Kiev Reform Plan Debated

KIEV -- Ukrainian President Leonid Kuchma sat front center in the country's parliament, the Verkhovna Rada, all day as deputies debated his year-old economic reform program in the most dramatic of terms.


The occasion was the introduction Wednesday of the government's latest plan for implementing that program. Following heated debate between the Western-minded reformers, on the one hand, and socialists and communists on the other, 233 of 358 deputies present finally voted late in the evening to approve the plan.


Yet for all the emotion involved, the debate was regarded by most participants as more symbolic than substantive. Vice Premier for Economic Reform Viktor Pynzenyk said the day's arguments laid bare the alternative directions the country could take, but failed to even touch on the practical means of getting anywhere.


"What really matters is the 1996 state budget, and whether it is prepared over the next few weeks," he said.


Opening the debate, Prime Minister Yevhen Marchuk delivered a speech aimed at winning the endorsement of leftist deputies. "This time we're not trying to sell you a program that promises to solve our economic problems at once," he said. "We're just trying to lay the ground for economic recovery."


The leftists' "Alternative Program for Preventing National Disaster" was presented by socialist Deputy Natalia Vitrenko.


"The fundamental ideology behind the government's program is faulty," she said. "It is oriented toward foreign credits, rather than our country's own potential."


Kuchma's program indeed has International Monetary Fund written all over it. The country already has received $1.4 billion from the IMF in stabilization funds and standby credits, and is seeking at least that much for its currency-stabilization fund.


Leftists have been pressing the government hard to meet the needs of a population wracked by economic depression. Two weeks ago, for example, the Verkhovna Rada ordered the Cabinet and National Bank of Ukraine to allocate $300 million to cover energy and heating costs for state housing and enterprises this winter. That is not likely to sit well with the IMF.


The government plan outlines reforms to taxation, property ownership, pricing and credit policy, among other things. It also deals with the country's staggering $1.5 billion energy debt to Russia, and its crisis involving $10 billion in inter-enterprise debt.


The socialists' alternative program proposes solving the inter-enterprise payments crisis by "normalizing" access to credits, expanding the tax base to "liquidate the shadow economy," and stopping "snowball" privatization. Verkhovna Rada Speaker Oleksandr Moroz, the country's leading socialist, ripped the government plan for "destroying the industrial potential of Ukraine."


Oleg Soskin, director of the Kiev-based Institute of Problems of the Transitional Period, dismissed the leftist ideas out of hand, but also said the government's approach would lead not to liberal economic reform so much as heavily state-regulated capitalism.


He said reform programs would not add up to much unless fundamental vehicles for reform were in place. As an example, he said there was little hope state money could be properly allocated or accounted for as long as the country lacked a treasury.