Kuchma takes the initiative, opting to govern via decree (06/28/98)

Kuchma takes the initiative, opting to govern via decree

by Roman Woronowycz
Kyiv Press Bureau

KYIV - With economic reforms in Ukraine at a standstill, and the Parliament in stalemate over the election of a leader, President Leonid Kuchma told the Ukrainian people on June 18 that he would take the initiative and attempt to re-invigorate the movement toward reform via presidential edicts.

After consultation with Ukraine's National Security and Defense Council and recommendations from his Cabinet of Ministers, the president said he had decided that while the country waited for the Verkhovna Rada to organize its leadership Ukraine could sink still deeper into crisis.

"The people and the state shall no longer remain hostage to the uncertainty emerging from the Verkhovna Rada," said President Kuchma in a brief nationally televised address. "Therefore, I assume the responsibility and, proceeding from the recommendations of the National Security and Defense Council, have made the decision to issue necessary decrees."

President Kuchma said all his decrees would be submitted to the Verkhovna Rada as draft laws for adoption once a leadership is in place, although he also stated that he sees dim prospects for the ability of the new Verkhovna Rada to pass the legislation he believes is necessary to get Ukraine's economy moving in 1998.

He said that 42 economic reform bills not addressed by the previous convocation are still languishing within the Parliament. "The newly elected Parliament also is too busy to attend to them since it has been paralyzed by a crisis linked with the formation of its leadership bodies for a second month now," explained Mr. Kuchma.

The next day President Kuchma signed the first of several decrees, establishing a single, simplified agricultural commodities tax for farmers. He also ordered the halving of government contributions to the Chornobyl Fund from 10 percent to 5 percent.

Vice Prime Minister for Economic Reform Serhii Tyhypko announced that the president would soon sign 10 additional presidential decrees, including an order to establish a single, one-time tax for small and medium-size business, and to raise the gasoline and diesel fuel tax.

The additional tax on transportation fuel will add approximately 700 million hrv to government coffers. Mr. Tyhypko also indicated that securities taxes would be reduced.

That same day the Cabinet of Ministers announced it had prepared a presidential decree to hike the minimum wage from 15 hrv to 55 hrv a month beginning on July 1.

Another document being prepared would direct that government-owed wages, pensions and student stipends be paid from a $1.25 billion fund based on proceeds of government privatization.

The sudden, quick movement on tax and budget reform by the president was greeted with guarded optimism by U.S. officials. According to Interfax-Ukraine, Ambassador Richard Morningstar, a special adviser to the president and secretary of state on assistance for the NIS, who was in Kharkiv at the time of the presidential announcement, said he hopes the series of economic decrees issued by President Kuchma will help improve the financial situation in the country.

However, he added that Ukraine still needs to "take steps to bolster her economic growth" before it begins to emerge from its economic crisis.

The presidential announcement, for the most part, was not welcomed by Ukraine's national deputies - as could have been expected. The extent to which the members of Parliament viewed the president's move as unlawful or unconstitutional depended on their political association.

Yurii Karmazin of the Hromada faction, which is strongly anti-Kuchma, called the president's action "another gross blunder." He added, "It is a complete violation of the legislative system."

But Oleksander Bandurko of the National Democratic faction, which is most closely aligned with the president, explained that the move was absolutely reasonable. "If the Parliament is paralyzed and unable to move laws through, then the president should do something - as long as he is not changing laws that we have passed," said Mr. Bandurko. He expressed concern, however, that some of the decrees contravene enacted legislation.

Vyacheslav Chornovil, head of the Rukh faction, said that, given Ukraine's current situation, the president's hand had been forced. "I am categorically against the interference of the executive authorities in the legislative field," he said, "but what else can be done when it is impossible to attend to the budget, what with the situation we find ourselves in today?"