Kuchma sacks prime minister, replacing him with political ally

by Marta Kolomayets
Kyiv Press Bureau

KYIV - President Leonid Kuchma dismissed Prime Minister Yevhen Marchuk on May 27, immediately replacing him with political ally and Dnipropetrovske crony Pavlo Lazarenko, who had served as Ukraine's first deputy prime minister.

Mr. Marchuk, who was appointed prime minister by President Kuchma in June 1995, "failed to ensure the effective and stable functioning of the government. And recently, instead of routine day-to-day work to guarantee its activities, he has concentrated his energies on building his own political image," read a statement released by the presidential administration's press service on May 28.

The lengthy statement faulted the prime minister for a number of problems in Ukraine's economy, including the lack of structural changes in the state sector, which has led to the current payments crisis, as well as the delay in adoption of emergency measures, inability to cooperate with the Parliament on priority laws and the slow pace of implementing market reforms.

It also pointed to "ineffectiveness of the work of the Cabinet of Ministers," adding that the "government does not forecast economic developments in the country, but trails behind them, often making decisions due to their consequences" - a form of crisis management.

In response, Mr. Marchuk told reporters in Parliament, where he resumed his duties as deputy from the Poltava region on May 28, that he "cannot agree with the motives for his dismissal as outlined in the statement released by the president's press service."

"History and time will put everything in its place," said Mr. Marchuk, surrounded by journalists eager to get a reaction from the ousted government official, who avoided giving reasons for President Kuchma's decision but added that the "roots of the problem run much deeper."

He did say that it was the president's right to dismiss the prime minister (as outlined in the Constitutional Accord signed between the executive and legislative branches last June), but defended himself by saying, "All the blame for the problems in Ukraine's economy cannot be put on the prime minister. This would be the simplest solution."

Former President Leonid Kravchuk, now also a deputy in Parliament, agreed that President Kuchma exercised his right in dismissing the prime minister.

"When there is an economic crisis, and tensions are on the rise, you look for a way out, you look for a change in your cadres, in your government," said Mr. Kravchuk, who had three different prime ministers, including Mr. Kuchma, serve in his three years in office.

But many politicians see Mr. Marchuk as the scapegoat of a hyped-up reform policy gone sour in recent months, while others see him as a future political threat to President Kuchma, a potential contender for the presidency in two years.

"You can't blame all of the country's problems on one person. If the president had fired the entire Cabinet, then I could say that he was serious about reforms, but about 80 percent of the government is of a left-wing orientation," said Les Taniuk, a member of the Rukh faction in Parliament.

He added, "Now comes the critical period: does the president have the political will to move on with economic reforms?"

Vyacheslav Chornovil, the leader of Rukh, was not as kind to Mr. Marchuk, criticizing him for having a "command-administrative" approach to his work, and adding that during his year in power, Mr. Marchuk did little to find common ground with national-democratic forces.

Communist Party leader Petro Symonen-ko, a deputy representing Donetske, agreed that nothing will change in Ukraine if the president's team remains the same and if the presidential administration continues to meddle in the affairs of the government, almost forming a parallel Cabinet of Ministers.

"The president made a political decision, but not one that will help resolve the current economic situation in Ukraine," said Mr. Symonenko, who proceeded to criticize the general course of market-oriented economic reforms.

Kuchma pledges to stay the course

Despite Mr. Symonenko's criticism of his reform policy, President Kuchma made it clear that Ukraine will not stray from its commitments, which are strongly supported by both Western governments and international financial institutions.

And, given the threat of a possible Communist takeover in neighboring Russia, Ukraine's course - its democratic, social and economic transition - is watched closely by leaders concerned about stability in this part of the world.

"The reshuffle among the government leadership is not designed to change economic strategy. We shall proceed with reforms, since this is the only road for us," President Kuchma said on May 29, adding that the government must change its tactics - both in terms of speeding up the pace of reforms and toughening the country's finance and budgetary policies.

