minded process for transportation support of developing national economies during a transitional period. This could be considered an initial stage in the establishment of an intergovernmental regulative and legal system to govern the transportation service market. The document adopted at that time enabled transportation authorities as well as intergovernmental committees to achieve some positive results in solving a number of important problems in the coordination of separate transportation modes. However, the network embracing the Member States of the Economic Union is now failing to meet the needs of our developing economies. These committees underestimate the importance of a systematic approach to solving the economic problems of transition and implementation of further reforms.         Together with the implementation of adopted programs and projects to develop a transportation network and a common transportation service market, it is also necessary to prepare and submit a number of new drafts to the competent authorities. Based on data analysis, it is important to include steps in these drafts for creating transportation cooperation among the Member States of the Economic Union, to clearly formulate the specific problems, to define common policies towards a common commodity distribution network and to establish a common transportation service market.         The CIS Commission on Free Trade and the Department of Transport have developed a Concept for CIS cooperation in order to establish a common transportation space up to the year 2010. It is based on the diverse experience of Independent Member States of the Economic Union, which again proves that a more systematic approach is necessary for solving the existing problems.         The Concept's main purpose is to build objective prerequisites for a transportation network segment to achieve the basic political targets of the Economic Union. A primary target is to formulate and negotiate common approaches by intergovernmental and national authorities for the administration of transportation networks.         The first type of problems the Concept deals with, are the non-conformities in the existing transportation structure and operation, replacing them with the modern economic and political conditions and realities of the post-soviet area.          The second problem is creating new intergovernmental and governmental regulations designed for transportation system development and operation in the post-soviet area. A reason for this is the specific role of transportation in the development of the independent state economies under market conditions. It is impossible to create equal and favorable conditions for the industrial, agricultural and transportation service sectors when there are no effective regulations on transportation.         Finally, the third set of problems is the unequal allocation of sites for equipment manufacturing and repairs throughout the area of the former USSR. For this reason, transportation agencies have been forced to initiate the development and implementation of equipment production and renovation in almost every country. This means it is economically viable to expand transportation cooperation to effectively use each country's transportation infrastructure within the present market.         It is important to identify the basic lines of transportation cooperation and the order of priorities for the development and implementation of individual programs, eliminating the reasons and consequences of central problems. Transportation cooperation can and must develop along different though interrelated lines.         The International Transportation Academy is studying specific steps for ordering and harmonizing national transportation laws, customs, tariff policies, national transportation leasing support programs and developed personnel systems for the network. These problems are being worked on in close contact with intergovernmental agencies and national transportation authorities.

IN THE COUNTRIES OF THE COMMONWEALTH Ukraine - Russia Victor Yuschenko the Prime Minister of Ukraine         - What relations does Ukraine have with St. Petersburg and the regions of Northern Russia in the spheres of industry, science and high technology?         - First of all I would like to say that the development of comprehensive and mutually beneficial relations with Russia is a priority for us. Naturally, close regional economic links were established historically and under the present conditions of forming market structures they require qualitative renovation.         Its considerable scientific, technical, industrial and raw material potential determine the special features of Northwest Russia. That is why Ukrainian enterprises and research organizations are interested in further developing cooperation in this region. First of all, this applies to shipbuilding, to chemical and oil chemical production and to the delivery of Ukrainian agricultural products to places where certain traditions and connections already exist. We would like to intensify the participation of our companies in the development of raw material resources in the region. The cooperation between the Arkhangelsk pulp and paper mill and the Kiev paper-and-cardboard factory is a good example of this.         Our cooperation with the Northwest regions of the Russian Federation seems to be quite promising. For instance, the Murmansk region's government is interested in further increasing the supply of consumer goods from Ukraine, especially food and products of industrial and technical application. The development of our contacts in tourism and recreation is also promising.         We consider our participation in the renovation of the fishing fleet very important in cooperation with Murmansk. In particular, we are talking about using Ukrainian shipyards on the account of our debts from the use of Russian gas. At the end of January this year, this point was examined at a Russian-Ukrainian meeting where we discussed the placing of a package of orders to Ukrainian shipbuilders and possible ways of undertaking the project.         