President convenes Supreme Economic Council to prepare social development policy for 1997-2000 (09/21/97)

President convenes Supreme Economic Council to prepare social development policy for 1997-2000

by Roman Woronowycz
Kyiv Press Bureau

KYIV - President Leonid Kuchma gathered his Supreme Economic Council on September 12 to put together a social-economic policy for Ukraine's future and announced that wage arrears could be repaid to government workers by the end of the year.

"The August decline in back pay owed by 22 percent gives reason to believe that wage arrears can be cleared before the end of the year while maintaining payments of current wages," said the president in his opening address.

The meeting, a dry, Soviet-era type affair in which ministers and regional officials gave progress reports and put positive spins on projects within their realms, was meant to focus on what is needed to improve the standard of living of Ukrainians and, of course, to get the economy rolling.

President Kuchma, who chaired the session, said, "We can only deal with social policy problems to the extent that we deal with the economy. The goal for 1998 is to stabilize the life of the citizen. I underline that it is merely stabilization. We cannot yet talk about improving the life of our citizens."

In reference to the political dog-fighting that has characterized the president's relations with the Verkhovna Rada as well as with his Cabinet of Ministers, President Kuchma emphasized that "social questions are not solved in political ways."

All Cabinet members, Verkhovna Rada national deputies, heads of regional administrative councils, representatives of trade unions and members of the Academy of Sciences were invited in addition to regular members of the president's Supreme Economic Council, a recently organized advisory body on economic and social policy issues. The broadened meeting was called to develop a consensus and approve a set of policy guidelines for social development for the period 1997-2000 for issues such as infrastructure development, housing, pension arrears and reform, minimum wages, and children's health and education.

In addition to waxing positive about resolving wage arrears, President Kuchma also sounded an optimistic note on the situation with pensions. He said pension arrears have shrunk by 217 million hrv over the last two months and with a serious effort the backlog could be cleared by mid-November. He called the repayment of wages and pensions "the sacred duty" of the prime minister and the heads of oblast administrations. The government currently owes its workers 4.5 billion hrv ($2.4 billion U.S.) and the pension fund 3.7 billion hrv ($2 billion U.S.).

He also noted that wages owed to workers in the private sector had increased by 2.5 percent, while lamenting that "the state does not have enough leverage to influence the situation."

Offering a bit of hope that the economic downslide has halted, the president said that this year's gross domestic product should decline by only 1 percent compared with 28 percent in 1994.

Looking at the economic development of Ukraine to the year 2000, President Kuchma declared that the key to Ukraine's economy is growth in the small and medium business sector and called on local government leaders to key their economic development plans on that sector.

Vice Prime Minister for Social Issues Mykola Biloblotskyi, coordinator for the program, said he believes the minimum wage can be raised to meet cost of living indices by the year 2000. He expressed hope that the minimum wage can be raised to 50 hrv next year. Today the average income in Ukraine is 160 hrv, while the minimum wage stands at 15 hrv monthly (for the unemployed).

The vice prime minister said he would also like to raise the minimum pension to 20 hrv from 15 hrv, but with Ukraine's large member of pensioners that could take an additional 1.2 billion hrv annually. He said that today 33 percent of Ukrainians receive some kind of government subsidy, which costs the government 22 billion hrv annually.

Other speakers offering their viewpoints were National Deputy Yurii Buzduhan, Minister of Health Andrii Serdiuk, Minister of Family and Youth Valentyna Dovzhenko, President of the Federation of Trade Workers Oleksander Stoian, as well as oblast administration leaders from Lviv and Khmelnytsky.

Expressing rare public frustration with his oblast bosses, President Kuchma verbally blasted the leader of the Odesa Oblast for failing to have combines moved from the port city of Odesa. Shaking his finger, Mr. Kuchma chastised the group of oblast leaders, "What I have here is a collective of irresponsibility," said the president. "Nobody wants to take responsibility, you all blame the other person."

Verkhovna Rada Vice-Chairman Viktor Musiaka, the last to speak at the economic meeting, said that although a consensus on an official social policy will be difficult to achieve, some kind of plan is needed. He said he hopes to see a plan in place by the end of the first quarter of 1998.

The social policy plan, which is to be finalized by Vice Prime Minister Biloblotsky, must be approved by the Verkhovna Rada.

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