First Steps

On December 11, the government of Viktor Yanukovych opened its first session followed by the premier’s first press conference. Reflecting on the future action plan of the new government, Viktor Yanukovych stressed that “meeting the plan targets will help us reach the ultimate goal of improving the people’s life.” The government head also stressed the need for “strict discipline.” As he put it, “This is a precondition for implementing decisions. If we do not respect the decisions made by the president and government, we will never build anything.” In this connection, the premier opined that the previously approved governmental programs “often lacked a systemic approach. They were either targeted or designed to address isolated issues,” Interfax-Ukraine quotes the premier as saying. In part, he stressed that “it has been more than a year since the president signed his decree on the strategic development of the state until 2011. But the program got under way in difficult circumstances when there was a rift between the government and parliament. We must rethink and start implementing this decision. Changes are inevitable. Governments and deputies will come and go, but the country should continue its development.” Speaking of the budget for 2003, the premier said that planned receipts for 2003 should exceed the current level of revenues by roughly 10%. “The government will propose a development budget with a 10% increment,” the premier said. According to him, this way we will get a realistic budget which will incite lawmakers to pass bills designed to boost receipts.

The premier’s visit to Moscow, which has become traditional for newly-elected heads of the Ukrainian government, was obviously not much of a breakthrough in the Russian direction, despite many kind words exchanged by the sides. Perhaps, evidence of this is the fact that as soon as next day Kyiv imposed a quota on the import of Russian-made cars, slashing it almost twofold. On returning to Kyiv, the premier himself pointed up integration with Europe as the Ukrainian choice. The new government also faces the budget quandary. In all probability, 2002 will not be very rewarding in that context, despite the yield on a recent Eurobonds issue which the government used to compensate for the privatization shortfall and even out differences with international financial organizations. Long overdue, budget-2003 spells even more problems. As a result, “a bad budget is better than none” has become an ominous watchword on the government agenda. The cabinet, it seems, is forced to maneuver, holding over the redistribution of committees — a natural way of solidifying the majority — until the budget is adopted. However, speculation that this is a sign of the government’s weakness might prove misleading. Pemier Yanukovych has already shown that he does not favor a return to populism. Evidence of this is the fact that he turned his thumbs down on the law on the minimum living wage for 2003 that passed the parliament, which, he claimed, was unsupported by budget receipts. “For it (the law — Auth.) to be implemented UAH 14 billion is needed, which we do not have,” said Premier Yanukovych. The minimum wage in 2002 is UAH 165, which is planned to be raised to UAH 237 next year. One of the advantages as well as disadvantages of the coalition government is the fact that this coalition has been built on a regional principle. This will slow down the drafting of the long-awaited governmental program. As Premier Yanukovych put it, it will be submitted for lawmakers’ consideration in late January or early February, since people’s deputies and representatives of the country’s regions will be directly involved in the drafting process. In practice, this means bringing together dissimilar and often even contradicting documents drafted by representatives of the regional elite.

Nevertheless, with the governmental program in the experienced hands of First Vice Premier Mykola Azarov, the chances are it will proceed from a realistic economic situation and business practices in Ukraine.

From this perspective, the premier’s statement on the need to consolidate Ukrainian society and “revive people’s confidence in the powers that be” can be before all associated with his government. Whether he succeeds is to a great extent dependent on both the firmness of his first steps and on the way they will be understood by taxpayers.