That same day, Prime Minister Lazarenko, in his first public act as President Kuchma's right-hand man, released a statement pledging to implement the president's economic policy.

"My fundamental stand consists of firm support for the policy of social and economic reforms and structural change in the economy, pursued by President Leonid Kuchma. This is the only justified way to overcome the crisis in Ukraine and turn it into a modern, civilized nation. For this reason, I deem it a matter of honor to implement the presidential economic policy," read the statement.

It also listed Mr. Lazarenko's priorities, which include speeding up structural transformations, invigorating the privatization process, attracting foreign investment, overcoming the payments crisis and ensuring regularity in the payment of wages and pensions.

"Following the dismissal of Prime Minister Yevhen Marchuk, other changes are possible in the government," said Volodymyr Horbulin, secretary of the National Security Council, on May 29 at a regular weekly press briefing in the presidential administration.

President Kuchma confirmed that a Cabinet reshuffle is sure to happen in the future, but did not specify how soon this would be.

Yulia Mostova, deputy editor of Dzerkalo Nedeli, a Russian-language weekly newspaper that published a lengthy, revealing interview with Mr. Marchuk just one week prior to his dismissal, said one major mistake made by the former prime minister is that he agreed to work with a Cabinet he did not choose. In that interview dated May 18, Mr. Marchuk admitted that, given the opportunity, he would keep only one-third of the players on the government's economic team.

So, observers say, if Mr. Lazarenko is not given the chance to choose his own people, history may repeat itself.

Unlike Mr. Marchuk, however, Mr. Lazarenko is one of Mr. Kuchma's people and it is possible his loyalty to the Ukrainian president may take priority over his own personal ambitions.

Although Mr. Horbulin continued to deny that there were personal problems between President Kuchma and Prime Minister Marchuk, it is clear that the two men were not cut of the same cloth and speculation about an ongoing power struggle was often the topic of conversation in the halls of power.

PM's Dnipropetrovske roots

Although Mr. Horbulin has repeatedly denied the existence of a "Dnipropetrovske mafia" heading up the president's team, the facts speak for themselves. Among President Kuchma's top government officials are Valeriy Pustovoytenko, minister of the Cabinet of Ministers (and former mayor of Dnipropetrovske); Mr. Horbulin, secretary of the National Security Council and Mr. Kuchma's colleague from Pivdenmash, the world's largest missile factory, located in Dnipropetrovske; Mr. Lazarenko, the new prime minister and former chairman of the Dnipropetrovske Oblast Council; and Hryhoriy Vorsinov, Ukraine's procurator general and former Dnipropetrovske Oblast prosecutor.

Mr. Lazarenko, currently a people's deputy representing Dnipropetrovske Oblast, has served in the Ukrainian government since 1995 as first deputy prime minister. Born in 1953, he is an ethnic Ukrainian. An agronomist by profession, he worked his way up from being a driver at a collective farm in the Dnipropetrovske region to head of the agrarian-industrial union of the region and chairman of the oblast council.

Government insiders note that he is a very wealthy citizen who made his money on gas and oil, and most recently was in charge of handling Ukraine's gas and oil debts to Russia.

But many Parliament deputies, from Mr. Symonenko of the Communists to Levko Lukianenko, former Ukrainian political prisoner and currently the honorary chairman of the Ukrainian Republican Party, view Mr. Lazarenko as a disciplinarian and a good organizer, someone who can deal with Ukraine's economic woes.

"He knows how to find solutions to existing problems, he speaks Ukrainian, and he is not against Ukrainian statehood," said Mr. Lukianenko.

"Of course you pick a team that is loyal to you, if you want it to work," said Oleksander Stoyan, a member of the Center faction in Parliament and the chairman of the Federation of Trade Unions. "Can you imagine Dynamo Kyiv being a winner if they did not follow one team strategy?"

"What is clear to me is that the president wants to surround himself with his own people. He is using the criteria of loyalty to pick and choose government officials, instead of using such criteria as capability and competence," said Yuri Buzduhan, leader of the Social Democratic Party and chairman of the Parliament's Committee on Social Policy and Labor.

