"Red directors" block reform

by Dmytro Filipchenko

KYYIV - The "red directors" faction within the Ukrainian Cabinet on January 10 apparently blocked proposals for decrees on economic reform that would have broken their hold on the Ukrainian economy. The measures proposed by Deputy Prime Minister and Minister of the Economy Viktor Pynzenyk and the former deputy head of the national bank, Dr. Oleksander Savchenko, were criticized as "too eclectic," "declarative," and "lacking in any real mechanisms for the introduction of market transformations."

The proposed policies were seen, by Western analysts and business leaders such as George Soros, as a welcome departure from the influence of the heads of state enterprises (the "red directors"), and a change in direction for Prime Minister Leonid Kuchma, himself a former head of such a concern. Some observers have come to believe that the measures have now been blocked because they were introduced without Mr. Kuchma's approval.

Fueling speculation in this regard, the Ukrainian prime minister left for Moscow on January 13, for two to three days of talks with the Russian Cabinet, and directed his own executive to suspend sessions until his return.

Informed sources say Mr. Pynzenyk's proposals threatened the interests of the "red directors." As a result, in order to turn the course of privatization back towards a path more beneficial to them, the directors' faction within the government, led by Deputy Prime Minister Volodymyr Demianov [minister of the agro-industrial complex], blocked the measures.

Copyright © The Ukrainian Weekly, January 17, 1993, No. 3, Vol. LXI

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