Verkhovna Rada overwhelmingly passes government's economic revival program (04/09/00)

Verkhovna Rada overwhelmingly passes government's economic revival program

by Roman Woronowycz
Kyiv Press Bureau

KYIV - The parliamentary majority in Ukraine's Verkhovna Rada easily passed the government's economic revival program on April 6, which Prime Minister Viktor Yuschenko had pushed as the keystone to the country's economic revival.

Only the Communist faction voted overwhelmingly against the program, dubbed "Reforms for Prosperity." Although two influential parliamentary factions, the Social Democratic (United) and Regional Rebirth factions had voiced concerns over certain features of the program in the two weeks since it was presented to the Parliament, their members fully backed the plan during the floor vote.

Prime Minister Yuschenko, who broke into a wide grin as the results of the vote appeared, had staked his future and that of his government on the plan, which he has called one of Ukraine's last chances to develop a normal free market economy.

During floor debate the day before approval, Mr. Yuschenko called the economic reform program his government had developed "unique."

"The program is not unique because it is the best, we have never made such a claim," explained Mr. Yuschenko. "Its uniqueness lies in the fact that, for the first time since the independence of Ukraine, [such a document] has a historical chance to become a reality, to be given life. This is not the first reform program, but it is the first program that has a realistic chance of being given more than formal political support."

In the end, 261 national deputies supported the resolution and 103 voted against.

In a sign that the power of the left in the Parliament has diminished greatly, its forces offered only muted resistance to the resolution, which puts Ukraine on a decisively reformist and monetarist path.

Socialist faction leader Oleksander Moroz, addressing the parliamentarians just before the final vote, insinuated that passage of the resolution was a fait accompli and that it was time the majority members stop playing games and get it over with.

"If you do not support the government's plan today, then it means that you are against the president. We all know that is not possible," said Mr. Moroz.

The Social Democrats (United) and the Regional Rebirth factions, who are closely aligned with President Leonid Kuchma, repeatedly had raised concerns that the program insufficiently addresses social welfare issues and improperly restructures the energy sector. Political experts said the reason for their resistance could be laid to some extent at the feet of the leaders of the factions, respectively, Oleksander Volkov and Viktor Medvedchuk, businessmen who are thought to have extensive dealings in the oil and gas trade.

In a lobbying strategy unusual for this country, where much occurs behind closed doors, government ministers met very publicly with faction leaders and members of many of the parliamentary committees who would determine whether the program would pass during the two weeks before the final vote. The government accepted dozens of changes and clarifications to its program in the hope that there would be minimal resistance to approval.

The government even went so far as to put its authority and very existence on the line. Prime Minister Yuschenko and his lead man on the program, Minister of the Economy Serhii Tyhypko, had often stated that should the program fail to receive the Parliament's blessing the government would resign.

The proposals from the Parliament led to a 25 percent growth in the size of the document, but Mr. Yuschenko said he was satisfied, because no fundamental changes were made in the program's targets and goals.

While explaining that the recent growth in economic indicators provided a good starting point from which to proceed full force with implementation of reforms, he warned that stumbling blocks still lie ahead - including the need to cajole businesses out of the shadow economy, where today they feel most comfortable, and to repay wage and pension arrears, which he called an "amoral phenomenon."

He called the new economic program "a challenge to the tragedy of poverty" and said that the ultimate goal must be to create a middle class.

"Concurrently, it must aim to free potential for the formation of a middle class. Without it we will not win the fight against poverty, which then will destroy us," said Mr. Yuschenko.

The program is a five-part plan with 21 end goals to revitalize the Ukrainian economy. If fully carried out, it envisages an eventual 1.3 to 1.4 fold rise in real incomes for Ukrainians and an annual average economic growth of 6.5 percent beginning in 2002. For fiscal year 2000, it forecasts a GDP increase of 1 percent to 2 percent and the repayment of all wage and pension arrears. The program also sets targets for vast reductions in the bureaucracy and the streamlining of government.

Now that the program has been approved, Mr. Yuschenko and Verkhovna Rada Chairman Ivan Pliushch said they will sign a memorandum of cooperation between the two branches of government, which have had strained relations for the last several years.

The memorandum was proposed by the Coordinating Council that guides the recently formed parliamentary majority and has been viewed by Prime Minister Yushchenko as imperative to the success of the government's economic program.

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