KIEV, Jan. 20 – Ukraine’s economic growth will accelerate through an expected increase in exports and investment after the country joins the World Trade Organization next month, President Viktor Yushchenko said Sunday.
Analysts expected Ukraine’s growth to slow down to 6.8% in 2008, down from 7.3% in 2007, but the joining of the WTO may help to accelerate the expansion, Yushchenko said.
“Joining the same legal field with other businesses on all continents gives an advantage of 1.5 to 1.8 percentage points in extra GDP growth,” Yushchenko said in an interview with Inter television Sunday. “We’re talking about billions of dollars in benefits for the Ukrainian economy in different sectors.”
Ukraine’s economy is estimated at more than $176 billion in 2008, and an extra growth of 1.8% may be an equivalent of $3.2 billion in additional economic growth.
Joining the WTO is Yushchenko’s key economic policy and trade initiative, and is expected to boost Ukraine’s exports to the rest of the world.
The accession would also help Ukraine to start negotiations with the European Union over creating a free trade zone, a move that is expected to increase mutual trade between the two.
“The most important is that we are to begin talks with the EU over creating the free trade zone,” Yushchenko said at a security meeting on Friday. “This is a major work that Ukraine must do in the context of European integration.”
Ukraine, which was in talks over the accession for more than a decade, is now expected to join the WTO in early February, perhaps on February 5, according to Hryhoriy Nemyria, the deputy prime minister for European integration.
The accession has become possible following a compromise reached on January 16 between Ukraine and the EU over a sensitive issue of easing duties the country slaps on some of its exports, such as scrap ferrous metal and sunflower seeds.
This follows a major progress that Ukraine has made in November 2007 by approving regulatory issues and settling a 15-year old debt conflict with Kyrgyzstan.
Ukraine was deadlocked for years in talks with Kyrgyzstan over a disputed $27.3 million debt that Bishkek claims has been owned by Ukraine since the break up of the former Soviet Union.
Ukraine has been refusing to accept it as the state debt amid fears this would trigger an avalanche of similar claims by other countries, such as Belarus and Russia.
But the breakthrough in the talks with Bishkek came last week after Ukraine had suggested sending $27.3 million ‘humanitarian aid’ to Kyrgyzstan. (tl/ez)