Kuchma outlines recovery plan (01/31/93)

Kuchma outlines recovery plan

Below are excerpts from a report delivered by Prime Minister Leonid Kuchma on Wednesday, January 20, during the joint sitting of parliamentary standing committees and the government. The prime minister outlined his suggestions for a way out of the current economic crisis. The following excerpts are from a report provided by Kyyiv-based IntelNews.

Priority will be given to solving the fuel-energy problem. We will introduce energy-saving technology into the industrial sector, including villages throughout the country, where its introduction will mark a critical aspect of our program.
Priority will be given to initiatives for producing goods worthy of export.
We will not allow our villagers to perish. We will give them fuel, mineral resources; everything they have been promised. Unfortunately, as a result of populist decisions, we provided collective farms with so much sugar that we do not have enough left over to pay for needed fuel supplies.
Another priority will be the free access of all goods producers to all resources and products.
The government is planning to introduce strict control over prices established by natural and artificial monopolies and also plans to demonopolize the economy.
We must avoid an increase in prices and consumption funds. Most importantly, we must curb the plummeting level of production to avoid a complete financial crash. This year's budget predicts an inflow of 5 trillion karbovantsi and an outflow of 8 trillion.
The government intends to stop speculative price increases. We have closed small enterprises associated with state industries, a move that did not please those involved in this sector. We are aware of the fact there are five middlemen between each producer and consumer. By the time products reach consumers, prices have already increased four or five times. The government is preparing decrees that will introduce a new regime for taxing the middlemen's operations. Beginning with the second middleman, the tax will equal the entire difference in price.
To implement anti-inflationary policies and a strict stabilization system, we must place the "incompetent" National Bank under direct government control. The government is prepared to strictly limit monetary emissions; ruthlessly review the account interest rates of the National Bank; normalize its cooperation and transactions with commercial banks; freeze wages in state enterprises, allowing them to increase only in proportion to a rise in productivity, while simultaneously controlling the prices of monopolistic enterprises. The Law on Bankruptcy will be fully implemented.
The only thing that can seriously threaten Ukraine at this time is a large-scale political conflict that would invariably reach the regional level. Fulfilling our plan of action to stabilize the economy is possible only if we maintain political stability and peace among all of our national groups. Political forces that are taking advantage of the instability of socialism and are purposely agitating people to achieve their own goals, are attacking the Ukrainian state as a whole, rather than individual people.

Instead we should be discussing why an attempt is being made to change the state system, reorient our nation into something enigmatic, and why there are people who consciously intend to fan the fires of civil war. I am confident that any attempt to return to a centrally controlled socialist economy is not only without a future, but may lead to the most severe consequences and a sociopolitical cataclysm.

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