Washington, D.C., April 9, 2003 (UMRG)

Washington, D.C., April 9, 2003 (UMRG).......The Ukraine-U.S. Business Council yesterday sent an important letter to Ukraine's Ambassador to the United States expressing their sincere concern over possible actions by the government of Ukraine to re-intervene in the grain market according to a report from the Ukraine Market Reform Group (UMRG).

Kempton Jenkins, president of the Council stated, "..You and your government should be aware that reintroducing centralized control of the grain market would have a severe chilling effect on all foreign investors in Ukraine," in his letter to Ambassador Gryshcnenko.

"We hope this effort to turn back the clock to Soviet-style management of Ukraine's critical sector will soon disappear to allow Ukraine's dramatic march to productivity and prosperity to resume," President Jenkins also wrote in his letter to Ukraine's Ambassador to the United States.

The complete letter from the Ukraine-U.S. Business Council follows:

April 8, 2003

His Excellency Kostyantyn Gryshchenko
Embassy of Ukraine
3350 M Street, N.W.
Washington, D.C. 20007

Dear Mr. Ambassador:

For the past three years, we have been heartened by the re-birth of the historically powerful Ukrainian agricultural market, known universally as the breadbasket of Europe.

After decades of Soviet mismanagement and brutally enforced collectivization under Stalin, the transition to a market economy in agriculture in Ukraine was slow to evolve after Ukraine gained its independence. But when President Kuchma and the Verkhovna Rada combined to re-establish private ownership of farmland, Ukraine's farmers responded with dramatic results - record harvests for the next two years. As a result, foreign direct investment in the sector also grew rapidly. A critical factor in this agricultural revolution was the privatization of the sector and withdrawal of the Government from the delicate but productive grain market process.

All of a sudden, over the past month we have seen a series of actions by the Ukrainian Administration which indicate a decision to re-intervene in the grain market. The Government's Prosecutor General has jailed the former Deputy Prime Minister Leonid Kozachenko for alleged bribery and tax evasion. And the same lady has announced some 300 legal actions against grain market participants, while calling for the reintroduction of Government control over grain markets.

We obviously are not in a position to judge the legal claims involved, but you and your government should be aware that reintroducing centralized control of the grain market would have a severe chilling effect on all foreign investors in Ukraine.

We are encouraged by statements of several top officials in Ukraine in support of Kozachenko and the market reforms which President Kuchma introduced. We hope that this effort to turn back the clock to Soviet-style management of Ukraine's critical sector will soon disappear and allow Ukraine's dramatic march to productivity and prosperity to resume.

We look forward to meeting with you to discuss this matter.

Very truly yours,

Kempton B. Jenkins, President
Ukraine-US Business Council
1615 L. Street, N.W., Suite 900
Washington, D.C. 20036
Tel: 202 955 4504, Fax 202 955 4506
ukrusbc@earthlink.net