Ukraine's Parliament plods along in dealing with economic problems (12/26/93)

Ukraine's Parliament plods along in dealing with economic problems

by Roman Woronowycz
Kyyiv Press Bureau

KYYIV - Ukraine's Parliament, like its economy, continues to struggle along. In the last week before recess, it succeeded in passing a rather vague act on demonopolization of the economy and fumbled with an economic reform package that seems more designed to lift any reform burdens from the deputies' shoulders than to effect specific economic change.

The act on demonopolization, which calls for a two-stage move to break up large industrial sectors owned by the government and their eventual privatization, passed the Parliament on Tuesday by a vote of 246 to 2.

However, besides anointing the formation of a committee and appointing a chairman, little could be gleaned from the document that would suggest demonopolization and large-scale privatization were imminent.

Oleksander Zavada, who was named chairman of the just-created Committee on Demonopolization and Promotion of Competition, said he realizes that the directives are vague and termed the act one of ideology. But he added, "Before no centralized effort toward demonopolization existed in government. We worked on legislation piecemeal and in a fragmented manner. Now we have a formal, centralized structure and a united, concrete plan to go out to work."

The act, which was proposed by the Cabinet of Ministers, calls for breaking up large government-run factories and collectives only after inflation has been reeled in and the economy stabilized. This would be accomplished by decentralizing management, lifting existing free market restrictions, which would allow equal access to all market areas, and providing a stimulus for competitors to enter the marketplace, according to the legislation. However, the document does not state how these goals are to be accomplished.

It also explains that private monopolies will be deterred by government control of prices and tariffs, and limits on profits.

Former Deputy Prime Minister and Minister of the Economy Viktor Pynzenyk, who retains his seat in the Parliament, dismissed the new act. "Right now, none of this is important. I didn't even bother to show for the debate. Until financial reform is implemented, these acts mean nothing."

However, Deputy Mykhailo Horyn, leader of the Ukrainian Republican Party, disagreed. He explained that he voted for the demonopolization act because it was essential before further movement towards a free-market economy takes place.

"In the move to privatization, a policy of demonopolization is essential. Without it we will only strengthen existing monopolies and allow them to set market prices," he said.

Fumbling with economic reform

The economic reform proposal, which initially was passed on December 17, is heavily sprinkled with verbiage regarding anti-inflation measures. Essentially, it requires the executive to reduce government spending; bans all branches of government from actions that would require the release of additional money by the National Bank of Ukraine and introduces a system for handling bankruptcies by non-profitable enterprises.

However, the document also gives the Cabinet of Ministers "the exclusive responsibility for implementation of this program."

On December 20, the Cabinet of Ministers returned with details for the new package, which included 32 points to be added to the original document.

By Tuesday, the Parliament, which had to form a special committee to consolidate the various proposals with the legislation that was passed Friday, was again in disarray and offering new economic proposals.

Andriy Pecherov, a deputy from Odessa and a member of the reconciliation committee, said the legislation was being detailed to death. "If we get too specific, we will not agree on anything," he said.

In the end, yet another proposal was presented that forced the reconciliation committee back to work to redo the whole thing once more.

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