Budget with A Risk Factor

The 2005 budget bill was again voted down by the Verkhovna Rada. Even when the six “striking” factions and groups of people’s deputies returned to the hall, the 226 yeas required to pass the bill were not registered. On November 10 the Ukrainian Parliament finally broke all the deadlines prescribed by the standing orders, and returned the documents to cabinet for revision. Remarkably, the proposal to take into account some 3,000 amendments submitted by MPs and other “legislative entities” were also rejected. The next round of budgetary, income, and expense allocations has been scheduled for November 30.

MPs representing various factions had their own weighty arguments for delaying the budget bill. Valery Konovaliuk (Regions of Ukraine) was the main newsmaker, reminding everyone that the proposals and amendments submitted by MPs and then processed by the VR budget committee should be put to the vote in the first reading. Mr. Konovaliuk also said that parliament was actually incapacitated by the presidential campaign, and that the Verkhovna Rada has not assembled in full force since the start of the campaign. “What is the sense of deliberating an incomplete bill?” he asked the audience. Parliamentary Speaker Volodymyr Lytvyn replied that washing the VR committee’s dirty linen in public was not good either, and that they should sort things out among themselves.

The Socialists and later the Communists declared their refusal to vote for an “antipopular” budget bill, whatever the arguments in its favor. The Communists were also offended by what they referred to as disregard for their proposals and amendments.

VR Budget Committee Chairman Petro Poroshenko took the floor and began by justifying certain issues, declaring that none of the initiatives submitted before October 1, as per standing orders, had been omitted, and then reminded the audience that the government had a right to ignore parliament’s ideas. He went on to reproach cabinet members for refusing to provide adequate grounds for budget expense items that he believes are populist: “After October 20, we forwarded a number of inquiries to cabinet, requesting clarification of budget-envisaged finance sources, particularly those concerning increased social payments. We received no reply.” Petro Poroshenko couldn’t help remarking sarcastically: “Thank God, we have heard no more of promises of a ‘car for every veteran’!”

It is true that the budgetary process has never been peaceful in Ukraine, yet the MPs hope that they will get back to the 2005 budget bill after the presidential elections and that the issues will be less politicized.

At the same time, behind the MPs’ reluctance to pass the budget bill are political as well as economic considerations. Even the most consistent advocates of Viktor Yanukovych point to the bill’s ambitious nature. A prestigious member of the Regions of Ukraine faction told The Day (strictly off the record) that “all resources for optimizing economic indices have been exhausted.” His colleague in cabinet agreed, saying, “Too much has been invested in [Viktor Yanukovych’s] victory.” Experts predict that the coming year will show twice as much tension as now, owing primarily to the international economic decline, and secondly, to the 2006 parliamentary elections. “We have placed our mark up high. All capacities have been activated; we are doing our utmost.” However, banking on “energy-saving technologies and investment in the municipal sector, as well as on the development of inner production capacities” are what some experts believe is the way to reduce the negative consequences of this decline to a minimum. “All this is apparent to the naked eye and requires corrections, in accordance with the pertinent budget items,” says another source of The Day. Another source says, “Our cabinet grapevine says that all this is being done before the elections, and that everything is being done the right way.” One good thing is that we still have time until November 30 to try to figure out what mistakes in the budget bill should be studied and possibly corrected.