KIEV - After a year of empty talk on economic reform, Ukraine's new government, facing an economic crisis at home, is promising to lead the country on a new course.
"Ukraine is not a banana republic", Leonid Kuchma, the new prime minister, said in his speech on Tuesday.
But the problems facing any banana republic could not be graver. The administration is charged with resurrecting the country's economic base, coping with a dramatic increase in official corruption and stemming an inflation rate running at just under 40 percent.
Spurred by the burdens of statehood, the republic's government, which survived under a cloud of sloth since last December's independence, may now be forced to quicken the hitherto glacial pace of reform here.
The new administration is a strange hybrid of old and new. Kuchma, whose appointment as prime minister was announced two weeks ago, is a senior figure from the republic's military-industrial complex. Prior to his new appointment. Kuchma was director of the vast Yuzhmash rocket factory in Dnepropetrovsk, in southern Ukraine.
Three of his six deputy prime ministers have track records as either Communist Party functionaries or government bureaucrats. The two most important are Vasil Yevtukhov and Volodimir Demyanov. Yevtukhov is head of Ukraine's Union of Industrialists, which represents the interests of senior enterprise managers. Demyanov, who is responsible for the agricultural sector, was a former Communist Party district first secretary.
The two key democrats in the senior ranks of the government are Ihor Yukhnovsky, who is the firs deputy prime minister, and Viktor Penzenik. Both are from western Ukraine. Penzenik, formerly an economics professor at Lvov university, is the deputy prime minister responsible for economic reform. Both are sponsored by Rukh, the Ukrainian movement that spearheaded the republic's conversion to independence during the Soviet Union's dying years.
Although there are 11 new faces in the 33-strong ministerial team, the Ukrainian government remains under the influence of a narrow and corrupt group of nomenklatura and industrialists. Brought up under the Soviet system, they are neither able to lead nor willing to relinquish power.
One of the talented Penzenik's first actions is likely to be presenting parliament with an anti-inflation program.
Judging by its record, parliament, whose actions lie at the heart of Ukraine's problems, is unlikely to approve. If it does, Penzenik's tenure in office may be short. His fate may be similar to Volodimir Lanovoi's, who was dismissed by President Leonid Kravchuk in July after a few months as Ukraine's token reformer.
Penzenik does not underestimate the financial difficulties Ukraine faces. "We are in a situation that drug addicts have", said Penzenik. "To meet factory needs, enterprises were given credits. The more credits factories were given, the more dependent they became. To stop the emission of credits is possible, but I am not sure it can be done".
It is difficult to be overly optimistic about Ukraine's chances of putting its economic house in order. The institutions of president, parliament and government seem unable yet to fulfill their respective roles. President Kravchuk has consistently distanced himself from the economy, preferring to style himself as the builder of a Ukrainian state.
The parliament has largely lost credibility. Last week, it even failed to reach a quorum to take a vote on its
own dissolution.
The government, although technically new, threatens to combine old-style economic tinkering with threats to stamp out corruption, which is rife in the republic.
For example. Kuchma revealed that, out of 31 million tons of oil sold to Ukraine by Russia at ruble rates this year, about 9 million tons were syphoned off by Ukrainian officials and re-sold to Singapore and other countries. Ukraine's officials have a nasty propensity to fleece the newly independent state instead of building it.
Kuchma has also indicated that he will slow the pace of reform and concentrate his efforts on an efficiency drive in state enterprises. "The current process of privatization resembles slow death more than rapid rebirth", he has said.
If he is able to take decisions to curb inflation, restore some order among large-scale industries and ensure that hard-currency earnings make it into state bank accounts before his underlings swipe them, then the country could be set to claw back its shrinking productivity after the introduction of a new currency.
"Ukraine is not a banana republic", Leonid Kuchma, the new prime minister, said in his speech on Tuesday.
But the problems facing any banana republic could not be graver. The administration is charged with resurrecting the country's economic base, coping with a dramatic increase in official corruption and stemming an inflation rate running at just under 40 percent.
Spurred by the burdens of statehood, the republic's government, which survived under a cloud of sloth since last December's independence, may now be forced to quicken the hitherto glacial pace of reform here.
The new administration is a strange hybrid of old and new. Kuchma, whose appointment as prime minister was announced two weeks ago, is a senior figure from the republic's military-industrial complex. Prior to his new appointment. Kuchma was director of the vast Yuzhmash rocket factory in Dnepropetrovsk, in southern Ukraine.
Three of his six deputy prime ministers have track records as either Communist Party functionaries or government bureaucrats. The two most important are Vasil Yevtukhov and Volodimir Demyanov. Yevtukhov is head of Ukraine's Union of Industrialists, which represents the interests of senior enterprise managers. Demyanov, who is responsible for the agricultural sector, was a former Communist Party district first secretary.
The two key democrats in the senior ranks of the government are Ihor Yukhnovsky, who is the firs deputy prime minister, and Viktor Penzenik. Both are from western Ukraine. Penzenik, formerly an economics professor at Lvov university, is the deputy prime minister responsible for economic reform. Both are sponsored by Rukh, the Ukrainian movement that spearheaded the republic's conversion to independence during the Soviet Union's dying years.
Although there are 11 new faces in the 33-strong ministerial team, the Ukrainian government remains under the influence of a narrow and corrupt group of nomenklatura and industrialists. Brought up under the Soviet system, they are neither able to lead nor willing to relinquish power.
One of the talented Penzenik's first actions is likely to be presenting parliament with an anti-inflation program.
Judging by its record, parliament, whose actions lie at the heart of Ukraine's problems, is unlikely to approve. If it does, Penzenik's tenure in office may be short. His fate may be similar to Volodimir Lanovoi's, who was dismissed by President Leonid Kravchuk in July after a few months as Ukraine's token reformer.
Penzenik does not underestimate the financial difficulties Ukraine faces. "We are in a situation that drug addicts have", said Penzenik. "To meet factory needs, enterprises were given credits. The more credits factories were given, the more dependent they became. To stop the emission of credits is possible, but I am not sure it can be done".
It is difficult to be overly optimistic about Ukraine's chances of putting its economic house in order. The institutions of president, parliament and government seem unable yet to fulfill their respective roles. President Kravchuk has consistently distanced himself from the economy, preferring to style himself as the builder of a Ukrainian state.
The parliament has largely lost credibility. Last week, it even failed to reach a quorum to take a vote on its
own dissolution.
The government, although technically new, threatens to combine old-style economic tinkering with threats to stamp out corruption, which is rife in the republic.
For example. Kuchma revealed that, out of 31 million tons of oil sold to Ukraine by Russia at ruble rates this year, about 9 million tons were syphoned off by Ukrainian officials and re-sold to Singapore and other countries. Ukraine's officials have a nasty propensity to fleece the newly independent state instead of building it.
Kuchma has also indicated that he will slow the pace of reform and concentrate his efforts on an efficiency drive in state enterprises. "The current process of privatization resembles slow death more than rapid rebirth", he has said.
If he is able to take decisions to curb inflation, restore some order among large-scale industries and ensure that hard-currency earnings make it into state bank accounts before his underlings swipe them, then the country could be set to claw back its shrinking productivity after the introduction of a new currency.
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