As we continue good old traditions with new additions, we stand for the development of interregional relations based on frame agreements between Ukrainian regional administrations and separate subjects of the Russian Federation. Agreements between the Zaporozhye region, the Dnepropetrovsk region and Karelia are already in effect, and further agreements on cooperation between St. Petersburg and Kiev, as well as between other Russian Northwest and Ukrainian regions are being prepared. It is very important to avoid formal declarations of intention and to cooperate through real projects in accordance with the economic strategy of our countries. We think St. Petersburg is a good example. It created a special committee on cooperation with Ukraine that includes the scientific and cultural spheres.          A number of machine-building and metallurgical enterprises of the Donetsk region maintain a close and constant contact with the Northwest regions of Russia: the open joint-stock company "Kramatorsky heavy engineering plant", "Slavtyazhmash", the "Zuev energo-mechanical plant and the open joint-stock company "Donetsk metallurgical plant" among others. A specific example of cooperation is the work by the Nikolaev scientific-research enterprise "Mashproekt" on the construction of the 1st turbine for the Central Heating Station in the town of Velsk in the Arkhangelsk region. This project was based on new ecologically safe, energy saving technology. This technology had only been previously used on modern submarines.         - What are the character and the volume of trade relations between Ukraine and St. Petersburg and between Ukraine and the regions of Russia's North and Northwest?         - Undoubtedly, we can not be satisfied with the present condition of trade and economic relations with such a large region of Russia as is the Northwest.         Though commercial exchange between Ukraine and this region is worth over 400 mln. Dollars, it is still 15 - 20 percent less than it was before the August financial crisis.         Considering the significance and size of St. Petersburg, part of our mutual deliveries still take place in the form of barter which contradicts our mutual tendencies and goals. The number of joint ventures is decreasing. Only in St. Petersburg they have diminished from 250 to 67 since 1995. In my opinion it is extremely important to maximize efforts. The legislative and executive bodies of our countries should work to remove obstacles in the development of mutually profitable and comprehensive relations.         - Is Ukraine interested in the development of the northern oil and gas shelf?         - The issue of fuel supply diversification is very urgent for Ukraine. We are looking for optimal solutions to solve this problem. A number of Russian companies are actively participating in the privatization of Ukrainian oil processing enterprises. This is why it seems logical that these companies show special interest in the development of oil and gas deposits in the North. We can offer the example of LUKOIL, a widely known company that actively participated in the privatization of the Odessa oil processing plant. The situation with the privatization of the Lisichansk oil processing plant is similar. Tyumen Oil Company is planning its revival and intends to increase processing. Ukrainian oil and gas companies, including machine-building ones, all which have considerable potential are also showing a certain interest in the development of Russia's northern deposits. The government of Ukraine is striving towards the creation of normal, clear and common "rules of the game" for all participants of the energy resource market. This is our main task and our primary support for those who want to work in our country successfully.         - Does your business sector show interest in the exploitation of the Northern Sea Route through trade relations with countries in the Asian and Pacific region? What can this route offer Ukraine?         - First of all I must point out that the Northern Sea Route was developed mainly for the native population of Russia's North and for the development of the adjoining territories. Part of Ukrainian goods, which include food products, reach this region through St. Petersburg, Murmansk and Arkhangelsk. We continue to be interested in increasing the commodity turnover in the North and Northwest. A good opportunity to achieve this goal is the transport corridor "from Varangians to Greeks" which is being actively revived and a considerable part of which goes through the territory of Ukraine. When we reconstruct this corridor we will have more possibilities to intensify economical and trade relations.         - What is the development tendency of economic, industrial and trade relations between Ukraine, St. Petersburg and Russia's North and Northwest?         - I have mentioned some of these tendencies in answering previous questions. However, I am convinced that the agreement on free trade in the CIS would give a more considerable impetus in the near future for the development of all kinds of trade and economic relations with the subjects of Russia's Northwest. It is known that Ukraine consistently holds this idea and that it is persistently looking for ways to overcome existing problems, especially with the unification of tax and customs rules and the liberalization of the movement of goods. At the same time we hope for positive changes in the economies of both Russia and our country, so that the quality and competitiveness of goods and services improves, and for the positive tendencies in relations between Ukrainian and Russian banking and financial systems to strengthen and develop.         All this together will undoubtedly favor the quality of life and the welfare of the citizens of our countries who deserve a better fortune, as we say in Ukraine.