One of the reasons the president may want to surround himself with people who are loyal to him is the fact that he fears political contenders, such as Mr. Marchuk.

Although he has never publicly revealed that he has ambitions to become the next president of Ukraine, Mr. Marchuk was voted most popular politician of 1995 and his dismissal shocked Ukraine's citizens, who view him as an authoritative, professional leader, a charismatic figure in political circles.

But he has no visible power base, and that may be one reason he may even have positioned himself for dismissal. Some political observers, such as Konstantin Maleyev, director of the Kistiakivsky Socio-Political Research Institute in Kyiv, note that the economic situation in Ukraine is still on the decline, and citizens who have not been paid for months are becoming disgruntled.

"Mr. Marchuk may not want to be remembered for these things," said Mr. Maleyev, "so he had himself removed from office."

He may have planned to resign sometime soon, but Mr. Kuchma beat him to it, which according to Mr. Buzduhan may award Mr. Marchuk the added "sympathy" factor that appeals to most Ukrainian voters.

"Mr. Marchuk becomes the man who wanted to do good, but was ousted," added Mr. Maleyev.

Theories abound

Other political observers note that perhaps President Kuchma considers Mr. Marchuk a threat as a potential candidate for president so he has to eliminate him from his circles of power.

"There can only be one leader in power," said Volodymyr Ryzhkov, a presidential adviser, after Mr. Marchuk's sacking.

Mr. Kuchma may suffer from the "Gorbachev syndrome," feeling the need "to remove anybody who stands in the way of his own rating."

According to political analyst Artur Bilous, the Dzerkalo Nedeli article was the last straw for Mr. Kuchma, because in the interview Mr. Marchuk publicly criticized Mr. Kuchma and accused him of keeping decisions from Mr. Marchuk.

For example, Mr. Marchuk said he found out about several government appointments from radio reports, and he found himself excluded from various Cabinet meetings.

Mr. Marchuk told his interviewer: "I know that in politics there is always some cynicism. But, recently I noticed that there was an overwhelming degree of it: a person consciously says one thing, does another and plans yet a third." He added, "I just wanted to take care of my direct responsibilities."

If indeed all of this is true, Mr. Kuchma may be the one who will suffer in the end. For it was not so long ago that he himself had resigned from the Ukrainian government in order to concentrate on his duties as a member of Parliament. He then took the opportunity to be elected the president of the Association of Ukrainian Businessmen and Entrepreneurs, which served as his power base during his election campaign for president in 1994.

Already there has been talk that Mr. Marchuk may start forming a strong coalition in the Ukrainian Parliament, perhaps even try to become the new chairman in the current legislature.

[Curiously, the dismissal decree reads that Mr. Marchuk was dismissed so that he could perform the duties of a Parliament deputy. This was stated despite the fact that more than 100 deputies hold other jobs as well as seats in the legislature, and close to half of Mr. Kuchma's government ministers simultaneously are elected people's deputies.]

But, in his last interview as prime minister, Mr. Marchuk denied that he has any such ambitions. However, he has begun talking to various faction leaders in Parliament - perhaps to get a sense of whom he could rely on for support.

The former KGB official, who was tapped to head Ukraine's security services and rose through the ranks under President Kuchma, from first deputy prime minister to acting prime minister (March 1995-June 1995) to prime minister, is known for playing his cards close to the vest. Only time will tell what his next move will be.

"It's only two years until the next presidential elections, and it's never too early to start a campaign," said Mr. Lukianenko, who ran for president in 1991.

Mr. Marchuk remained tight-lipped as he roamed the halls of the Parliament on May 28 and 29, but he did voice words of warning to the government: "If the government does not consolidate, and does not react to the great responsibility it has for today's situation, then it will take Ukraine a very long time to emerge from these impoverished and difficult times. But, I do believe that Ukraine can overcome the current crisis."

Copyright © The Ukrainian Weekly, June 2, 1996, No. 22, Vol. LXIV

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