EDITORIAL: Kuchma administration must act now (11/29/98)

EDITORIAL

Kuchma administration must act now

As billionaire financier George Soros slowly begins disassembling his charitable foundation in Ukraine, what should be made clear is that he is not the first to leave this economically confused country, and that his reasons, although in part personal, also reflect what to some has been obvious for a long time: the Ukrainian leadership has no political will to complete economic reforms.

It was early last year that Motorola, a large U.S.-based multinational corporation, had announced it would suspend a contract with the government because it was fed up with "the ever-changing rules of the game" in Ukraine. Most people took the words to mean that the extensive and multi-tiered system of graft that has developed in Ukraine made it impossible for Motorola to proceed.

But institutionalized graft is only one of myriad problems that have stemmed the flow of investment into this country and made economic reforms nothing more than an exercise in promises and planning. A huge, bloated bureaucracy, a lack of structural reform, sky-high taxes, non-transparent and questionable privatization processes - the Kuchma administration has failed to deal with all of these problems.

As Mr. Soros explained in announcing huge financial cuts at the Kyiv office of his International Renaissance Foundation: "I have given up on Ukraine. Ukraine lacks political will and any kind of leadership."

For Mr. Kuchma it has long been time to stop talking the talk and start walking the walk. In his speech before the Verkhovna Rada on November 19 the president carefully and accurately fleshed out what needs to be done to get the economy moving. It is not the first time he has made that speech.

As Serhii Holovatyi, Mr. Kuchma's former justice minister and an announced candidate for the 1999 presidential elections, said after the speech: "It was a basic economics lesson for college students. He did not mention any accomplishments, or specifically what yet needs to be done."

As Mr. Kuchma lurches towards the fall 1999 elections he is talking like a candidate - not like a president who has already had four years to implement a program of economic reform. Sure, the Verkhovna Rada run by a Communist majority is doing everything to leave the country in the worst shape possible before the elections. In his speech President Kuchma rightly criticized the legislative body for failing to pass more than 40 bills associated with economic reform

However, there are things the president can do without Verkhovna Rada approval. He can begin by implementing his proposal to purge the bloated government of 30 percent of its work force. Nor does he need Verkhovna Rada permission to begin an intensive anti-corruption effort within the ranks of the bureaucracy, with an accent on his tax collectors, educators and militia.

The Kuchma administration must begin to make needed structural reforms and fight corruption in its government ranks now, or more organizations like the Renaissance Foundation will begin to pack their bags and exit Ukraine. The country then may truly find itself again in close partnership with Russia - on a lonely economic island far from the shores of the world economic community. That may please the average communist, but it will not help the average Ukrainian.

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